The administration has pitched its $12 billion bailout program as necessary to help farmers weather the long-running trade war with China, but critics have questioned whether funding will also enrich large and foreign-owned firms.
The bulk of the program consists of direct cash payments to farmers hurt by the downturn, although those payments have stalled amid the partial government shutdown. Agriculture Department officials announced Tuesday they are extending the deadline for applying for aid under this program by several weeks at a minimum.
As part of the bailout, the administration is also buying $1.2 billion in surplus products from farmers, including more than $500 million from pork producers, for distribution to food banks across the country.
In November 2018, a Chinese-owned pork firm rescinded its bid for bailout money after a backlash on Capitol Hill over the award. Smithfield Foods, owned 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. Sen. Charles E. Grassley (R-Iowa) criticized the payment, arguing taxpayer money should not go to an international firm.
JBS USA, with about 73,000 employees and 44 plants domestically, recorded more meat and poultry sales in the United States than any other company, according to rankings published by the trade journal National Provisioner. The company is owned and controlled by Sao Paulo, Brazil-based JBS SA, which boasts more than 200,000 employees worldwide, according to its website.
“Why is USDA rewarding another foreign-owned meatpacker through its meat procurement program after the blowback it received from purchasing pork products from Chinese-owned Smithfield?” asked Tony Corbo, senior lobbyist at Food and Water Watch, which tracks federal agriculture programs.
The Agricultural Marketing Service, which is administering the purchase program, said in a statement earlier this year that the products it will buy are “100 [percent] American produced.” Agriculture Department officials previously said qualified vendors who work for the agency, including Smithfield and JBS, would be allowed to make purchases under the program.
“USDA only buys American commodities, produced on American farms by American farmers,” a USDA spokesperson said in an email. “Approved vendors who choose to participate in USDA food purchasing programs, regardless of their business structure or domicile, provide direct benefits to U.S. farmers and ranchers.”
American Custom Meats, Chicago Meat and Proportion Foods also will sell products to USDA under the bailout program, according to agency documents.