The Agriculture Department has canceled a contract that would have awarded federal bailout money to a Chinese-owned pork producer after the company asked for the contract to be terminated amid a political backlash.
Smithfield Foods, which was acquired by the Chinese conglomerate WH Group, had been awarded $240,000 in pork payments under the bailout program set up to help farmers weather the White House’s trade war with China. Smithfield Foods asked that the contract be ended, and the Agriculture Department has agreed, the agency said through a spokeswoman.
“Smithfield requested to terminate their contract awarded under the Food Purchase and Distribution Program. USDA has agreed to the termination,” the agency said in an email.
The Agriculture Department is purchasing pork and other commodities from U.S. farmers under the Food Purchase and Distribution Program to help offset the damage from retaliatory tariffs imposed by China this summer. The administration has pitched the relief as a necessary short-term measure to help farmers weather the trade battle. It is buying $1.2 billion of products from farmers, including more than $500 million from pork producers, as part of the broader bailout.
Some critics, including Sen. Charles E. Grassley (R-Iowa), expressed alarm last month after the Agriculture Department confirmed that Smithfield qualified for the program. The USDA marketing service said in a statement last month that the products it will buy are “100 [percent] American produced.” In a separate statement, the USDA’s central communications office said the agency could not control whether federal money given to U.S. subsidiaries would enrich their Chinese owners.
Some watchdog groups have been critical of the decision to include Smithfield in the bailout and called for a federal probe into the matter.
“There needs to be an investigation by the Congress and/or the USDA Inspector General to determine how this program got put together,” said Tony Corbo, senior lobbyist at Food and Water Watch, which tracks federal agriculture programs. “It appears to me that no thought was put into all of the possible implications of awarding bailouts to companies controlled by foreign entities, especially China.”
Smithfield did not immediately return a request for comment. A company spokeswoman previously said that it met the federal government’s criteria for the program and that it employs thousands of Americans.
The termination of the contract was first reported by Reuters.