China on farm-buying spree

Prof. Usha Haley of West Virginia University is warning that if and when the Shuanghui International Inc. purchase of Smithfield Foods Inc. goes through, that will open the floodgates for more Chinese purchases of U.S. food companies and farms.

Part of the Smithfield deal involves ownership of about 400 hog farms.

Haley speculates that China could gain ownership a majority of the farmland in the United States.

“I can give it to you in writing that if this acquisition goes through . . . within five years a great proportion of our large farms (will be) controlled by the Chinese,” Haley says.

And, she says, then China will use that control to start increasing food prices.

Ian Cumming is one of the few journalists who has written about the aggressive purchasing of Canadian farms by Chinese buyers. In articles in the Ontario Farmer newspaper, he has reported on several Chinese delegations scouting out investment opportunities.

Haley says she’s not against Chinese investment in the U.S., but says the Chinese should not be allowed to gain control of strategic industries, such as food production.

Haley testified before the Senate Committee on Agriculture and her views are featured in a Meatingplace Magazine article.

Haley said it’s wrong to consider Shuanghui an independent privately-owned company. She said nothing important happens in China without government consultations and approval, and that Shuanghui should be considered part of the Chinese government.

She says if she were in China’s position, she would have the same strategy to gain control over U.S. food production. That’s because food is extremely important to the Chinese people.

She predicts that Shuanghui will import basic pork cuts such as ham from Smithfield, will blend them with Chinese-produced pork into processed products and sell those around the world, including back to the U.S.

She predicts there will be food-safety scandals with these pork products that will damage the Smithfield brand name and the U.S. reputation for meats.

She said it’s wrong to think that the Chinese have a competitive advantage because of plentiful and cheap labour. She said government subsidies and loans are a far more important factor.

She also warns that the Chinese economy is far less robust than most people think, mainly because there is an enormous amount of debt that has been taken on by local governments to subsidize factories to export products.

She estimates the Chinese government debt load, when all levels of government are included, is about 180 per cent of Gross National Product. That would make its debt burden higher than the U.S., much higher than Canada and even Italy at 128 and Greece at 158 per cent.

S. Korea trade talks resume

Five years after they were suspended after Bovine Spongiform Encephalopathy (BSE or mad cow’s disease) was identified as the cause of the death of an Alberta cow, trade talks have resumed with South Korea.

The talks collapsed in the wake of that BSE alarm, dashing high hopes that Canadian hog and beef farmers could substantially increase exports to South Korea.

Now the talks are set to resume Nov. 25 to 29 in Seoul, South Korea.

Korea wants duty-free access to the Canadian market for its Kia and Hyundai cars, but Canada’s auto industry is objecting, saying that would not be fair because Korea maintains auto-industry restrictions.

Canada was put at a disadvantage when South Korea went on to negotiate a trade agreement with the United States.

Dairy Farmers of Canada's environmental agenda

Dairy Farmers of Canada held a secret session to discuss its environmental responsibilities.

Reporter Frances Anderson of Ontario Farmer was denied access when she showed up for the meeting in Ottawa.

She reports that the farmers adopted a 10-point program that ranges from minimizing  the impact of nutrient application on water and air to respect for workers rights.

It's all blather.

Nobody from Dairy Farmers of Canada or the provincial marketing boards is going to police millionaire quota holders to ensure they respect these standards.

And maybe that's why the organization didn't want any reporters at the meeting to inform the public.

Pigeon investors are testifying

The Crown Attorney Lynne Robinson is presenting a parade of disgruntled investors who bought pigeons in the jury trial of Arlan Galbraith who is accused of fraud in the way he operated Pigeon King International of Waterloo.

One day this week is typical.

John Guetter of Woodstock said he lost $150,000 and ended up eating a lot of squab (pigeon meat) after Galbraith declared bankruptcy in June of 2008.

Clarence Murray of Saskatchewan said he lost $50,000 and that he invested in breeding pairs of pigeons because Galbraith said he had sales deals to Saudi Arabia and China.

Mary Mackay of Embro said she and her husband signed three contracts with Pigeon King International and ended up losing $250,000.

Lynn Strenzke and her husband, who farm near Maryhill, were late investors and were told the market would be for squab. She said they lost more than $190,000.

Galbraith has been blaming critics’ “smear campaign” for ruining the company.

He has been defending himself, despite repeated and strong advice from the judge who presided at the preliminary hearing that he needs a lawyer.

The jury trial is expected to last until Christmas.

Gap between big, small dairy farms widens

The profitability gap has widened between large and small-volume dairy farms in Ontario, according to a new research publication by Predrag Rajsic, Postdoctoral Fellow in the Food, Agricultural and Resource Economics department at the University of Guelph.

In the 1980s, those who bought quota lowered their cost of production by increasing volume sold.

Now it’s both technology and larger volumes that are enabling larger-scale producers to achieve a lower cost of production, Rajsic found by delving into data from the Ontario Dairy Farm Accounting Program.

He compared the situation now with a similar study 25 years ago and found that the small-scale farms are falling behind and, if nothing changes, will disappear.

He notes that this is contrary to the intentions of the politicians and dairy farmers who sought supply-management powers to preserve small family farms.

What’s holding back an even faster widening of the gap between the most and least profitable dairy farms now is the inability of farmers to buy quota in Ontario.

That’s because the policy-makers have imposed a cap on quota prices which has all but dried up offers to sell quota.

Stewart Cressman re-elected

 When I was a lad, growing up on a farm near New Dundee, I loved fishing for trout.

My closest friend's uncle owned a farm through which a neat spring-water creek ran, and he stocked it with trout and welcomed us to fish on Sunday afternoons.

That farmer's son is Stewart Cressman who I have, obviously, had the pleasure of knowing for many years. He is a gift to Canadian agriculture.

And so I was pleased to see that he has been re-elected chairman of Swine Innovation Porc and Normand Martineau vice-chairman during the organization’s annual meeting in Edmonton.

Cressman is also chairman of the Agricultural Research Institute fof Ontario, vice-chairman of the Livestock Genetics Advisory Board and a member of the Ontario Swine Health Advisory Board.

He has been a beef and hog farmer on the family farm he took over in 1980.

Cressman said Swine Innovation Porc has been effective through its membership in Swine Cluster 1 and now is about to transition to Swine Cluster 2.

The Board of Directors of Swine Innovation Porc has nine members:

• Beth Clark, pork producer representing Ontario Pork
• Stewart Cressman, pork producer representing the Ontario pork sector
• Neil Ketilson, representing the Saskatchewan Pork Development Board
• Jean-Paul Laforest, Chair of the Science Advisory Body
• Normand Martineau, pork producer representing the Les Éleveurs de porcs du Québec
• Danielle Pettigrew, representing the Quebec pork sector
• Daryl Possberg, pork producer representing Alberta Pork Industry Services
• Mike Teillet, representing the Manitoba Pork Council
• John Webb, representing the Pork Value Chain Roundtable

GMO vote defeated

Washington State voters turned thumbs down on labeling genetically-modified foods in a plebscite in which votes are still being tallied.

They did the same in California, even though polls indicate more than 90 per cent of both Republicans and Democrats favour mandatory GMO labeling.

Columnist Richard Schiffman for The Tribune newspaper writes that the public should move on and focus on the real issues – the power of Monsanto and similar companies, the reduction in the rain forest and “factory farming” that involves the use of growth-promoting hormones, etc.

The tide is turning. When big-city newspaper columnists write that GMOs are fine, the tide is certainly turning. 

What I hope comes next is a realization that the big companies, such as Monsanto, dominate GMOs because the regulatory burden is as heavy as it is for pesticides. That's massive overkill. 

It also means that only products that are attractive to large corporations make it to market.

If GMO plant and animal breeding were as unlimited as conventional breeding, there would be thousands of new products coming to market that would be of tremendous benefit to consumers, farmers and the environment.

The Enviropig from the University of Guelph is a prime example of a GMO product that introduces environmental benefits while reducing farmers' production costs. I heard a radio broadast last week about the looming shortage of phosphates to make fertilizer, and that when that shortage hits, there will be tremendous negative consequences for crop yields all around the globe.

Schiffman cites a research review that found that GMO varieties on the market do no harm to people or the environment. That's quite a switch from the drumbeat of opinion about "frankenfoods".

And he writes that he would much prefer to serve his children Bt sweet corn than a crop that has been sprayed with organophosphates. Now isn't that some about-face?

The tide is turning.