Nation & World

Senators raise alarm over foreign payments from USDA bailout

Democrats call aid to foreign-owned agribusinesses 'unacceptable'

Agriculture Secretary Sonny Perdue at the U.S. Embassy in Buenos Aires, Argentina, on July 28, 2018. CREDIT: Bloomberg photo by Pablo E. Piovano.
Agriculture Secretary Sonny Perdue at the U.S. Embassy in Buenos Aires, Argentina, on July 28, 2018. CREDIT: Bloomberg photo by Pablo E. Piovano.

WASHINGTON — A group of Democratic U.S. senators is urging Agriculture Secretary Sonny Perdue to ensure that a bailout program intended to help American farmers weather President Donald Trump’s trade war does not benefit foreign-owned agribusinesses.

The program, which buys surplus commodities from farmers and ranchers, was pitched as a way to protect farmers during the U.S.-China trade war. But the USDA hasn’t turned away foreign-owned corporations that want in, too.

Earlier this year, taxpayer money was used to buy $5 million in pork products from a Brazilian-owned meatpacking firm. A Chinese-owned pork producer was slated to tap the program until the contract provoked intense criticism — including from Iowa Republican U.S. Sen. Chuck Grassley — and eventually was canceled.

“It is unacceptable that American taxpayers have been subsidizing our competitors through trade assistance,” according to a letter addressed to Perdue and signed by Sen. Debbie Stabenow of Michigan and eight other Democratic lawmakers. “We ask that you ensure these commodity purchases are carried out in a manner that most benefits the American farmer’s bottom line — not the business interests of foreign corporations.”

Under a $12 billion bailout program announced last year, the Trump administration set aside $1.2 billion to buy surplus products from farmers, including more than $500 million from pork producers. Last week, the White House announced a separate $16 billion bailout that includes $1.4 billion in commodity purchase relief for farmers.

The letter’s other signatories are Sherrod Brown, D-Ohio; Chuck Schumer, D-N.Y.; Patrick Leahy, D-Vt.; Richard Blumenthal, D-Conn.; Patty Murray, D-Wash.; Amy Klobuchar, D-Minn.; Tammy Baldwin, D-Wis.; and Kirsten Gillibrand, D-N.Y.

The senators pointed to “lucrative” contracts that benefit foreign-owned entities and direct taxpayer money abroad. Those contracts include $62.5 million in pork products from JBS USA, which is owned by Brazil-based JBS SA.

ARTICLE CONTINUES BELOW ADVERTISEMENT

The food purchase program also was slated to buy $240,000 in pork products from Smithfield Foods, which is a subsidiary of Chinese-owned WH Group. Smithfield later asked that the contract be canceled after a political backlash.

Grassley, a farmer and member of the Senate Agriculture Committee, was among those who expressed alarm that a foreign-owned company could benefit.

“Whether it’s the WH Group, which is closely tied to the Chinese government, or JBS SA, which is benefiting from the U.S’s loss of market share in certain countries, it is counterproductive and contradictory for these companies to receive assistance paid for with U.S. taxpayer dollars intended to help American farmers struggling with this Administration’s trade policy,” the senators wrote.

Perdue contends the program already buys only American-made products.

“JBS is a Brazilian company operating in the United States, buying product from U.S. farmers,” he said in a statement. “ ... Companies are able to buy from our farmers more because we are buying that product and taking it off the market.”

Dustin Baker, director of economics for the National Pork Producers Council, cautioned against limiting which pork producers could take advantage of the food purchasing program. He said reducing the number of producers trying to get relief would only drive up the delivery costs of getting the products to food banks and needy families.

Plus, Baker said, just because some producers are foreign-owned doesn’t mean they can’t be “the lifeblood of the economies in which they’re located.” Many of these companies provide thousands of jobs in rural areas and, like their American-owned competitors, must also comply with USDA guidelines, he said.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.