Food securityLawmakers uneasy about Smithfield’s acquisition by a Chinese food giant

Lawmakers last week questioned Smithfield Foods CEO Larry Pope about the proposed acquisition of the pork producer by China’s largest meat producer. Lawmakers are worried that the acquisition will negatively affect the U.S food supply and agricultural producers.

Pope told the Senators that his company is committed to producing and shipping safe food. Pope added that the takeover by Shuanghui International Holdings would be a positive thing.

“This is a wonderful opportunity for the U.S. to do what it does best: produce agriculture products and ship them around the world,” Pope told the Senate Agriculture Committee. “This is an opportunity for U.S. pork producers to grow.”

USA Todayreports that many lawmakers are concerned about Chinese companies being active players in key sectors of the U.S. economy, and are uncomfortable with ownership in important American companies being transferred to Chinese companies.

“I think it is reasonable for you to expect a wave of Chinese investments into our food and agriculture industry, and this potential purchase is not a one-off,” Daniel Slane, a member of the U.S.-China Economic and Security Review Commission, a government agency that monitors trade and economic relationships between the two countries told USA Today. “Today, its Smithfield, but tomorrow, it could be Consolidated Grain, ConAgra or Tyson Foods.”

Pope said the merger would have “no noticeable impact on how we do business in America and around the world, except that we will do more of it.”

Committee members expressed their concerns that the takeover would result in more of the U.S. pork supply being shipped to China, leaving the United States vulnerable to food shortages, and also to unsafe food, a problem that has plagued the Chinese food market.

Committee members were also worried about how the deal would affect other agricultural producers in the United States, and what would happen to the company’s intellectual property.

“In the short term, I know this deal looks good for our producers. This also needs to be a good deal in the long-term,” Senator Debbie Stabenow (D-Michigan), chairwoman of the Agriculture Committee, said during the hearing. “One pork company alone might not be enough to affect our national security, but it’s our job to be thinking about the big picture and the long-term for American food security and economic security.”

Pope said the purchase would not lead to food imports from China, but instead open up markets for U.S. pork farmers, giving them access to Shuanghui’s large distribution system and millions of consumers in China, South Korea, Japan, and other countries in Asia.

Pope stressed that the company will not move or change its management and facilities and will keep its existing relationships with other pork producers in the United States.

Several senators including Chuck Grassley (R-Iowa) and Tom Harkin (D-Iowa), have called for the U.S. Committee on Foreign Investment (CFIUS) review of the deal to include the Department of Agriculture and the Food and Drug Administration.

The deal, which would be the largest takeover of a U.S. company by a Chinese firm, is expected to close later this year.

Smithfield, which was founded in 1936 and based has offices in Virginia, is the world’s largest pork producer, employing more than 46,000 people in twenty-five states and four countries. Smithfield sells packaged products under its name, and sells other products under the names Farmland, Armour, and Cook’s.