OFU Blog

NFU Comes Out Against Chinese Purchase of Smithfield

July 22, 2013 By Ron Sylvester Leave a Comment

Earlier this summer Chinese company Shuanghui International and Smithfield Foods, Inc. announced the Chinese company’s proposed $4.7 billion acquisition of the huge U.S. pork producer.

While Smithfield would be a powerful addition to any food company’s portfolio, many family farmers, food activists and others in the U.S. are alarmed by the Chinese takeover of Smithfield due to the lack of adequate food safety regulations in China and potential foreign domination of an important U.S. industry. According to the National Farmers Union, Smithfield accounts for 15 percent of U.S. pork production and 26 percent of pork processing in the country.

NFU is also concerned about the further consolidation of the U.S. pork industry into the hands of mega corporations.

“The proposed buyout of Smithfield by a Chinese interest is extremely alarming to NFU members across the country,” said Johnson. “Uncompetitive markets in the pork and beef industries have had a dampening effect on the ability of family farmers and ranchers to stay in business.”

In 1980, there were 660,000 hog farms. Today there are only 67,000. In 2011 alone, approximately 2,300 hog producers went out of business.

“The costs of the acquisition far outweigh the benefits to Americans, and the security of our domestic food system is threatened by foreign control,” said Johnson. “ I urge CFIUS to set a bold precedent – that the administration values our farms, our food, and our rural economies so much that the federal government will stand up to a takeover of a large swath of our agriculture industry.”

Other than Shuanghui and Smithfield shareholders, who else stands to benefit from the takeover? Smithfield CEO stands to pocket nearly $47 million. Chinese private equity firm New Horizons and investment bankers at Morgan Stanley will win from Shuanghui’s planned IPO listing on the Hong Kong stock exchange after the deal is complete.

The deal does some hurdles to clear here in the U.S. It will need to be cleared through the Treasury Dept.’s Committee on Foreign Investment in the U.S. The committee is chaired by Treasury Secretary Jack Lew. NFU has sent a letter to Lew voicing opposition to the deal.

The committee’s website does not have a form for public comment on deals under review, instead, you may want to send Lew a letter voicing your opinion at:

Department of the Treasury

Treasury Secretary Jack Lew

1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

NFU President: U.S. International Food Aid System Needs Reform

July 22, 2013 By Ron Sylvester Leave a Comment

from the National Farmers Union

WASHINGTON – National Farmers Union President Roger Johnson participated in a panel discussion about proposed reforms to the U.S. international food aid system. The panel, entitled “Proposed Reforms to U.S. Food Aid: Framing the Debate,” was hosted by FoodPolicy.us.

“At the time when food aid was enacted, we had a large oversupply of grain and accompanying low market prices,” said Johnson. “The government was purchasing or receiving and physically holding significant stocks, and aid had a dual purpose of getting rid of these stocks and helping vulnerable people around the world. Today the government does not own grain stocks. Our food system has changed drastically in the past 50 years; naturally, our system of international aid must evolve as well.”

The president’s Fiscal Year 2014 budget proposed a variety of reforms in the area of food aid. Overall, the U.S. Agency for International Development (USAID) estimates the proposed reforms would create an estimated $155-215 million in annual gross efficiency savings and $105-165 million in net efficiency savings, allowing the agency to serve an additional two to four million people in need each year. The reforms propose to require at least 55 percent of emergency food assistance continue to be in the form of U.S. commodities, and up to 45 percent may be acquired through local and regional purchasing.

“Ultimately, if we truly want to end global food insecurity, we must consider what is going to best serve local farmers, local economies, and hungry people,” said Johnson.

Johnson: CFTC Needs Resources to Ensure Fair and Functional Markets for U.S. Agriculture

July 21, 2013 By Ron Sylvester Leave a Comment

from the National Farmers Union

WASHINGTON – National Farmers Union President Roger Johnson issued the following statement regarding the U.S. Senate Committee on Agriculture, Nutrition and Forestry’s hearing today on the Commodity Exchange Act and the Commodity Futures Trading Commission (CFTC):

“Family farmers and ranchers, like any other players in the economy, need access to commodity markets that are stable, fair, and free from manipulation. The CFTC needs the tools, data, and authority to ensure that functional markets are available.

“The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 assigned enormous, additional responsibilities to the CFTC. In order to carry out those duties, CFTC needs the resources to keep up with the $600 trillion derivatives market and ever-changing trading technology. Furthermore, CFTC should continue its work to improve and implement the regulations resulting from Dodd-Frank.

“The MF Global and Peregrine debacles underscore the need for regulatory oversight of our financial and commodity markets. Now is not the time to turn back – CFTC must be allowed to continue in its important work.”

Should your farm or ag-related business think about non disclosure agreements?

July 19, 2013 By Ron Sylvester Leave a Comment

from a recent post on the Ohio Agricultural Law Blog:

Attorneys across Ohio recently came together for the 2013 Ohio Agricultural Law Symposium to learn about current legal issues for Ohio farmers and agribusinesses. In a session about protecting the farm and agribusiness, Cari Rincker, a food and agricultural law attorney in New York City, discussed why farm and agribusinesses might consider using a Non-Disclosure Agreement (NDA) to safeguard confidential business information.

An NDA is not typically a tool that a farm or agribusiness would think of using in a business transaction. According to Rincker, however, NDAs are underutilized in the food and agriculture industry. Many farms and agribusinesses develop their own ideas, concepts, know-how, trade secrets, intellectual property, business plans or financial information. Preventing other parties from disclosing these types of information can be important to the long-term health and viability of the farm or agribusiness.

Read the Rest of This Article

OFU Efforts Pay Off – Grain Indemnity Update Signed by Gov. Kasich

July 11, 2013 By Ron Sylvester Leave a Comment

Ohio Gov. John Kasich signs Senate Bill 66 which updates Ohio’s Commodity Handlers law, also known as the grain indemnity fund and program.

COLUMBUS – Gov. John Kasich today signed into law S.B. 66 which affords Ohio’s farmers status as first in line for assets in the event of a grain elevator failure and boosts the size of the farmer-funded grain indemnity program.

The Ohio Farmers Union and other state ag organizations worked for two and a half years with the bill’s sponsor, State Sen. Cliff Hite (R-Findlay) on the legislation. Hite also serves as chairman of the Ohio Senate Agriculture Committee.

“Family farmers are the winners with the updates to the grain indemnity law,” said Roger Wise, president of OFU.

“Before grain indemnity, smaller operators could be driven entirely out of business in the event of a grain elevator bankruptcy. We’ve been covered since 1983, but some have questioned – and the state has had to go to court – over the question of who is first in line as a creditor when an elevator fails.”

“It’s clear now in Ohio law that regarding elevator failures, the farmers who did business with that elevator are first in line,” Wise added.

Additionally, the updated law increases the size of the farmer-funded grain indemnity fund which pays producers for losses in the event of an elevator failure. OFU sought to have the fund size increased due to several years of historically high prices for corn and soybeans.

[Read more…]

PHOTOS – Kasich Signs SB 66 – Grain Indemnity Law Update

July 11, 2013 By Ron Sylvester Leave a Comment

Below are a couple of photos taken during the bill signing ceremony for SB 66 today. Clicking on the images gives you a full res shot to download.

L-R: State Sen. Cliff Hite (R-Findlay), SB 66 primary sponsor; Ohio Gov. John Kasich.

L-R: Roger Wise, president, Ohio Farmers Union; Linda Borton, executive director, Ohio Farmers Union; State Sen. Cliff Hite (R-Findlay); Christopher Collins, aide to Sen. Hite; Tony Anderson, Ohio Agricultural Commodity Advisory Commission; Mel Borton, Ohio Farmers Union; Allen Stockberger, Ohio Agricultural Commodity Advisory Commission. Seated, Ohio Gov. John Kasich.

Several Hundred Ag and Associated Orgs Ask Boehner for Another Try on Farm Bill

July 8, 2013 By Ron Sylvester Leave a Comment

The National Farmers Union and 531 other agriculture, rural development, conservation, financial services, energy and forestry groups asked U.S. House Speaker John Boehner (R-Ohio) over the Fourth of July week to bring the Farm Bill to the floor for another try and to keep the nutrition title a part of the bill.

“Farm bills represent a delicate balance between America’s farm, nutrition, conservation, and other priorities, and accordingly require strong bipartisan support. It is vital for the House to try once again to bring together a broad coalition of lawmakers from both sides of the aisle to provide certainty for farmers, rural America, the environment and our economy in general and pass a five -year farm bill uponreturning in July. We believe that splitting the nutrition title from the rest of the bill could result in neither farm nor nutrition programs passing, and urge you to move a unified farm bill forward,” read a letter to the speaker signed by the 532 organizations.

The Ohio Farmers Union was a signatory, as was NFU and the Ohio and American Farm Burea Federations.

You may read the entire letter and view the list of signers here.

Grain Indemnity Bill is On Gov. Kasich’s Desk – And There’s a New Senate Ag Chairman

June 30, 2013 By Ron Sylvester Leave a Comment

Ohio State Sen. Bob Peterson, new chairman of the Senate Ag Committee.

The Ohio Senate agreed to the minor House amendment to SB 66, the bill which will update Ohio’s grain indemnity law.

Since the senate overwhelmingly supported the original bill, this was no surprise. What was a surprise was the bill’s sponsor, Sen. Cliff Hite (R-Findlay) being introduced as the former chairman of the Senate Ag Committee. Hite chuckled and went about his business in explaining the House amendment.

It turns out that earlier in the day, Hite was replaced as chairman by Sen. Bob Petersen (R-Washington Court House). Given the smiles on the floor on both senators’ faces, it appears that the change in leadership came as no surprise.

Based on discussion at the last Agricultural Commodity Advisory Commission, which oversees the grain warehouse program and grain indemnity fund, the one-half cent per bushel levy will begin to be collected at the beginning of 2014. The indemnity fund would be built up to its new cap of $15 million. Ohio Dept. of Agriculture officials say that based on past history, it will take around two years of collecting the levy to build up to the new cap. Another needed change contained in the bill is explicitly setting farmers as the primary lienholders if an elevator goes under. Finally, barley, oats, rye, grain sorghum, sunflower and speltz are removed from the list of commodities covered by the fund.

Of course this all dependent on Gov. Kasich’s signature which is expected soon.

State Budget Set for Next Two Years; Kind to Agriculture but Poses Questions for Local Taxpayers

June 30, 2013 By Ron Sylvester Leave a Comment

Heading into state budget season this year, Ohio Gov. John Kasich put forth a plan that he said would cut income taxes for everyone in the state – including businesses – while raising sales tax revenues and the state’s severance tax on fracked oil and gas. At the end of the process, and after several months of back and forth between Republicans in the House and Senate, Kasich got tax cuts but some observers are questioning GOP claims that everyone is a winner after this process.

An across the board cut of 10 percent will come off of Ohioans’ personal income tax bills and small businesses will receive a new state income tax exemption of 5o percent on the first $250,000 of business income. The personal income tax cut will be phased in over three years. Tax cuts in the Kasich budget total around $2.7 billion. They are being paid for by raising the state sales tax one quarter of a percent to 5.75 percent, new taxes on many online purchases, cutting the 12.5 percent state pickup on the cost of new local property tax levies and means testing the state’s homestead exemption for older Ohioans.

Two agricultural wins are increased funding for the Ohio Agricultural Research and Development Center in Wooster and the Ohio State University Extension program.

[Read more…]

NFU President Makes Clear Opposition to Splitting Farm and Nutrition Programs in Farm Bill

June 28, 2013 By Ron Sylvester Leave a Comment

from the National Farmers Union

WASHINGTON – Following the recent failure of the 2013 Farm Bill in the U.S. House of Representatives, there have been suggestions by several Congressmen who voted down the bill about splitting farm programs from nutrition programs, creating two separate bills. National Farmers Union (NFU) President Roger Johnson issued the following statement in opposition of the separation:

“Separating farm programs from nutrition programs and proposing two bills would be a huge mistake. The likely result would be to kill the bill. This will allow Congress to continue to take no action to provide certainty to U.S. family farmers, ranchers, rural residents and those who depend on the Supplemental Nutrition Assistance Program (SNAP).

“As the providers of the food, feed, fiber and fuel, we have an obligation to educate the public on the importance of farmers and the support we lend to SNAP and other programs. Two bills would continue to perpetuate the public’s misconception on where their food comes from and widen the gap between the farmer and the consumer.

“This would also be a disruption to the historic coalition between urban, rural and conservation groups. The farm bill has historically been a bipartisan effort, and must remain a bipartisan effort. It is a shame that politics are getting in the way of providing for so many people.

“Separating farm and nutrition programs is simply a recipe to kill the bill.”

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