U.S. Lawmakers Scrutinize China's Bid To Buy Agrichemical Giant Syngenta

Jun 7, 2016
Originally published on June 8, 2016 2:35 am

Glenn Brunkow is a fifth-generation corn and soybean farmer. He and his dad run a small farm about 30 miles from Topeka, Kan.

For more than a decade they've been using seeds and chemicals from Syngenta. The Swiss company is a leader in pesticides and genetically modified seeds.

Recently, Brunkow got a call from his seed dealer to tell him a Chinese state-owned company called China National Chemical Corp., or ChemChina, has made a $43 billion bid to buy Syngenta.

"It was a little disconcerting to hear it the first time," Brunkow says. "Just the idea of a foreign-owned company, especially a Chinese-owned company, coming in." But his seed dealer has urged him not to worry.

The sale is part of a push by China to secure food supply for its population of 1.4 billion people, says Thilo Hanemann, an economist with the Rhodium Group, a research organization. China's agricultural productivity is low, and much of its scarce arable land is heavily polluted. Hanemann says China has not been very successful in nurturing its own genetically modified seed technology, so buying Syngenta will help.

"It's about tapping into the institutional expertise that lies within a company like Syngenta," he says.

The sale, however, is being held up while the U.S. government scrutinizes whether it is a threat to national security. See, although Syngenta is a Swiss company, it does more than a quarter of its business in the U.S. And a sale of this size and involving American agriculture has prompted a review by the Treasury Department's Committee for Foreign Investment in the United States.

"China is doing whatever it can to advance its interests legally and illegally," says Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, which monitors China for Congress.

That's why, he says, CFIUS is bringing in the Department of Agriculture to study the impact of this takeover on U.S. food security, and the Department of Defense is investigating whether any of Syngenta's facilities in the U.S. are close to military bases.

Plus, Syngenta owns a number of agrichemical facilities in the U.S., Wessel notes, and some of them make chemicals that are on the Department of Homeland Security's list of hazardous substances.

Syngenta's chief operating officer, Davor Pisk, says his company and ChemChina have voluntarily handed over pertinent information for these reviews.

For his part, Glenn Brunkow — the Kansas farmer — says he has read and thought about the Syngenta deal a lot. He says he's less apprehensive now that a full review is being done.

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Farms across the U.S. depend on seeds and pesticides made by a certain Swiss agricultural giant. Now China wants to buy the company. The U.S. government has held up the $43 billion deal to see if it presents a national security risk. NPR's Jackie Northam reports.

JACKIE NORTHAM, BYLINE: Glenn Brunkow is a fifth-generation corn and soybean farmer. He and his dad run a small farm about 30 miles from Topeka, Kan. Brunkow was a happy man when I caught up with him recently by phone.

GLENN BRUNKOW: It is beautiful here today. It's 80 degrees and sunny and light winds.

NORTHAM: Brunkow says for more than a decade they've been using seeds and chemicals from Syngenta. The Swiss company is a leader in pesticides and genetically modified seeds. A while back, Brunkow got a call from a seed seed dealer to tell him a Chinese state-owned company called China National Chemical Corporation or ChemChina is buying Syngenta. Brunkow says his seed dealer urged him not to worry.

BRUNKOW: Yeah, it was a little disconcerting to hear it the first time - just the idea of a foreign owned company, especially a Chinese owned company, coming in and purchasing, you know, that company that we rely so much on.

NORTHAM: The sale is part of a push by China to secure food supply for its 1.4 billion population, says Thilo Hanemann with the Rhodium Group, an economic research organization. Chinese agricultural productivity is low, and the scarce, arable land is often heavily polluted. Hanemann says China has not been very successful in nurturing its own genetically modified seed technology. Buying Syngenta will help.

THILO HANEMANN: It's about tapping the institutional expertise that lies within a company like Syngenta both in terms of R-and-D but also, perhaps more importantly, experts that are working there that have decades of experience in those fields.

NORTHAM: Syngenta may be a Swiss company, but it does more than a quarter of its business here in the U.S. A sale of this size and involving American agriculture has prompted a review by The Committee for Foreign Investment in the U.S., better known as CFIUS. It reviews whether such deals are a national security threat.

MICHAEL WESSEL: China is doing whatever it can to advance its interests legally and illegally, and it requires increased scrutiny of their operations.

NORTHAM: Michael Wessel is a member of the U.S.-China Economic and Security Review Commission which monitors China for Congress. He says CFIUS will bring in the Department of Agriculture to study the implications for U.S. food security, and the Department of Defense will see if any of Syngenta's facilities in the U.S. are close to military bases.

WESSEL: It owns a number of agrichemical facilities here, some of them which make hazardous chemicals that are on the Department of Homeland Security's list of those that they should be concerned about in terms of, you know, state or nonstate actors who may engage in terrorist activities.

NORTHAM: Syngenta's chief operating officer, Davor Pisk, says it and ChemChina have voluntarily handed over pertinent information for the CFIUS review and that its operations will not change after it's sold.

DAVOR PISK: We are engaged in breeding activities for our seeds for production for the marketing and selling of those products. None of those we believe lead to national security consideration.

NORTHAM: For his part, Glenn Brunkow, the Kansas farmer, says he's read and thought about the Syngenta deal a lot. He says he's less apprehensive now that a full review is being done. Jackie Northam, NPR News. Transcript provided by NPR, Copyright NPR.