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April 15, 2015

4 minutes read

Globalization and Factory Farming

Want to know one of the greatest barriers to promoting better animal welfare and greater sustainability in farming? The fact that many federal and state laws function to make the worst kind of farming the most profitable. Eliminating governmental policies and subsidies that favor factory farming and redirecting resources to support best farming practices is an urgent agenda.

A recent report from the Global Development and Environment Institute (GDAE) at Tufts University gives us a clear example of just how much current policies favor the worst kinds of animal agriculture. The GDAE report, Hogging the Gains from Trade: The Real Winners from U.S. Trade and Agriculture Policies,1 details how government policies skew to increase the profits of multinational livestock firms at the expense of environmental and labor concerns. For example, the report argues that the North American Free Trade Agreement (NAFTA) and U.S. farm subsidies created a flow of goods and services between Mexico and the United States that heavily favored agribusiness firms such as Smithfield and dramatically altered the entire pork industry.2

Just how much did these farm subsidies end up benefiting industry? According to figures from a 2007 GDAE working paper on factory swine operations, farm subsidies pushed corn and soybean prices below the cost of production and allowed agribusiness to purchase feed at incredibly low rates.3 Hogging the Gains from Trade notes, “This ‘implicit subsidy’ to animal feed gave industrial hog farmers a 26 percent break on their feed costs, which represented a 15 percent reduction in the firms’ [Smithfield’s] operating costs.4 We estimated savings to the industry from below-cost feed at $8.5 billion over that nine-year period. Smithfield controlled roughly 30 percent of the hog market during that time, so its savings were about $2.5 billion.”5

$2.5 billion flowed from taxpayers pockets to a company infamous for poor animal welfare, pollution, and unfair labor practices. This is not the only example of Smithfield benefiting from governmental policies. In Eating Animals, Farm Forward board member Jonathan Safran Foer notes:

The year before Smithfield built the world’s largest slaughter-and-processing plant in Bladen County, the North Carolina state legislature actually revoked the power of counties to regulate hog factory farms. Convenient for Smithfield. Perhaps not coincidentally, the former state senator who cosponsored this well-timed deregulation of hog factories, Wendell Murphy, now sits on Smithfield’s board and himself was formerly chairman of the board and chief executive officer of Murphy Family Farms, a factory hog operation that Smithfield bought in 2000.

A few years after this deregulation in 1995, Smithfield spilled more than 20 million gallons of lagoon waste into the New River in North Carolina. . . . The spill released enough liquid manure to fill 250 Olympic-sized swimming pools. In 1997, as reported by the Sierra Club in their damning “Rapsheet on Animal Factories,” Smithfield was penalized for a mind-blowing 7,000 violations of the Clean Water Act—that’s about twenty violations a day. The US government accused the company of dumping illegal levels of waste into the Pagan River, a tributary of the Chesapeake Bay, and then falsifying and destroying records to cover up its activities. . . . Smithfield was fined $12.6 million, which at first sounds like a victory against the factory farm. At the time, $12.6 million was the largest civil-penalty pollution fine in US history, but this is a pathetically small amount to a company that now grosses $12.6 million every ten hours. Smithfield’s former CEO Joseph Luter III received $12.6 million in stock options in 2001.

Unfortunately, the Smithfield U.S.-Mexico case is just one example of multi-national factory farms reaping wild gains while creating a less sustainable, less humane, and less just food system. In his second annual report, UN Special Rapporteur on the Right to Food, Olivier De Schutter, noted the dominance of multi-nationals in agricultural market share and condemned the negative effects this has on food security and the right to food. His suggestions for systematic reform include the promotion of fair trade, implementing grievance mechanisms, adapting compliance standards to be more affordable, and supporting for farmers cooperatives through favorable laws, tax incentives, and capacity building programs.6

Until such support networks are in place or, at the very least, de facto subsidies to factory farms are eliminated, small farmers like Frank Reese need the help that Farm Forward and other nonprofits provide. Join us as we work to create a post-factory farm system that, in the finest spirit of American competition, let’s the best farm win.

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