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The Meat Mob Muscles In
By: Merritt Clifton
From ANIMAL PEOPLE June 1997 edition
Reprinted by Permission - 24 April 2003
Merchants of Death
But neither charity nor revamping existing meat infrastructure are among the primary foreign goals of U.S. agribusiness. What U.S. agribusiness wants is to clone itself abroad, especially in Asia. Explains Dennis Avery, director of global food issues for the Hudson Institute:
"Asia is now in the first stages of the biggest surge in farm export demand the world will ever see. It is also the last big surge in farm export demand the world will ever see. Asia is the land of opportunity, and it's happening fast. China's meat demand is rising by four million tons per year--but it has a feed shortage. India is trying to consume an additional two million tons of milk per year--but it has a feed shortage. Indonesia's broiler flock soared 25% last year to 750 million birds--but it has a feed shortage."
Avery argues that the U.S. grain export sector must bear the brunt of the need to increase global grain production 300% within the next 50 years, and that this is a positive, since it brings immense opportunity for profit. The alternative, he contends, is that much wildlife habitat abroad will be destroyed to faciliate additional grain cropping.
Avery's calculations may stand up, if, for instance, Russians start eating the 70 pounds of chicken apiece per year that Americans consume on average, instead of their present average of 15 pounds apiece. The catch is that the necessary water and topsoil may not be available.
Scrambling for position, agribusiness seems inclined to win market share now and figure out how to fill it later. Exporting $700 million worth of chicken per year, accounting for 12% of the company gross, Tyson grabbed the lead on May 1, 1997, announcing a deal with Kerry Holdings Ltd., part of the Hong Kong-based Kuok Group, to build up to 10 poultry complexes in China, each of which is to kill half a million birds per week. Construction of the first complex is to begin by February 1998.
Tyson is already selling breeding chickens abroad through a subsidiary, Cobb-Vantress Inc., which has distributors in 14 nations. Cobb-Vantress chickens have an edge in the marketplace, achieved through selective breeding, in that they gain one pound of body weight per 1.8 pounds of feed input, compared to the former industry standard of one pound gained per 2.1 pounds of feed input.
Earlier in 1997, Tyson announced it would invest $25 million in building a feed-and-hog complex at Luzon, the Philippines, and together with Hudson Foods and Simmons Foods announced a joint deal, partially financed by the USDA, to build a U.S.-style poultry facility in Russia.
Since the Soviet Union disintegrated in 1991, Russian poultry inventories have dropped 45% and annual production is down 55%, but U.S. poultry exports to Russia climbed 26% in 1996, to 853,000 metric tons, worth $826 million, of which the Tyson share is $170 million. Hudson Foods is the next biggest poultry exporter to Russia, selling $132 million worth last year. But the export boom, at least in chicken as opposed to grain, is not going to last. The real rush is to establish production capacity within the purchasing nations. Further, since Russia has considerable unrealized grain production capacity, unlike the other purchasing nations, industry analysts see potential huge profits not only in developing the Russian poultry industry, but also in using Russian grain to produce poultry for export to Asia.
The major obstacles to global conquest by the American meat trade seem to be health and safety standards, often stricter abroad than in the U.S., but negotiated down when U.S. economic clout is brought to bear. The U.S. position, encouraged by agribusiness, is that the stricter foreign standards are not really necessary, not enforced against domestic producers, and are deployed only as defacto protective tariffs by foreign governments, on behalf of inefficient domestic producers. The U.S. won agreement from a World Trade Organization tribunal on May 12, when the three judges unanimously ruled that the European Union ban on the import of beef grown with the use of synthetic steroids is a defacto tariff, not soundly based on science.
Because the provisions of the General Agreement on Trade and Tariffs bar nations from using "process standards" that govern how an item shall be made to restrict imports, health and safety standards remain almost the only way for GATT member nations to slow displacement of peasant farmers by "vertically integrated" agri-business-- and at that, the U.S. can and does retaliate, with the advantage of leverage because every other trading nation wants the chance to export goods into the U.S. marketplace.
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