Opinion: Smithfield may profit from U.S. China trade war

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Everybody knows…well almost everybody… the meaning of pork barrel politics.  Legislative pork has been kicking around the U.S. Congress as well as state legislatures since the 1800s.

Good ol’ honest Abe Lincoln trafficked in pork, handing out Civil War contracts to northern businessmen for campaign support and patronage jobs.

It can get pretty outrageous.  For example, in 2011 the feds gave Montana State University $740,000 to research whether sheep grazing could control weeds.

Generally speaking, pork barrel politics amounts to politicians trading favors to constituents or special interest groups for political support, often as campaign contributions.

Pork barrel spending, better known as earmarks in federal spending bills, have surged in 2018.

Citizens Against Public Waste reports “232 earmarks in FY 2018, an increase of 42.3 percent from the 163 in FY 2017.  The cost of earmarks in FY 2018 is $14.7 billion, an increase of 116.2 percent from the $6.8 billion in FY 2017, or nearly nine times greater than the increase in discretionary spending.”

Yuck.

Which brings me to USDA’s $12 billion farm aid package the feds say is targeted to help farmers and ranchers taking financial hits by the POTUS’s trade war with China.

USDA says part of the deal includes $1.2 billion to buy commodities – mostly dairy and pork – from farmers to stock up local food banks.

But it turns out USDA won’t be buying pork just from farmers.  It turns out that Virginia-based Smithfield Foods can apply for federal money under the bailout program.

Oh, did I mention that Smithfield Foods is owned by Chinese conglomerate WH Group.

So, let’s get this straight.  China and the U.S. are in the midst of a full-blown trade war.

As part of the war China has instituted 62 percent tariffs on U.S. pork exports.

So, the White House and USDA put together a plan to buy excess pork that otherwise would be headed to China and distribute it to food banks.  But Smithfield Foods will get federal money if it decides to ship surplus pork to USDA.

Now who in the White House wants to take credit for this irony of ironies?  Anyone?  Just raise your hand please?  Sure sounds like this amounts to pork barrel politics.  Let’s be clear.  Foreign conglomerates like Smithfield do not need bail-out money.

For its part, Smithfield thus far has been non-committal about whether it will apply for the federal bail out, but senior vice president of corporate affairs noted the company qualifies for the case and that “any approved vendor that can supply the requested product can bid for the contract.”

Meanwhile USDA is suggesting it doesn’t have the authority to prevent Smithfield from getting pork bailout cash.

Whoever in the White House and USDA that drafted the Market Facilitation Program doesn’t know much about agriculture.

The truth of the matter only huge meat packers like Smithfield can easily deliver pork to USDA feeding programs.

Perhaps USDA will see the error of its ways and award a significant portion of the available federal funds to a different foreign pork producer – Brazil’s JBS.  But it appears unlikely that individual pork producers will benefit much from federal pork purchases.

About Dave Dickey

Dave Dickey

Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for Big Ag Watch covers agriculture and related issues including politics, government, environment and labor. Email him at dave.dickey@investigatemidwest.org.

This column reflects the writer’s own opinions and not those of Big Ag Watch.

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