The Smithfield Agreement
The exponential growth of hogs in North Carolina raised environmental concerns regarding animal waste. In 1999, Hurricane Floyd flooded hog waste pools, called lagoons and contaminated the water supply. In 2000, the Attorney General of North Carolina entered into agreements with Smithfield Foods and its subsidiaries, and Premium Standard Farms (PSF), under which both companies agreed to fund a project that would develop superior waste techniques for use on North Carolina hog farms.1 In 2002, Frontline Farmers, an independent group of contract farmers in North Carolina, although not part of funding the research, has agreed to cooperate with any of the new implementations. A total of $17.1 million is earmarked for the environmentally sustainable technologies (EST) identification and development initiative.2
The website of the Waste Management Program at North Carolina State University explains why the hog production system is a big public policy issue: "The vast majority of North Carolina's hog farms use the lagoon and spray field system to manage waste from animals. Pigs are raised in houses with slatted floors. Manure drops through the slats to a pit beneath the house. Periodically, the manure is flushed from houses to a lagoon, a large earthen basin, where microbes decompose the waste.
"Most lagoons are lake-like, so they tend over time to fill with liquid whenever there is an excess amount of rain. In order to keep the liquid in the lagoon at a manageable level, farmers spray the liquid on nearby fields, known as spray-fields, thus using the waste to add nutrients to the crops. This economically feasible system was created to maximize efficiency on hog farms, and well-kept lagoons have proved to be very profitable.
"However, the lagoon-spray field system is not without its own flaws. If not managed properly, lagoons can be a source of strong odor. Lagoons can also flood in the event of hurricanes, spilling their contents into nearby surface waters, and contaminating the local water supply."3
Hog farming is an important part of North Carolina's economy, and companies located here wish to maintain their relations with the state. The signing of the agreement was lauded by environmental groups, including Environmental Defense, the Southern Environmental Law Center (SELC) and the NC Chapter of the Sierra Club.4
The Smithfield Agreement's results will certainly improve the state's environment, and because the technology implemented must be economically efficient, North Carolina will gain a competitive edge over other hog farmers in other states. In years to come, it may be seen that the Smithfield Agreement could be a key factor in the prolonged success of the industry in North Carolina.
Environmentally Superior Technologies (ESTs)
As per the agreement, 18 technology candidates are now in various stages of construction or operation and performance verification. One of these 18 is the ambient digester.5
The ambient digester project is located in Zebulon, North Carolina at Julian Barnham Farm. The ambient digester is an in-ground pond of solid and liquid swine waste covered with an impermeable cover. Methane gas is produced by biological processes of bacteria in the swine waste and is extracted from the digester and transferred to a generator where it is burned to produce electricity that will power operations on the farm. The heat produced from the combustion of methane is used to heat water for various on-site purposes, and nutrients from the digester effluent are used to fertilize tomato plants in on-site greenhouses.6
In 2003, Smithfield Foods invested $20 million in the Biomass Energy Sustainable Technology (BEST) Biofuel Project. A facility will be built in Utah to convert swine waste into biodiesel vehicle fuel - a cleaner and more efficient alternative to petroleum diesel. Using heated digesters, the process uses livestock manure to produce a 'biogas' rich in methane. Captured methane is then converted into biomethanol, which is then mixed and reacted with oils, animal fat or used cooking oil, to make 'biodiesel'. Biodiesel is a clean-burning fuel that can be blended with conventional petroleum diesel much like ethanol is commonly mixed with gasoline. The petroleum diesel / biodiesel mixture is called B20 (biodiesel forms 20% of the mixture).7
Another advantage of the fuel is that its relatively higher engine lubrication extends the life of a diesel engine. In October of 2004, President Bush signed a bill that introduces the first biodiesel (B20) tax incentive. Effective January 1, 2005, the excise tax will competitively price biodiesel at roughly the same price as petroleum diesel.8
The BEST Biofuel Project poses an excellent opportunity for Smithfield and PSF to expand into a profitable industry outside the meatpacking industry while minimally altering its general operations and corporate structure. All advances in technology are working to improve both governmental and public opinions of Smithfield and the hog production industry. Hopefully the advancements will be reason enough to lift the moratorium on hog farming in North Carolina, further increasing hog production and with it the production, use, and profitability of biodiesel.
Country of Origin Labelling (COOL)
The Country of Origin Labeling (COOL) provisions in the 2002 Farm Bill (hereinafter "Labeling Legislation") requires retail sellers of several food commodities to inform consumers of the country of origin of certain commodities. The implementation of such legislation is symptomatic of increased consumer awareness. "Consumers are becoming increasingly concerned with the quality, safety, and production attributes of their food."9
There has been considerable debate on COOL, largely around the issue of whether the benefits exceed the enormous costs of implementation. The USDA, for instance, estimated that it would cost as much as $582 million in its first year of implementation with producers bearing $235 million of that cost.10 Several studies have concluded that there is benefit to labeling11 although companies such as Smithfield argue that the law is misplaced. Smithfield Foods Chairman and CEO Joe Luter III claimed that COOL is "bad public policy," but expects that it will help the company rather than hurt it.
Why? "Because it will keep Canadian pigs out of the U.S.," he says. "When the law goes into effect, farmers will have to trace and certify origin of their pigs." Canadian pigs will have to be kept separate on the farm, at the packing plant and on the cutting floor, dramatically increasing costs. He says Smithfield will probably refuse to buy pigs of Canadian origin. "The law is ill-conceived, it's all politics, and it's going to hurt the very people it was designed to help," he adds.
As small local family farms have given way to more specialized, geographically concentrated pork production plants, the quality of life for the animal has rapidly decreased. Animal right's organizations have gone as far as referring to the treatment of hogs as inanimate objects saying, "With corporate factories replacing traditional hog farms, pigs raised for good are being treated more as inanimate tools of production than as living, feeling animals." In large factory farms, pregnant sows are kept in metal cages that do not even afford them the space to turn around while causing them great distress in just standing up or lying down. Once the sow is about to give birth she is transferred to a slightly larger metal cage to be with her young. However this larger cage is not conducive to mobility and its concrete floor no where nearly resembles the naturally soft hay nest farrowing sows will make for their young.
To combat this inhumane treatment more and more local hog farmers are adopting farming policies to increase the quality of life of their hogs. It is this humane treatment, larger cages, hog interaction, and outdoor living, that small farmers are toting as helping to increase the quality of life of their hogs and thus the quality of their hog meat. Highlighting this and the growing trend of factory pork production, one small farmer said, "We're not pork producers. We're hog farmers. We're marketing two things. We're marketing an opportunity for farmers, and we're marketing pork to consumers."
With some of the largest pork production factory farms in the United States, North Carolina has far to go to reach the levels of humane farming that are present in the mid-west. Local farmers could take note of the Missouri Farmer's Union. Created in 1999, the Union is made up of like-minded local farmers who adhere to strict guidelines concerning the treatment of their hogs, allowing them access to the outdoors and providing them with shelter, while making sure their execution is stress-free. It's possible that as a group local North Carolina farmers can help change the practices of corporate conglomerate by starting the precedent for human faming in the region. However, it will most likely have to be stronger public outcry and consumer demand for more humanely processed meat before large-scale institutional practices will change.
The $9 billion organic food market is growing at a rate of about twenty percent a year and expanding rapidly to all food sectors. Organic hog farming takes humane farming to the next level by monitoring the nutritional intake of growing and gestating hogs. In discussing organic farming, issues concerning the battle between small farms and large factories arise. One of the main aspects of organic farming is the banning of antibiotics, some of which have been proven to be carcinogenic, from the hogs' daily regimes. While this may seem simple in theory, in practice it is rather difficult, especially for large factories. One animal and consumer's rights watch dog highlights this, stating, "Factory farming would not be possible without the routine use of antibiotics and other drugs. Only with drugs can animals survive the overcrowding, stress, and severe deprivation." Thus smaller local farms are gaining back the edge on the corporate conglomerate by appealing to the needs and wants of the growing number of sophisticated food consumers.
Niman Ranck Pork Company is one of the country's leaders in organic pork production. A co-op of like-minded farmers, the hogs of Niman Ranches have to meet certain standards. Niman Ranch hogs, "have never been given antibiotics of any kind; have never been given artificial hormones or growth promotants; have never been fed meat or meat by-products of any kind; have been raised on pasture or deeply bedded pens, and according to the Animal Welfare Institute's Humane On-Farm Husbandry Criteria for Pigs; and meet our high pork and carcass quality standards." Niman Ranches are located in eight states coast to coast within the United States, one of which being North Carolina. However, there is only one farm in North Carolina that subscribes to the Niman Protocols, a sharp decrease from other pork production intensive states like Iowa or Missouri. To keep up with the ever changing pork market and distinguish themselves from the large pork corporations, more small local farms in North Carolina are going to have to adopt similar organic processes.
- "Agreement between the Attorney General of North Carolina and Smithfield Foods Inc.; Brown's of Carolina Inc.; Carrol's Foods Inc.; Murphy Farms Inc.; Carrol's Foods of Virginia Inc.; and Quarter M. Farms Inc.," July 25, 2000. Last accessed December 17, 2004. [http://www.cals.ncsu.edu/waste_mgt/smithfield_projects/agreement.pdf]
- C.M. Williams and Leonard S. Bull, "Overview of Innovation in Manure Processing Technologies - Efforts at North Carolina State University funded by the Attorney General Agreements with Smithfield Foods, Premium Standard Farms and Frontline Farmers" Last accessed August 16, 2007. [http://www.traill.uiuc.edu/uploads/sowm/papers/p183-189.pdf]
- "Development of Environmentally Superior Technologies for Swine Waste Management per Agreements between the Attorney General of North Carolina, Smithfield Foods, Premium Standard Farms and Frontline Farmers." Raleigh, NC: North Carolina State University, College of Agriculture and Life Sciences, Waste Management Programs. Last accessed August 16, 2007. [http://www.cals.ncsu.edu/waste_mgt/smithfield_projects/smithfieldsite.htm]
- Environmental Defense, "Environmentalists Applaud Action Requiring Smithfield Foods To Eliminate NC Hog Lagoons". Press Release, July 25, 2000. Last accessed August 16, 2007. [http://www.environmentaldefense.org/pressrelease.cfm?ContentID=1207]
- "Development of Environmentally…" (fn. 3)
- "Ambient Temperature Anaerobic Digester and Greenhouse for Swine Waste Treatment and Bioresource Recovery at Barham Farm", Raleigh, NC: North Carolina State University, College of Agriculture and Life Sciences, Waste Management Programs. Last accessed August 16, 2007. [http://www.cals.ncsu.edu/waste_mgt/smithfield_projects/ambient%20digester/ambientdigester.htm]
- Smithfield Foods, "Smithfield Foods to Build Waste-to-Energy Facility". Press release, February 21, 2003. Last accessed August 16, 2007.
- South Carolina Department of Agriculture, "Biodiesel Tax Incentive Fuels Economy - Takes effect January 1, 2005". Press Release, October 27, 2004. Last accessed December 18, 2004. [http://www.scda.state.sc.us/pressreleases/archives/2004pressreleases/october/biodiesel.htm]
- J. A. Caswell, "How Labeling of Safety and Process Attributes Affects Markets for Food." Agricultural and Resource Economics Review. No. 27, October 1998. pp. 151-158.
- John Van Sickle, "Country of Origin Labelling: A COOL Update". Policy Brief Series, University of Florida, International Agricultural Trade and Policy Center, December 2003. Last accessed December 17, 2004.
- Wendy Umberger et al, "Country of Origin Labeling of Beef Products: U.S. Consumers' Perceptions." Conference Paper, presented at 2003 FAMPS Conference: "Emerging Roles for Food Labels: Inform, Protect, Persuade." Washington, DC, March 20-21, 2003; Van Sickle (fn 10).