USDA terminates Chinese-owned Smithfield’s farm aid contract

By Reuters - Global Times Source:Reuters-Global Times Published: 2018/11/18 20:38:40

The US Department of Agriculture (USDA) terminated a purchase contract worth $240,000 with Chinese-owned Smithfield Foods that had been awarded under the Trump administration's agricultural trade bailout program, a move taken at the company's request, a department spokesman said on Friday.

The move comes weeks after US Republican Senator Chuck Grassley of Iowa, one of the country's biggest farm states and the biggest hog-producing state, slammed Smithfield for receiving what he said was aid from the USDA that was meant to help American farmers hurt by China's trade tariffs.

"Smithfield requested to terminate their contract awarded under the Food Purchase and Distribution Program. The USDA has agreed to the termination," said Tim Murtaugh, a spokesman for the USDA.

Murtaugh said the transfer of funds for the food purchase contract had not yet taken place, and that Smithfield's request to cancel the contract was received on November 13.

Smithfield, owned by Chinese conglomerate WH Group, was not immediately available for comment. The company is the world's largest pork processor and hog producer with $15 billion annual revenues, according to its website.

US President Donald Trump in late May announced tariffs on steel and aluminum imports, prompting retaliation from top trading partners like China that has since spilled into agriculture markets.

To help offset damage to US farmers, a key constituency for Trump, the USDA rolled out a $12 billion aid package that included $1.2 billion in commodity purchases. The program allocated about $558 million to pork purchases.

Grassley complained in October about Smithfield's approval for what he said was federal aid.



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