Republican South Dakota Gov. Kristi Noem signed legislation earlier this month banning companies based in six adversarial countries, including China, from owning or leasing agricultural land that contains a carveout for a major Chinese-owned employer in her state.
The law included a provision that allows Smithfield Foods to continue leasing land in South Dakota, despite its Chinese ownership. Smithfield Foods is a subsidiary of the Hong Kong-based WH Group Limited, a corporation led by members of the Chinese Communist Party (CCP), the DCNF previously reported, and is one of the largest employers in South Dakota.
The legislation was “narrowly tailored to exempt Smithfield” due to the company’s economic importance to South Dakotan farmers, Republican State Rep. James Wangsness, a main sponsor of the law, told the DCNF.
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“While this was not our favored position, it was necessary to avoid adverse financial hardship on local producers that contract with Smithfield,” he continued. “This exemption clearly highlights the problem posed by foreign ownership.”
Noem told the DCNF in January that former Smithfield CEO Kenneth Sullivan, “was getting his instructions from China” and that “he didn’t care enough about the lives of South Dakotans to work with me to see how we could best serve them.” (RELATED: Here’s How Much US Farmland Has Been Bought Up By China)
“In South Dakota, we have the added pressure of having Ellsworth Airforce Base in our state,” she continued. “We cannot allow China to buy up ag land surrounding this critical piece of national security.”
Smithfield leases hog production from South Dakota farms, according to local media.
The new South Dakota law bans companies based in China, Russia, Cuba, Iran, North Korea and Venezuela from buying or leasing agricultural land in the state. But the law allows prohibited entities to lease agricultural land when it is “exclusively for contract feeding of livestock, at an animal feeding operation, by a family farm unit, a family farm corporation, or an authorized farm corporation.”
WH Group, through Smithfield Foods, controls more than 100,000 acres of land across several different states, according to the U.S. Department of Agriculture.
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The governor’s office referred the DCNF to congressional testimony given by Noem on Wednesday that touched on the dangers of Chinese farmland ownership, but did not mention the Smithfield exemption.
“This is Governor Noem’s 30th year working on [agricultural] policy,” a spokesperson for Noem said in a subsequent statement. “While she has serious issues with Smithfield, she’s proud to take the lead and be the first state in the nation to ban six evil foreign governments who hate America from purchasing our farmland.”
The DCNF previously identified four executives and the chairman of Smithfield’s parent company as members of the CCP.
WH Group Chairman Wan Long, for instance, is a veteran of China’s People’s Liberation Army (PLA) who has held several positions in the Chinese government and is identified in business filings as a member of the CCP.
Ma Xiangjie, one of the corporation’s executives, served as a delegate for China’s National People’s Congress (NPC), which is “the highest organ of State power in China,” according to its website. The NPC operates under the leadership of the CCP, according to the Congressional-Executive Commission on China.
Smithfield, previously an American-owned company, was acquired by WH Group in 2013 for $7.1 billion, with the Obama administration approving the sale.
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Smithfield has exported hundreds of thousands of pounds of pork to China since WH Group acquired it in 2013. Some of that meat made its way to Shuanghui Investment and Development Co., a Chinese company that operates a food stockpile center for the PLA in order to help the Chinese military prepare for emergencies.
Leon Panetta, the former director of the CIA, raised concerns that Chinese firms may use their presence on U.S. soil to engage in espionage during congressional testimony in January.
“They’ll establish a manufacturing unit, they’ll establish whatever they can, and then they will use that for their own intelligence purposes,” he said when asked about the CCP-linked battery manufacturer Gotion building factories in Michigan.
Smithfield Foods did not immediately respond to the DCNF’s request for comment.
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