More on the politics of pork as Senators discuss the Smithfield sale
In May, news broke that Smithfield Foods Inc, the Virginia-based pork producer, had agreed to be acquired by China-based Shuanghui International in a deal worth $4.7 billion.
Because of its size, the deal will be subjected not only to shareholder scrutiny but regulatory review from the Committee on Foreign Investment in the U.S. (CFIUS), a watchdog panel headed by Treasury Secretary Jack Lew.
But before any of the review gets underway, Smithfield CEO Larry Pope has hoofed it up Capitol Hill to discuss the acquisition with members of the Senate Agriculture Committee. “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 legislators. “This is an opportunity for U.S. pork producers to grow.”
But the committee members –- Sen. Debbie Stabenow (D-MI), in particular -- had questions about all sorts of other stuff. As summed up by NPR:
"Is Shuanghui focused on acquiring Smithfield's technology, which was developed with considerable assistance by U.S. taxpayers?" asked Stabenow.
Those technologies include certain genetic strains of hogs, manure-management systems and meat-processing equipment.
"Can we expect that after the company has adopted Smithfield's technology and practices, they will increase exports to Japan, our largest export market, in competition with U.S. products?" she asked.
Throughout the 90-minute examination of the $4.7 billion deal, Stabenow peppered the pork executive with questions about:
- Fairness. "Can we really expect increased access for our pork products in China?"
- Consumers. "Will we see volatility in prices?"
- Precedent. "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."
All wonderful points. But the observation of the day comes from Senator Mike Johanns (R-NE). Take it away, Mike:
Johanns, a Nebraska Republican, said several senators are frustrated that the U.S. is more open to takeovers of agriculture companies than is the government in China.
“There is something really offensive about the reality that (China) can (buy a company) here, but a very aggressive company like Smithfield, which has kind of redesigned pork production in the U.S., cannot do this in China,” said Johanns, a former U.S. Agriculture Secretary. “To us that is very, very difficult.”
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