June 21, 2013
Today, Congressman J. Randy Forbes (VA-04), in a letter to President Obama, asked the President to appoint the Secretary of the Department of Agriculture to the Committee on Foreign Investment in the United States (CFIUS). Chaired by the Secretary of the Treasury, CFIUS includes representatives from sixteen U.S. departments and agencies deemed to have influence in matters of national security, but presently does not include a member representing U.S. food safety and supply interests. The proposed purchase of Smithfield Foods by Chinese company, Shuanghui International, places this issue at the forefront of public discussion and demands action be taken by President Obama to ensure this sale and future sales of U.S. food entities do not pose a threat to our national interests.
“In today’s global marketplace, food safety and security are ever-increasing concerns that certainly merit analyses with regard to national security,” said Forbes. He continued, “The recent proposed acquisition of American owned ‘Smithfield Foods’ by ‘Shuanghui International’ represents the largest ever sale of an American company to a Chinese firm and undoubtedly highlights the absence of a U.S. food representative on CFIUS’ board. Any foreign investment or acquisition of this magnitude, not just that of Smithfield, deserves the scrutiny of a CFIUS representative who can speak on behalf of an industry that effects hundreds of millions of Americans on a daily basis. I am calling on President Obama, as the sole person with the power to grant an appointment to CFIUS, to meet my request and provide the proper oversight to foreign investments of our food supply.”
A copy of Congressman Forbes’ letter to the President is below:
June 21, 2013
President Barack Obama
The White House
1600 Pennsylvania Avenue, N.W.
Dear Mr. President:
On May 29, 2013 Smithfield Foods, Inc. and Shuanghui International Holdings Limited announced that they have entered into a definitive merger agreement. Smithfield Foods is a $13 billion U.S. company and the world’s largest pork processor and hog producer. It controls 26% of pork processing in the U.S. and 15% of hog production. Shuanghui International and its subsidiaries are the majority shareholders of China’s largest meat processing enterprise, which is publically traded as Henan Shuanghui Investment & Development on the Shenzhen Stock Exchange.
This transaction, if approved, will be the largest acquisition to date of a U.S. corporation by a Chinese Enterprise.
One issue of particular concern surrounding this transaction is the food safety violations committed on the part of Shuanghui and the potential for those violations to carry over to the United States. In 2011, a chemical harmful to humans, clenbuterol, was discovered to be fed to livestock at sixteen Chinese pig farms and in 134 tons of pork products, including Shuanghui controlled farms. China has acknowledged 18 outbreaks of food-related clenbuterol poisoning between 1998 and 2007, according to a report on the Shanghai Food Safety website. Further, in March 2011 reports surfaced in Chinese social media showing raw pork that glowed iridescent blue when the lights were off. The Shanghai Health Supervision Department said that the pork had been contaminated by phosphorescent bacteria. Finally, in March 2013, thousands of dead pigs were found floating in the Huangpu River, which flows through the city of Shanghai; at least 12,600 pigs had been fished out. The New York Times reported that suspicions were growing that a crackdown by police on the sale of pigs that have died from disease, but are being illegally sold into the human food supply, may have contributed to the problem.
Additionally, there are concerns regarding food supply in the United States. Not only is Shuanghui expected to increase its exports to China from the plant in Smithfield, Virginia, but eight states – Iowa, Nebraska, Minnesota, Missouri, North Dakota, Oklahoma, South Dakota and Wisconsin – have laws barring foreign ownership of agricultural land. While the fate of these companies has yet to be determined, we cannot ignore the possibility of U.S. food supply being greatly diminished should these plants close.
Due to these concerns, we believe that it is imperative that any review and subsequent investigation include a strong emphasis on the food safety and food supply implications of this merger.
Currently, the Committee on Foreign Investment in the United States (CFIUS) does not include the Secretary of the Department of Agriculture. However, it is the U.S. Department of Agriculture that has jurisdiction over food safety and inspection within the United States, as well as foreign market access to U.S. products.
Congress purposefully chose not to specifically define what qualifies as an issue of ‘national security’ under the Foreign Investment and National Security Act, knowing that the term would naturally evolve over time. Additionally, current law provides you with the authority to appoint the heads of any other executive department, agency, or office, as you determine to be appropriate, to CFIUS.
While food safety and food supply may not have been traditionally seen as an issue of national security, we believe that such issues represent a critical infrastructure of the United States and as such, must be viewed through the lens of a national security concern. For these reasons, we request that you appoint the Agriculture Secretary as a member of the Committee on Foreign Investment in the United States, in order to provide the expertise required to review transactions that impact the safety and supply of food here in America. Thank you for your consideration of this request and we look forward to hearing from you.
J. RANDY FORBES
Member of Congress
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