Why Is China Treating North Carolina Like the Developing World?

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How lax regulation made it cheaper for China to outsource pork production – and all of its environmental and human costs – to the U.S.

 

 

In July 2013, Larry Pope, the CEO of Smithfield Foods, the largest pork producer in America, was called to testify before a U.S. Senate committee about the pending sale of his company to a Chinese conglomerate now known as WH Group. The $7.1 billion purchase, the largest-ever foreign takeover of its kind, had attracted concerns. The Chinese pork manufacturer had a checkered health record, allegedly feeding its hogs illegal chemicals, and Smithfield had a long history of environmental problems at its farms, including a $12 million fine for several thousand clean-water violations. But the worries did not stop there. The Chinese government had a track record of using nominally private entities as proxies for state power. “To have a Chinese food company controlling a major U.S. meat supplier, without shareholder accountability, is a bit concerning,” said Republican Sen. Chuck Grassley. “A safe and sustainable food supply is critical to national security. How might this deal impact our national security?”

 

In a measured Southern drawl, Pope explained that the deal was a win for everyone. Pork markets were declining in America, while China had become the largest pork consumer in the world. The takeover would create jobs in rural America by opening a vast market. When senators pressed Pope about whether the takeover was being directed by the Chinese government, the executive laughed it off. He promised both companies would respect the health of the communities and the environment surrounding hog farms. A few months later, the deal was approved.

Questions soon emerged about the transaction. China’s national economy is directed by Five-Year Plans, economic blueprints handed down by the government that private companies are expected to follow. In 2011, as the nation’s billion-plus citizens continued to forge a stable middle class of pork consumers, the government issued a plan directing Chinese companies to buy foreign food producers and farmland. In two years, Chinese nationals went from owning $81 million worth of American farmland to nearly $1.4 billion, including the Smithfield purchase.

 

Despite Pope’s denials of Chinese-government involvement, the nation’s central bank had approved a $4 billion cash loan to fund the acquisition, a transaction its 2013 annual report described as a “social responsibility.” The investigative news organization Reveal uncovered documents showing that WH Group receives guidance from the government, which a company executive explained was because “pork is considered a national-security issue in China.” When a reporter from Reveal confronted Pope with the financial documents showing the Chinese government’s support for the deal, the first thing he said was “Wow.” (Keira Lombardo, Smithfield’s senior vice president of public affairs, contested the characterization that the Chinese government directed the purchase.)

 

Today, Smithfield sends more than a quarter of its pork abroad, especially to China, which received nearly 300,000 tons in 2016. Part of what made the company such an attractive target is that it’s about 50 percent cheaper to raise hogs in North Carolina than in China. This is due to less-expensive pig-feed prices and larger farms, but it’s also because of loose business and environmental regulations, especially in red states, which have made the U.S. an increasingly attractive place for foreign companies to offshore costly and harmful business practices.

 

America’s top hog-producing county is Duplin County, North Carolina, where future hams outnumber humans about 30 to 1. In this rural expanse of sandy fields and loblolly pines, about 2 million pigs are warehoused in hundreds of football-field-size metal barns – about 2,450 pigs per square mile. All those pigs produce a tremendous amount of waste. A mature hog, whose only activity is to eat, excretes about 14 pounds of manure a day, which means Duplin’s hogs generate about 15,700 tons of waste daily – twice as much poop as the human population of the city of New York, according to Food and Water Watch.

Behind each barn, millions of gallons of liquid hog waste are kept in colossal open-air lagoons – essentially pits dug into the clay, many without a concrete or plastic liner. To prevent overflowing, farms spray it out as fertilizer on crops, which can create a mist that drifts onto nearby homes and into their inhabitants’ lungs, causing all manner of respiratory and health problems. The waste can also leak through the clay pits into the water table, or flood the whole region, as happened in 1996 and 1998 when hurricanes inundated the area. Eastern North Carolina is packed with more than 9 million pigs; the state’s top five hog-producing counties alone produce 15.5 million tons of manure annually. An analysis by the Environmental Working Group found that 160,000 people living in the region may be harmed by pig waste. And those victims are disproportionately minorities, according to studies conducted by the University of North Carolina-Chapel Hill. As Naeema Muhammad, co-director of the North Carolina Environmental Justice Network, says, “What’s happening in eastern North Carolina is that poor people are literally getting shit on.”

 

 

Globalization has allowed rich countries like America to outsource polluting industrial processes to poorer nations. But as China becomes increasingly wealthy and assertive, says Democratic Sen. Cory Booker, “it is outsourcing a dirty industry to the United States so they don’t have to bear its pollution and they can just send the finished product back home.” More than just America’s environment and human health is at stake. “Low-paying jobs, like hog slaughtering and breeding, will remain in places like Duplin County, but the higher-paid executive and marketing jobs will be lost,” says Usha Haley, a professor at West Virginia University who has studied the Chinese takeover of American agricultural assets for a decade. “China will not care about the health of people living beside the hog farms. China will act in its own self-interest to leave the pollution here, but take the valuable clean pork back to China.”

 

As jobs and talent have flocked to American cities, once-prosperous rural communities are finding their primary competitive advantages are desperate residents willing to work cheap, and local Republicans ready to extend tax breaks and slash regulation. American companies have long taken advantage of these trends. A leaked report from the 1980s, which was prepared for a waste-management company seeking a community for “locally undesirable land use,” listed the “least resistant personality profile” as: “longtime residents of small towns in the South or Midwest,” “conservative,” “Republican” and “advocates of the free market.”

 

In recent years, foreign conglomerates have seized upon this workforce as well. In 2011, the last time the United States Department of Agriculture released figures, overseas entities owned agricultural acreage roughly the size of Virginia, holdings that have only continued to grow. Investors from Saudi Arabia and the United Arab Emirates have since purchased 15,000 acres of the parched Southwest to grow water-intensive crops, such as alfalfa hay for their dairy herds back home. In the case of Smithfield Foods, WH Group inherited a practice in which local farmers are encouraged to build facilities on credit for raising pigs set for slaughter. As a result, the company now owns the hogs, the most lucrative part of the business, while the North Carolina farmers own the shit – and all the environmental and human liabilities from it. As Jason Gray, a senior researcher at the economic-policy organization NC Rural Center explains, “The dilemma rural economies face is that you’ll reach for anything if you have nothing.”

 

“We can only stay a few minutes,” René Miller says, as we park at her family graveyard. Miller grew up on a neighboring farm about half a mile away, on land that had belonged to her family since the Civil War. But when her mother went to get loans to modernize their farm, Miller says, she was turned down by banks and the USDA. Such stories of discrimination are common among African-American farmers in North Carolina. The family that owned the land where Miller’s kin now lie took out a loan from someone advertising on TV as “Mr. Cash.” After the property went into foreclosure, the acres the family owned for more than a century were bought by a white farmer. In 1999, the USDA settled a billion-dollar class-action lawsuit initiated by a North Carolina farmer, admitting African-Americans had been denied loans because of their race. Now, Miller is only allowed on the property to visit her dead.

 

Opening the van door, the stench – animal and fecal – wets the air like humidity. The source is a few hundred feet away: six airplane-hangar-like metal barns, warehousing around 4,300 hogs, backed by three acres of liquid pig waste in an open-air lagoon. Miller brushes fallen pine needles off the headstones of her grandmother and her mother, before reaching that of her nephew, who recently died of cancer. As she kneels next to the stone, she tells me, “I think it killed him.”

 

She means the hog waste. Specifically, the approximately 30 tons of manure the swine in the barns excrete daily through slatted floors into the lagoon, which is then pumped through an industrial sprayer to fertilize crops. These clouds of aerosolized feces, Miller says, drift over a country road and coat her home, where her nephew once lived. Both times I visited, the sprayers in the field across the road were off, but the reek was noticeable inside the house, despite the cardboard barriers Miller had improvised to seal her windows.

 

The industry describes hog waste as “organic fertilizer,” though in reality it is potentially lethal. To keep swine alive in overcrowded hothouses, where diseases spread rapidly, pigs are treated with antibiotics, vaccines and insecticides, all of which eventually pass into the lagoons, which have been found to contain toxic chemicals, nitrates, parasites, viruses and more than a hundred strands of antibiotic-resistant microbes, including salmonella, streptococci and giardia. People die with distressing regularity in the waste: In 2015, an Iowa teenager overcome by methane, ammonia and carbon dioxide fumes fell into the sludge. When his father tried to haul him out, they both drowned in excrement.

 

“What’s happening in eastern North Carolina is that poor people are literally getting shit on.”

 

In 2008, a Government Accountability Office survey found 15 studies that linked animal waste from industrial livestock farms with widespread health problems. Living near hog farms increases people’s risk for respiratory problems, diarrhea, eye irritation, depression, high blood pressure, miscarriages, and impaired thinking and breathing; Miller blames the pig waste for her asthma, sarcoidosis and heart ailments. Livestock farmers themselves have been found to be more likely to suffer from respiratory illnesses like chronic bronchitis and antibiotic-resistant staph infections.

 

Even people who live much farther away from hog farms can suffer from the fallout. A North Carolina Department of Health and Human Services study found that students in middle schools up to three miles away had higher rates of asthma. Just being able to smell the stink has been correlated with increased tension, anger, depression, fatigue and confusion. Leaks through the clay bottoms of lagoons can spread E. coli into groundwater and nearby wells. Hog waste has not been proved to correlate with cancer, but researchers at Duke University are currently conducting a wide-ranging study into possible links. Shane Rogers, a professor at Clarkson University and former Environmental Protection Agency engineer, has studied the issue extensively. “A wide body of research,” he says, “shows that living near pig farms can be hazardous to people’s health.”

 

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