Sens. Chuck Grassley (R-Iowa), Debbie Stabenow (D-Mich.), Joni Ernst (R-Iowa) and Sherrod Brown (D-Ohio) sent a letter to the U.S. Department of the Treasury on March 24, 2016, asking for their involvement in any review process of the acquisition.
On his website, Grassley states, “The food and agriculture sectors are part of the nation’s critical infrastructure, and this merger raises questions about national security because of the need to ensure a safe food supply. While foreign direct investment is generally positive, allowing state ownership of a major player in the seed and chemical business is something that needs to be carefully reviewed. The Department of Agriculture and the Food and Drug Administration are the experts on the food system, so it’s a natural fit for them to be a part of any CFIUS [Committee on Foreign Investment in the U.S.] review. It’s clear that China is looking at these recent purchases of companies with food production expertise as part of a long-term strategic plan and a component of their national security. We need to be looking at it the same way.”
The letter (PDF, 144KB) requests for the USDA and the FDA to be included in any review or decision-making on the proposed acquisition. The letter also references concerns of the Shuanghui-Smithfield acquisition, a Chinese company $4.7 billion takeover of the U.S. pork giant, citing the growing foreign investment in U.S. agriculture and the need for a careful review process.
The letter cites growing concerns within the agricultural industry of foreign investment and says, “The risk of negative outcomes is heightened to the extent that an acquired U.S. agricultural asset becomes in some part governed by a foreign government with clear strategic interests. In fact, the potential for unpredictable behavior from global farm sector participants is a great challenge for the United States as the importance of trade to American agriculture continues to grow and food systems become more integrated. For instance, nonmarket behavior due to state ownership could lead to inconsistent or seemingly arbitrary treatment of U.S. farm products in key export markets, particularly when company governance includes governments of countries with which the United States exchanges a high volume of trade.” FG
