Senate group needs to follow this paper trail
The U.S. Department of Agriculture – in a decision that defies logic and common sense – has allocated $22.3 million to compensate meatpacker JBS-USA for losses in its pork business incurred because of the tariff fight with China.
JBS USA is a subsidiary of JBS SA, a Brazilian-based meatpacker that is one of the largest in the industry. Why is taxpayer money designed to compensate farmers going to a controversial international business?
The question has been asked before. In November 2018 Smithfield Foods – owned lock, stock and barrel by a Chinese conglomerate – was to receive $240,000 to compensate for losses it incurred.
Smithfield likely would have gotten the money, too, if Sen. Charles Grassley had not intervened. The Iowa senior senator complained, and Smithfield dropped its bid for $240,000 in compensation.
It seems unlikely that the same will happen in JBS USA’s case. The U.S. headquarters of the conglomerate is in Greeley, Colo. Those who support the payout say the money will eventually trickle down to farmers. In addition, JBS USA employs 4,000 in Greeley and thousands more across the country and has hog-raising contracts with family farmers.
The $22.3 million allocated to JBS is felt regionally and locally. The payment includes $8 million for 3.8 million pounds produced from its Marshalltown, Iowa, processing plant and $8.9 million for 4.3 million pounds of pork from its Worthington, Minn., plant.
The Organization for Competitive Markets has pounced on the trade mitigation payments to JBS. It has started a petition drive to raise awareness and build momentum to stop it. The organization also is critical of foreign ownership of both Smithfield and JBS.
"It is a sad day when our own government will open its doors for global meatpacking corporations while keeping them closed during the government shutdown to American farmers," the organization wrote in a news release.
JBS SA also is embroiled in controversy in its home country. In 2017, banking and other scandals caused the United States to block meat imports from the country.
In fall 2019, U.S. Sens. Marco Rubio, a Florida Republican, and Bob Menendez, a Democrat from New Jersey, wrote a letter to Treasury Secretary Steven Mnuchin asking the Committee on Foreign Investment to review transactions made by JBS SA. In the letter, the senators alleged that the corporation may have engaged in illicit financial activity that involved bribing Brazilian office holders.
Given the circumstances, allowing the company to obtain taxpayer money seems particularly unwise. It is non-sensical for compensation designed to help U.S. meat producers survive a trade war go to foreign-own corporate giants.
We agree with Rubio and Menendez: the Committee on Foreign Investment’s investigative arm needs to look deeper into the JBS SA reimbursement.