While the appropriations that routinely wind their way through Congress aren’t supposed to create – or kill – policies already passed in other bills, the National Farmers Union is warning that opponents of Country of Origin Labeling and the Grain Inspection Packers and Stockyards Administration will try to harm both COOL and GIPSA by starving them of funding.
NFU President Roger Johnson testified before the US House Agriculture Subcommittee on Livestock, Rural Development and Credit. Members of the committee heard from several interested parties on the state of the U.S. livestock industry earlier this week.
Johnson reminded the committee that rural America has lost 34 percent of beef operations and 91 percent of hog farms since 1980 – a total loss of 1.1 million livestock farms. There are also fewer meatpackers and processors. Today, the top four beef packers have control over 81 percent of cattle slaughter in the U.S.,
and the top four swine processors control 65 percent of hog sales.
In meetings sponsored by the Ohio Farmers Union earlier this year, farmers, FSA and state extension officials all seemed to agree that one constraint in promoting a grass-fed beef cooperative in northwestern Ohio is the dearth of independent processing in Ohio. Speakers representing their own successful independent family farm livestock operations and cooperatives told OFU members that attempting to work with the multi-national, market-dominating processors will only lead to total dependence and the potential for ruin if a farmer runs afoul of the system and is essentially black-balled in the Big Ag marketplace.
“Fewer livestock buyers result in less competition, greater opportunity for antitrust violations, and a difficult market for the remaining farmers and ranchers,” said Johnson. “The U.S. Department of Agriculture has the authority to prohibit deceptive or fraudulent buying practices by processors and may protect farmers and ranchers if they have been harmed by unfair trade practices, but appropriations riders over the last three years have kept USDA from implementing these basic fairness rules. Future riders that impede enforcement of the Packers and Stockyards Act must be defeated,” Johnson said.
On COOL, Johnson told the committee, “I commend Congress for maintaining (COOL) standards in the 2014 Farm Bill. Consumers want to know more about the food they purchase, while U.S. farmers and ranchers are proud of what they produce.”
“NFU strongly opposes the use of an appropriations rider or other legislative vehicle to deny consumers access to information about their food.”
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
Washington, D.C. 20220
WASHINGTON (Dec. 8, 2011) – National Farmers Union President Roger Johnson issued the following statement after U.S. Secretary of Agriculture Tom Vilsack announced that the U.S. Department of Agriculture (USDA) has published the Final Rule implementing protection provisions for farmers and ranchers under the Grain Inspection, Packers and Stockyards Administration (GIPSA):
“While the Final Rule is a good first step, it is certainly not a last step. We are disappointed that Congress passed a Fiscal Year 2012 appropriations bill that prevents additional portions of the rule from advancing. In particular, it is critical that the competitive injury portion of the rule be implemented. Currently, a producer must prove that a packer’s anti-competitive practices damaged the entire marketplace. Clarification of competitive injury is needed so that the producer would only have to prove that his or her operation was hurt by such actions, a much more reasonable standard. In choosing to prevent the competitive injury portion of the rule from moving forward, Congress has clearly chosen to put the interests of large packers ahead of family farmers and ranchers.
“After more than one year of discussion and more than 60,000 comments received, USDA has issued a Final Rule that provides some protection to family farmers and ranchers across the country. This rule will make the livestock market at least somewhat more transparent and fair. The rule clarifies whether the requirement of additional capital investments for poultry growers and swine producers violates the Packers and Stockyards Act, and ensures poultry dealers have a reasonable period of time to remedy a breach of contract.
“We will continue working with this administration and Congress to ensure that family farmers and ranchers are able to compete in a fair and open marketplace.”