The author says Chinese and foreign investment in food producers could harm the U.S. | REUTERS Protect American food innovation

It’s obvious why foreign entities would be interested in purchasing American food companies: We’ve created the gold standard for global food production and food safety. So it’s no surprise Chinese food giant Shuanghui International recently announced its desire to buy Smithfield Foods, America’s — and the world’s — largest pork producer. China sees that it is in its strategic interest to obtain American innovation and expertise in food production, both to sell domestically and to potentially boost its exports and grow its agriculture economy.

The question is, are foreign purchases like this one in America’s interests, for our food security, national security, and for our economy? A bipartisan group of members of the U.S. Senate Agriculture Committee is raising this question.


Consider this: Smithfield is the world’s largest producer of pork, and its sale would be the largest acquisition of any American company by a Chinese company ever.

And Smithfield may only be the beginning. Experts testified at a recent Senate Agriculture Committee hearing that China is watching this deal and waiting in the wings to purchase more U.S. food companies.

Shuanghui’s move raises real concerns about foreign competitors acquiring decades of American innovation and food production technology, funded in part by American taxpayers. Over the years, taxpayer-supported research and development has contributed to highly efficient operations that have made American agriculture the best in the world.

This has driven American exports and job growth. Due in part to these investments, agriculture is one of the only areas where the U.S. has a trade surplus, and the U.S. Department of Agriculture estimates that every $1 billion in exports creates 8,400 American jobs.

The U.S. Department of Agriculture awarded close to 200 research grants between 2000 and 2012 to help make our pork industry the best in the world, and is expected to invest more than $800 million to grow the industry over the next 10 years. Foreign purchases of U.S. food companies allow other countries to instantly take technologies paid for by American taxpayers, use them to compete against our companies, and potentially cut into U.S. export market share.

Meanwhile, China’s protectionist policies block trade and put America’s companies at a competitive disadvantage.

Smithfield officials claim that before talks of selling to Shuanghui, there were discussions about the two companies forming a partnership, with each purchasing 20 percent of the other. But experts testified at our hearing that the Chinese government, for all intents and purposes, blocks American companies from purchasing Chinese companies. This is especially true given that Shuanghui is inextricably linked to the Chinese government through the company’s leadership structure.

Shuanghui says China needs more pork, but the Chinese government systematically and illegally blocks U.S. pork exports. This is hardly fair; it creates a trade imbalance in which the only way the United States can export more to the world’s fastest-growing pork market is to sell our pork companies.

Finally, Smithfield’s purchase calls for examining America’s overall food security. To be sure, the purchase of one American food company does not jeopardize America’s food independence. But Smithfield is our largest pork producer — will China or other countries seek to purchase our largest poultry, or dairy, or corn producers next? Is it in America’s security interests if in a decade or two our food supply is 30, or 60, or 90 percent foreign owned?

The Committee on Foreign Investment in the United States, which oversees foreign purchases of American companies to protect America’s national security interests, is currently reviewing the proposed Smithfield acquisition. However, because this board meets in secret and its decision-making criteria are hidden, it is unclear whether it is considering any of the issues discussed above.

Our bipartisan coalition of Senate Agriculture Committee members has urged Treasury Secretary Jack Lew to include U.S. Department of Agriculture and Food and Drug Administration experts in the review process so that food safety and food security will be effectively considered.

We are also examining whether our country’s current process for reviewing foreign purchases focuses on issues related to food safety, food security, the protection of taxpayer funded technology and innovation, and America’s strategic economic interests. Because it should.

Does the administration have the tools it needs to protect American interests in cases like Smithfield’s? If not, then that needs to change.

Debbie Stabenow (D-Mich.) is chair of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.