Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Monday, October 30, 2006

Missouri Attorney General Jay Nixon Should Intervene in Smithfield - PSF Merger

AG Nixon should intervene in Smithfield's purchase of PSF

By Russ Kremer, Missouri Farmers Union President and Osage County farmer

JEFFERSON CITY, MO - Industrial livestock development by meatpacking corporations raising pork has been a controversial issue in rural America for more than a decade. During that time, the vast majority of hog production has moved away from thousands of diversified small-scale family farms and concentrated into the hands of a few corporate owners. This development has been divisive in rural communities, and has devastated independent family farmers who are dependent upon hog production as one of their key income-producing areas of farming.

Here in Missouri, this story began with the rise of Premium Standard Farms (PSF) and its ambitious growth in the Northern part of the state. Bolstered by a last-minute move in the state legislature that allowed it to get around Missouri's anti-corporate farming law, PSF bought land and developed the largest industrial livestock production facilities in the Midwest. Their model of owning the land, the livestock and the meat processing facility completely locked existing farmers out of the system. Their high volume of manure brought serious environmental and public health risks to the surface. Their business operations brought serious bitterness to the communities where PSF operates.

New chapters are added to this sad story every year. Additional industrial hog facilities were built under contract for other meatpackers or their procurement partners in Western and Northeastern Missouri. State laws were passed to provide safeguards and community-based protections over the negative impacts of industrial livestock development. PSF struggled under constant financial turmoil, even declaring bankruptcy. In recent years, state-level safeguards have been under steady assault from industrial livestock promoters at the State Capital in order to spur industrial livestock expansion efforts.

Last week, an entirely new chapter opened in the industrial livestock tale as the world's largest pork producer and pork packer, Smithfield Foods, agreed to purchase the second largest, PSF. If this deal is allowed to proceed, Smithfield will wield a huge amount of marketshare. With PSF's assets in place, Smithfield will own 1.1 million sows out of the approximately 6 million sows in the nation. In addition, Smithfield will move from owning 26% of national pork processing capacity to over 31%.

These figures are shocking to most independent family farmers, and reveal the need for federal action that will mandate fair and competitive markets in agriculture. Poultry is already locked up by Tyson. Cargill controls grain. ADM controls ethanol. Now Smithfield is really the only major player in the pork industry, and they reap large advantages with this kind of market power. Federal policy that bans corporate meatpackers from owning livestock is the surest and simplest way to accomplish fair markets. This issue will certainly come up as we re-write the next federal farm bill over the coming two or three years, and family farmers hope that the Congress will do the right thing and pass the packer ban to restore competitive markets.

But in Missouri, there is also hope for local action that can stop some of the detrimental impacts of the proposed PSF buyout by Smithfield. Way back in the 1970s, in what seems like lifetimes ago in the rapidly changing agricultural marketplace, Missouri legislators had the foresight to outlaw corporate agribusiness from owning and farming land in the state. In 1993, PSF was able to play a political game and get three counties exempted from this state statute. Putnam, Mercer and Sullivan Counties became the home of PSF's production and processing facilities. At the time, this was described as a PSF-only deal designed to improve the economy of these three impoverished rural counties.

It is now time to revisit the three-county exemption from the Missouri corporate farming law. After almost 15 years of this experiment in industrial livestock development, we can see that much of the marketing pitch for this type of agriculture has shown to be full of false promises. Missouri's agricultural future should be based upon the strength of its vast majority of diversified independent family farmers; not a handful of corporate factories where profits flow to corporate boardrooms.

Attorney General Jay Nixon could provide the important backstop needed to slow this deal down and allow a thoughtful, democratic process to play out over such an important issue. Smithfield's approach of gobbling up most of their competitors should concern us all. Let's put them on notice that Missouri is going to stand up to their way of doing business from the very beginning. Smithfield shouldn't have the advantage of skirting Missouri's corporate farming law. Attorney General Nixon could intervene and help to shed some light on this important debate.

post a question or comment here or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

6 Comments:

  • At 11:16 PM, Anonymous Anonymous said…

    You forgot about the thousands of jobs that PSF created for people in the areas>

     
  • At 11:24 PM, Anonymous Anonymous said…

    Whatever benefit PSF might have brought to Missouri, i promise you, Smithfield will take it all, so the "thousands of jobs" will come and go as Smithfield sees fit.

    Also, you should remember, there also used to be thousands and thousands of hog farmers in Missouri and their ability to make a living got sold down the river by PSF first and then by Smithfield (and others) and now Smithfield again

     
  • At 3:46 PM, Blogger K said…

    Thousands of jobs created by a bunch of hogs who probably put people in a stranglehold in order to make a living. That is pure bullcrap and we should be DARING to keep our kids off of their corporate nooses.

    I would rather see my son smoking a joint then signing his life away to come home in a bodybag for the people running these corporations.

    So what if they provide jobs for people. I don't want to hear you complaining if your sons come home in bodybags in the next decade or so, because if the people sending them off to die are giving people jobs then they are great guys right?

     
  • At 4:07 PM, Anonymous Anonymous said…

    Right. Whoever Nixon appoints as Director of Ag is going to be crucial. Any idea who it'll be?

     
  • At 5:08 PM, Anonymous Anonymous said…

    Having lived and grown up in northern Missouri I have witnessed the impacts PSF has had on our area. PSF employs over 2500 people in norther Missouri. They are not putting a strangle hold on small pork farmers in this area. If PSF leaves and i assure you Smithfield will have no qualms of moving these jobs elsewhere. That would destroy the communities that PSF has helped to build.
    PSF gives out scholarships to students every year they support local schools. Are you also forgetting about the millions of dollars they pay in taxes? All of us around PSF are supporting them! Jay Nixon and the Missouri Senate need to keep their noses to themselves and not meddle In the lively hoods of thousands of families. It will affect everyone in northern Missouri negatively in one way or another, destroying several communties and counties if the government doesnt back off and Smithfield closes.

    This clean air system they are trying to force down the throats of Smithfield is a joke. It has been proven it doesnt work. Moral of the story

     
  • At 8:06 PM, Anonymous Anonymous said…

    You know I love when people put their fingers in someone elses business. Mr. Crabtree I see your from Nebraska and Russ Kremer is from osage county. I would like to see both of you and tour the area! Go around to local business to the schools and ask them where they would be without PSF, now Smithfield. I assure you will find the general concenses is very much in favor in PSF staying here. Towns would disapear off the map, in a time of jobs needed you are willing to risk 2500 jobs? Thats just work from PSF if they close small businesses would be forced to scale way back and even close. Its people such as Russ Kremer are the cause of jobs moving overseas. I assure you us residents in here in Northern Missouri will fight side by side with PSF, This is our livelyhood you are tampering with!

     

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