Examining Chinese Threats to Ag

WASHINGTON (DTN) -- While China remains among the biggest buyers of U.S. agricultural exports, China is increasingly an existential threat to American farmers, witnesses told the House Agriculture Committee on Wednesday.

The House Agriculture Committee delved into some of the risks of China attempting to expand its agricultural footprint in the U.S., while looking to steal intellectual property. Lawmakers highlighted the need to further restrict agricultural land purchases as well as agribusinesses. A key mantra of the day was that food security is national security.

Rep. Glenn "GT" Thompson, R-Pa., said China imports as much food globally as the U.S. exports. The high volume of imports, including from the U.S., "makes this conversation more difficult." He added, "So, how do we strike the balance of protecting our producers and consumers, and every piece of the agricultural value chain, while keeping pace with China's needs? How do we reduce our reliance on one country without undermining the necessity of a strong export market? How do we think smartly about policies that mitigate threats while protecting our best assets?

Rep. David Scott, D-Ga., ranking member of the committee, cautioned against "fearmongering and alarmism," saying rhetoric over China is leading to more discrimination against Asian Americans.

"This is about agricultural policy, not people policy. I also want us to keep in mind China is an important trading partner to the United States," Scott said.

South Dakota Gov. Kristi Noem, a Republican, told House members that she has watched China "systematically take over" food processing. Noem called for increasing efforts to restrict the ability of China and other foreign adversaries to buy U.S. agricultural land.

"Now they are coming for our land. And when they buy up our land, they will complete their chain of control over our food supply," Noem said. She added, "This should be alarming to all of us."

Noem told lawmakers that a group of Chinese visitors claiming to be businesspeople came to South Dakota last summer. After declining to meet with them, Noem said she learned from State Department officials that they were actually Chinese spies.

"The Chinese Communist Party is not our friend, not our partners and not our allies," Noem said.

Noem only briefly mentioned Smithfield Foods, which employs about 3,300 people in Sioux Falls, South Dakota. "They have been difficult for me to work with," she said.

The Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, after meeting for nearly a year, released a wide-ranging list of recommendations in December, calling for a "reset" in the U.S.-China relationship. The committee report had more than 150 recommendations, which included repealing China's Permanent Normal Trade Relations (PNTR) status.

Rep. Mike Gallagher, R-Wis., chaired the select committee. He and Rep. Raja Krishnamoorthi, D-Ill., the committee ranking member, each talked about Chinese intellectual theft such as spies who were caught stealing Iowa corn seed to ship back to China. The lawmakers said such intellectual theft amounts to tens of millions of lost dollars for U.S. companies.

US SALES TO CHINA

China bought $29 billion in U.S. agricultural goods in 2023, after buying a record $38.1 billion in 2022. Sales to China continue to fall. In January, sales to China were $3.1 billion, down 31% from a year earlier.

For the grain marketing year that began Sept. 1, corn exports to China are down 57% compared to the same point last year. Soybean sales -- the largest commodity shipped to China -- are down 25% from a year ago. For the wheat marketing year, which began last June, all-wheat shipments to China are up 14.5%, but China also has canceled two large buys in the last month, according to USDA's Foreign Agricultural Service.

Since the start of 2024, pork shipments are down slightly, as are outstanding sales. Shipments of beef are also down slightly, but outstanding sales are lagging behind 2023.

THE INFLUENCE OF SOYBEANS

Josh Gackle, president of the American Soybean Association and a farmer from North Dakota, told lawmakers about the importance of the Chinese market and the impacts of the trade war in 2018 and 2019. He called on lawmakers to reject attempts to revoke China's trade status.

Rep. Dusty Johnson, R-S.D., asked about how to develop more market access. He noted a high percentage of soybeans raised in South Dakota are eventually exported to China.

"It is really hard to overstate the role of soybeans in this relationship between China and the United States," Johnson said.

Johnson suggested that helping develop markets in other countries would improve "American soft power.

Gackle noted soybean groups are involved in 112 different countries and trying to expand exports in areas ranging from South Asia to North Africa.

"There are opportunities in different places, and that is long term. It takes a long time to develop that market," Gackle said.

Indiana farmer Kip Tom, who served as the ambassador to the United Nations Agencies for Food and Agriculture under the Trump administration, added that as the U.S. loses market share in China to Brazil, the U.S. needs to draw more import commitments from Africa.

"We put more money into Africa than China, and we don't ask anything in return," Tom said.

REGULATORY CHALLENGES AND CHINA

Tom also pointed out that another risk to U.S. farmers is the reliance on China for crop protection products.

"This is a national security threat to the United States and our allies," Tom said.

A major part of the problem, Tom said, is that the regulations to develop more manufacturing capacity for crop protection tools is too stringent in the U.S., so a lot of it is now done offshore.

Asked why crop protection products are being made in China, Tom said, "I would say because of the extensive regulatory burden we have here in the United States."

Tom also talked about the risk of intellectual property theft and the need to take concrete steps to production agricultural technology. He also stressed that the U.S. must increase its public-sector research investments in agriculture.

"We need to make sure we shore up research and development. If not, we're going to suffer the economic consequences and food security around the world," Tom said.

Along with addressing regulatory challenges, Tom said the U.S. needs to develop more markets such as sustainable aviation fuels to add more domestic value to products rather than exporting raw commodities.

"What can we do here in the United States to provide more value for the crops that we produce?" Tom asked. "At the end of the day, we need these products -- we need these opportunities -- to add value to our products."

TYING THE DEBATE TO PROP 12

Rep. Jim McGovern, D-Mass., brought up Smithfield Foods, noting the company "now controls about one-fourth of all U.S. pork production and is the largest exporter of pork to China." Yet, despite the "talk tough" on China, McGovern said members of the committee "are carrying the water on China" because they want to override California's Proposition 12 and Massachusetts' Question 3, both of which restrict pork production in other states.

McGovern said efforts to overturn those state laws come "at the insistence of this Chinese-owned company."

Thompson, as the hearing was ending, disputed that Smithfield was tied to efforts to pass language in the farm bill overturning Prop. 12.

"No one has made any sort of coherent argument explaining about (how) one state dictating to another how to farm helps out China." In this case, Thompson called China, "a convenient straw man." He added, "China didn't ask for the help. Farmers asked for the help."

The full hearing can be viewed at https://agriculture.house.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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