SNOUTS IN THE TROUGH
In the early days of Smithfield Foods, the company signed a few contracts with large North Carolinan producers to provide tens of thousands of pigs for its slaughterhouse. It then took over those producers, who had to take Smithfield's price for their farms because they had nowhere else to slaughter their pigs. Once Smithfield owned these large farms it began overproducing pigs so that the price of pork dropped from 60 cents per pound to eight cents per pound. Since it costs 36 cents per pound for a farmer to raise a pig, most other US pig farmers went to the wall. Only pig farmers who sign contracts with Smithfield survive. These contracts are never negotiated. The desperate farmers will sign the contract the way Smithfield writes it.
Typically, Smithfield contracts require farmers to use their property for security and borrow approximately $200,000 to build warehouses according to the firm's specifications. In return, Smithfield promises the farmer approximately $20,000 per year. The farmer owns the warehouse and pays the insurance and interest to the bank. Smithfield owns the feed and the pigs. The farmer also owns the manure, but Smithfield does not pay the farmer enough for him to be able to legally dispose of it. That's his problem and the problem of his community as he pollutes the air and water with the excess manure.
Often Smithfield's contracts last only one year, even though it will take farmers 20 years to pay off their warehouse mortgage. When it is in Smithfield's interest to buy more land, the company has the power to make future contracts so burdensome that farmers go bankrupt. Smithfield can then buy their property from the bank for pennies on the dollar. Since these farms are valueless without a Smithfield contract, there are no other bidders. In this way Smithfield came to control pork production in North Carolina.
Even with the wholesale price of pork as low as eight cents per pound Smithfield continues to make money, because the price the consumer pays for Smithfield's processed pig-meat products stays the same. And with Smithfield owning the sole slaughterhouse, it squeezes the farmer until it has a monopoly on farm production. This is one of the reasons why the US Senate, along with many national legislatures, is considering legislation that will ban the ownership of farms by slaughterhouses. Smithfield's 'integration' system, through which it is farmer, slaughterhouse and meat packer, puts small farmers at a catastrophic disadvantage.
There are many studies that show that factory farms have a devastating impact on rural economies and quality of life. There is not a single empirical study showing net benefits to rural communities. Studies show that property values in areas hosting pork factories fall, on average by 30 per cent. If you drive through the US's rural communities, you will see bankrupted hardware and feed stores (factory farms don't buy locally), boarded up high streets and closed banks, churches and schools. The US's heartland and historic landscapes are being emptied of rural Americans and occupied by large corporations.
Traditional farms are exempt from laws regulating the disposal of manure, because for them manure is not waste but a valuable fertiliser. However, pig factories produce far more manure than is needed to fertilise the fields around them. The costs of properly treating and disposing of this waste make factory farming uncompetitive for traditional farms - unless they violate numerous environmental laws. Because factory meat producers must break the law in order to survive, the industry's business plan relies on the assumption that pork factories will be able to evade prosecution by improperly influencing government officials.
Smithfield uses its wealth to buy politicians, paralyse regulatory agencies and break health and environmental laws with impunity. In North Carolina Smithfield made business partnerships with then state and US senators Wendell Murphy and Launch Faircloth, who protected the company's interests in local and federal legislatures. Using these alliances and adept campaign contributions, the pig industry has been able to corrupt and control the North Carolina state senate. The state's largest newspaper, The News and Observer, won the Pulitzer Prize for its five-part investigative report disclosing how the factory pig industry had captured and corrupted the state senate. And in 2000 Murphy was made a director of Smithfield. He now owns 15 per cent of the company's shares.
Politicians who oppose the pig barons are punished. When North Carolina's Duplin County state assembly-woman Cynthia Watson began speaking out against Smithfield's impact on her farm community, the pig industry launched a savage multi-million dollar attack, spending as much as $510,000 a week for two years to destroy her reputation. Watson was subsequently unseated, and the pig barons succeeded in sending a powerful warning to all North Carolina's senators not to oppose their industry.
Citizens who protest get the same treatment. When communities have opposed the siting of pig factory farms within their localities they have had their democratic rights removed. In Iowa, North Carolina, Michigan and many other US states and Canadian provinces, public officials have stripped local governments of their decision-making powers over these facilities. Similarly, Polish local officials who opposed Smithfield developments have been overruled by national authorities. The industry routinely uses bullying lawyers and illegal intimidation, threats, harassment and violence to terrorise and silence its critics - including those among its own workers. A group of Nebraska citizens who made comments during a public hearing on a pig factory planning proposal were sued by Nebraska's largest livestock producer. Neighbouring farmers are routinely sued for participating in public hearings or speaking out against the pig industry.
Taking over Europe via Poland
Just as Smithfield used North Carolina to launch its takeover of US pork production in the 1980s, so Poland is now being used as Smithfield's platform for launching its bid for monopoly control of pork production in Europe.
In 1999 Smithfield purchased Animex, the state-owned conglomerate of slaughterhouses and giant communist-era farms responsible for exporting Polish sausage and ham to the US. The deal was a bargain, Smithfield paid only $55m just after Animex had made, at state expense, extensive renovations to its facilities. The estimated value of the company following these improvements was $500m, causing Smithfield CEO Joe Luter to boast that he paid 'only 10 cents on the dollar' for Animex.
But gaining monopoly control of national slaughterhouse capacity is difficult in Poland, because there are over 4,000 slaughterhouses in the country. Smithfield's strategy? Get the government to close down the competition for them.
Following a three-hour meeting between Luter and Poland's then prime minister Jerzy Buzek, the Polish government began closing hundreds of small slaughterhouses. Buzek's minister of agriculture promulgated regulations that would put up to 50 per cent of Poland's slaughterhouses out of business.
The government justified these new rules under the fraudulent pretence that small slaughterhouses must be shut down to comply with the EU regulations. EU regulations clearly state, however, that small slaughterhouses may be kept open to serve regional markets. Germany, France and Sweden have all fought to keep their small slaughterhouses and milk plants open, and even subsidise them in the knowledge that local markets and food distribution depend on them. Once small slaughterhouses disappear, local markets quickly follow.
Furthermore, large high-tech slaughterhouses do not make for a safer food supply. In the US and the UK the closure of small slaughterhouses coincided with huge increases in meat-borne disease (by 300 per cent and 500 per cent, respectively). This is because large centralised slaughterhouses encourage the consolidation of pork production on factory-farm lines; disease is rampant in factory farms, and the long transport distances resulting from centralisation stress the animals and spread disease further. In addition, technologies that increase line speed inside the slaughterhouse multiply worker errors and make proper inspections impossible. Now the big slaughterhouses are insisting on the controversial technology of irradiation in order to solve the problems of disease.
The Polish government took a number of other steps to facilitate Smithfield's takeover of Polish agriculture. First, it legalised the uncontrolled use of liquid manure and tried to dismantle the country's Animal Welfare Act. Then it allowed Smithfield to use front companies to buy and lease farms in Poland, despite official policies forbidding foreigners to purchase Polish agricultural land. Finally, it gave large pork-export subsidies to Smithfield amounting to 55 cents per kilogramme. The subsidies were supposed to aid Polish farmers, but as Smithfield imports both its pigs and the feed it is difficult to see how.With this help, Smithfield has converted as many as 35 Polish state farms into pig factories. One in Nielep, West Pomerania, already houses 30,000 pigs. To circumvent Polish laws, some of these factories are listed as the property of front companies wholly owned by Smithfield. Prima Farms, for example, is officially owned by two Poles, but every important decision must be signed by Mr Griffith of Smithfield. In this way, Smithfield can capture subsidies from the EU intended for Polish farmers.
The pattern is almost identical to the route Smithfield took in Carolina. Soon Smithfield will own all the landscapes of Poland, and the farmers who are so critical to the country's culture and democracy will be wiped off the land.
The biggest and the worst
Smithfield Foods is the world's largest pork producer and packer. It markets approximately 12 million pigs a year in the US. In the last fiscal year, Smithfield's profits were approximately $224m on $5.9 billion in sales. The company has pig production facilities in 10 US states, Brazil and Mexico, as well as slaughtering and processing facilities in 11 US states, Canada, France, Mexico and Poland. Its operations have consistently been found guilty of gross environmental violations.
Smithfield in Poland
Last year Smithfield used a Polish-registered front company called Prima Farms to begin operating pig factories stocked with imported sows in the the northwestern Polish region of Western Pomerania. Currently, Prima has at least 11,000 sows, reportedly Pig Improvement Company (PIC) stock imported from Britain, housed in former state farms at Byszkowo and Zensko. Prima intends to confine up to 15,000 more sows on its farms, and plans to produce 500,000 pigs for Smithfield's AGRYF slaughterhouse in the town of Szczecin. It expects to be transporting 11,000 pigs a week to AGRYF by 2006.
In the meantime, Prima is moving aggressively to acquire and renovate state farms to confine feeder pigs. It already has one nursery for piglets and at least three other occupied farms in Western Pomerania. Smithfield is in the process of setting up operations at Kielpino and at Liskowo, where it has encountered fierce opposition from the public. It is also reportedly in the process of establishing pig factories at Wierzchowo, Ognica and Suliscewice.
All this represents, in all probability, only a partial list of ongoing developments in Western Pomerania.
Some of the Prima pigs are being shipped to properties of the Smithfield-owned company Animex at Wieskowice and Trzcielin. Last spring Animex was forced by local authorities to move approximately 7,000 pigs illegally housed at Rekoniewice, southwest of the city of Poznan. The company still controls the Rekoniewice farm, however, and there are reports that is either confining or preparing to confine feeder pigs at nearby Stara Dobrowa and Goscieszyn.
In the northeastern province of Warminsko-Mazurskie, Animex is renovating a number of former state farms as pig factories. In Warminsko-Mazurskie there are already pigs present at Wronki Wielkie, Kozaki near the border with the Russian federation of Kaliningrad, and Wyrandy. It has been reported that there are 10,000 feeder pigs at Radkiejmy, while a reported death loss of 1,760 pigs in six months suggests an even larger number of animals at Bykowo. Farms at Rozynsk and Koliszki are in the early stages of renovation. All in all, there are plans to transport 250,000 pigs a year to the Warminsko-Mazurskie slaughterhouse at Elk, which exports meat products to the UK under the brand name PEK.
Smithfield has been quoted in Pig International magazine to the effect that a complex of pig factories in the southeast of Poland will be delivering another 250,000 animals a year to the Constar plant in Starachowice by 2006. An investigation uncovered a probable Smithfield front company confining PIC sows at Nowy Machnow in the southeast of the eastern Polish province Lubelskie. There are also reports of activity in three other sites in the area.
Smithfield predicts that its own Polish pig factories will produce around 20,000 pigs per week by 2006, and that an additional 10,000 animals will come from farmers raising Smithfield-owned stock under contract. There is no reason to believe (judging by the firm's record in the US, or its continued acquisition of land and the excess capacity being developed at its existing facilities) that Smithfield's expansion in Poland will stabilise. There is every reason to believe that the firm will - as in the US - strive for complete vertical integration and that it will deny farmers that do not accept its yoke a market in its plants.
Written by: Robert Kennedy Jr., from The Ecologist Magazine (Dec. 03/Jan 04). Robert Kennedy, Jr. is the president of the Waterkeeper Alliance, an international grassroots coalition dedicated to protecting water systems from pollution.
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