A NEW REPORT SPOTLIGHTS HOW AGRICULTURAL ACQUISITIONS AND BUSINESS STRATEGY LINKED TO THE CHINESE GOVERNMENT HAVE AMASSED PRODUCTION AND POWER, AND IT’S BEING CALLED INTO QUESTION BY POLICY THINKTANK AMERICA FIRST POLICY INSTITUTE (AFPI).
It’s been more than a decade since China made very public, very large investments in its future to feed its own people and gain greater control over international agribusiness.
In 2013, WH Group (then known as Shuanghui International) purchased Smithfield Foods for $4.7 billion, which was a U.S. company with 25 U.S. plants, 460 farms, and contracts with 2,100 producers in 12 states. A year later in back-to-back months, COFCO (China National Cereals, Oils and Foodstuffs Corporation) bought two major agricultural trading companies: Noble Agri and Nidera. Then in 2017, ChemChina acquired Swiss-based Syngenta for $46 billion.
These acquisitions highlight the production and power China has amassed, and it’s being called into question by policy thinktank America First Policy Institute (AFPI).
“We know that many of these state-owned enterprises have an obligation to the CCP, and that is to report in and turn in all of the intellectual property they collect around the world or trade secrets and turn it in the Chinese Communist Party, giving them an edge and their ability to offshore a lot of our production from the United States,” says Ambassador Kip Tom, Indiana farmer and AFPI expert.
In a recent report, AFPI spotlighted the following vulnerabilities for U.S. farmers and consumers:
• Smithfield controls 23% of U.S. pork processing
• The U.S. market accounts for 23% of The Syngenta Group’s revenues
• DJI drones are used by U.S. farmers to collect field data
One policy recommendation from AFPI is for Syngenta and Smithfield Foods to “divest to a domestic company or, at a minimum, a company not principally managed by an adversary of the United States.”
“Xi Jinping and the Chinese Communist Party pose a threat to American farmers and U.S. food security,” says Congressman John Moolenaar (R-Mich.), Chairman of the House Select Committee on the Chinese Communist Party. “They’re engaged in economic aggression against the United States. We must protect our farms, feed mills, processing plants, and slaughterhouses. The CCP strategy is two-fold, undermine U.S. food security while siege-proofing their own.”
Ambassador Tom says in addition to direct or majority ownership by the CCP, global supply chains have evolved over recent decades resulting in U.S. farmers being more susceptible to negative impacts.
“We’re going to need to do everything we can do in our regulatory regime to make sure we can bring back these supply chains,” Tom says. “With the amount of sourcing that we’ve done in chemistries around the world, our fertilizer production, computer chips that run our tractors, everything, we are very vulnerable.”
Another aspect of Chinese ownership that has come into focus is foreign owned land in the U.S. The most recent reports peg a minimum of 35 million acres of farmland (3.4% of all U.S. ag land) is foreign owned, with Chinese companies owning around 350,000 acres. Of that, Brazos Highland owns 102,345 acres, and Smithfield owns 97,975 acres. The topic garnered attention at the state level with more than a handful of states passing legislation limiting foreign farmland ownership.
“Farmland is critical in the United States,” Tom says. “We know that the Fufang Group tried to place a [corn milling] plant up near Grand Forks, North Dakota, near an Air Force base, that was a strategic problem. That same group came to Indiana, and we stood up and said the same thing, ‘no, this shouldn’t be allowed.’ So it comes back to the states to get involved and make sure we put the measures in place to not allow this to happen.”
AFPI applies a skeptical eye on DJI drones, a Chinese company currently the largest manufacturer of drones worldwide.
“I would be very supportive, and I hope many of us farmers would be, to see the DJI drones go away. We should never underestimate the Chinese ability to use any information that they gather from the United States,” Tom says. “But we need to make sure that we shore up the production of drones here in the United States with American parts and information that’s processed here in the United States.”
In addition to their agribusiness investments, China has ramped up its public-funded research. Since 2008, China has outspent the U.S. in comparable public sector spending for agricultural research, and furthermore, since 2019, China has spent twice as much, or double, as the U.S.
“This is all part of the BRICS initiative, Brazil, Russia, India, and China. And we know that actually the Brazil has fast forward their agriculture development in their nation,” Tom says. “We know that now they are leading suppliers and a lot of the commodities that are produced in the world today, whether it’s corn, soybeans, wheat, beef, hogs, and they’re getting into the biofuels. Because of the theft of some of these intellectual property products that we had here in the United States, namely genetics, corn genetics, we know that China in a few years here will probably be self -sufficient on corn.”
AGWEB