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Smithfield faces opposition as it expands hog operations in Poland

(Monday, Feb. 2, 2004 -- CropChoice news) -- Glenn Frankel, Washington Post:

BYSZKOWO, Poland -- Marek Kryda frowns as he pulls up to the gate outside an anonymous complex of gray windowless warehouses and gleaming stainless steel tanks. "They don't even have a sign," he complains, as he sniffs the air. "But you can smell what's here."

What's here is one of Poland's largest pig-raising sites, owned by a subsidiary of Smithfield Foods Inc., the giant Virginia-based pork company. What it smells like is manure, with most of the odor coming from a steaming mountain of pig waste and straw located at the edge of the property in an empty, frost-covered field.

A few hundred yards away, a dirt road leads to the village of Psieglowly, population 80, and to two glistening lakes, their waters now hibernating under a thick sheet of ice.

Last spring when the ice melted, the manure -- with a payload of nitrogen, phosphorus, artificial hormones, antibiotics and other waste products -- seeped toward the village and the lakes. The water turned brown, children got eye infections and skin rashes, and the smell -- well, to call it overwhelming doesn't do it justice, according to local villagers.

Smithfield, which first came to Poland five years ago, is now seeking to expand its operations, securing a foothold in a country that is set on May 1 to join the European Union. Company officials, who see Poland as a launching pad for sales across Europe, contend they are helping the country compete in the modern world of globalized food and supermarket chains. As for the Byszkowo farm, they concede there have been environmental problems in the past but insist they are making improvements.

"We are obeying Polish law and safe farming practices," said Dennis Treacy, a Smithfield vice president.

But a small group of U.S.-based environmentalists who have dogged Smithfield's footsteps since it arrived here are stepping up their campaign as well. Kryda, who works for the Washington-based Animal Welfare Institute, has joined forces with farmers and town officials to try to block Smithfield and other Western agribusiness giants. They see the outsiders as intent on swallowing up Poland's extensive network of family farms and unconcerned over harm to the country's water and land resources.

"This struggle is about democracy," Kryda says as he leads a reporter on a tour of farms and villages in the country's remote northwest corner. "They want us to trade one Big Brother for another."

Land Purchases

In January the rural landscape of northwest Poland seems asleep, its rolling fields imprisoned under a thick crust of frost. The winding country roads that Kryda navigates are largely deserted. Unruly piles of twigs deposited by storks rest on the rooftops of farmhouses. "People never destroy them," he says. "They believe if you have a nest, lightning will never strike."

Kryda, 44, is a Buddhist and vegetarian who worked as a guide in a national park before heading to Los Angeles in the early 1990s. There he saw some of the underbelly of American life, working as a housecleaner and security guard, before returning home three years later. He held a variety of jobs in Poland before Tom Garrett of the Animal Welfare Institute recognized his organizational and lobbying talents and recruited him three years ago.

Kryda and his group have focused on Smithfield, which reported nearly $8 billion in sales for its 2003 fiscal year, because the company represents to them all that is wrong with U.S. big business. In their view, the company ravages the environment, destroys jobs and traditional society, and steamrolls opponents in the capital, Warsaw. "Smithfield doesn't play by the rules," he says. "They basically are saying, 'Don't mess with us, because we're too big.' "

But Kryda says the real battle is taking place in rural areas such as the northwest. Germany ruled this corner of Poland until 1945, when the Red Army rolled through and German residents fled. Because the land was vacant, the region became one of the few parts of Poland where large state-run farms were set up. The farms collapsed in the early 1990s, leaving thousands of workers unemployed. "They felt like they were on the junkyard of history," recalls Marzanna Sadowska, the local historian.

Three years ago, a new company called Prima Farms, which registration papers showed was owned by two Polish businessmen, bought out what was left of one of the state-run hog-producing companies and set up shop in a prefabricated building in Czaplinek, the main town in the area. Prima began quietly buying up area pig farms, modernizing the facilities and signing contracts with smaller farmers.

Over time, local officials said, they realized the extent of the company's land purchases, and that Prima's funding was coming exclusively from Smithfield, an arrangement that allowed the company to circumvent a government moratorium on the purchase of farmland by foreign firms.

Last summer it all hit home. A local restaurant and hotel owner called the town hall to complain that the smell from the Byszkowo farm several miles away had become so overwhelming that customers on her patio had abandoned their lunch. Bozena Michalak, village leader of Psieglowly, said seven villages in the area were affected. Her 5-year-old son came down with an eye infection after swimming in the lake behind her house. She said her plea to a regional official went unanswered. "He told me he's too small to do anything because there's too much money involved," she said.

Mieczyslaw Smyk, Czaplinek's environmental officer, said he and his assistant went to investigate on the evening of July 22. His report states he came across a ditch connecting two lakes where liquid manure had been dumped. Tractor tire tracks from the ditch led back to the farm. "The odor in this particular spot and the burned-out vegetation in the ditch seemingly was caused by the dumping of huge amounts of manure," the report says. Further investigation revealed Prima lacked permits for much of its operations.

Smyk is sitting in a meeting room at the town hall along with Genowefa Polak, chairwoman of the local council. They tell Kryda that the council has voted 14 to 1 against allowing Prima to open any more factory farms in the area.

"I believe this is a company that only wants to maximize profits and nothing else interests them," Polak says. "They do nothing until they are forced."

No one is optimistic they can get Prima to make changes. The company has subcontracted its waste disposal to a local farmer, and so technically he is responsible, not Prima.

But there is another factor, explains Zbigniew Bartosiak, the town's deputy mayor: Prima is too important to Czaplinek to risk a confrontation.

Since it opened its headquarters here, he says, the company has become the town's largest taxpayer, providing nearly $2 million in revenue over the past four years. It also provides employment in an area where the jobless rate is officially 20 percent and unofficially at least 40 percent.

"We're not in an easy position," Bartosiak acknowledges. "On the one hand it's a very important company. They could move anywhere in one day and pay all their taxes to somewhere else. On the other hand, we cannot forget about the people who live here."

Losing Ground

Adam Grozdziej turns on the lights inside the windowless barn and 300 rosy pink piglets come to life as if hit by a jolt of electricity. He pours feed into a metal bin as the squealing animals shove their way to the front. He smiles grimly; the current state of Polish farm economics means that each piglet could grow up to be a net loss.

Grozdziej's farm, which he operates with his business partner, Artur Raksimowicz, is Kryda's next stop this afternoon. The two men bought 460 acres of formerly state-owned land eight years ago and opened their own hog farm south of Czaplinek.

Things went all right for a while. Then Smithfield, through Prima, bought a nearby farm.

Grozdziej and his brother, Boleslaw, an activist, were the first to call attention to the new company and raise objections to its purchases and environmental methods. Adam cannot understand why Smithfield is expanding at a time when there are already too many pigs, leading to low pork prices, while the price of grain and other operational needs has risen. He contends that Smithfield is seeking to drive him and other small producers into bankruptcy.

"If there was a shortage of pigs I could understand making new investments," he says. "But when there's already overproduction, new producers mean disaster for us."

Grozdziej had hoped to sell his products locally and open a small guesthouse near the farm. Now he doubts it will ever happen. "If this continues, we won't be here in five years," he says.

As many as 25 percent of Poles are still classified as farmers, compared with 3 percent of Americans. Polish peasants survived Hitler, Stalin and 45 years of Soviet domination, feeding themselves and the nation. They pride themselves on their home-produced meats, vegetables, breads and jams.

Invoking those traditions, the Animal Welfare Institute and its allies at first enjoyed much success in the campaign against Smithfield. They persuaded Andrzej Lepper, a former pig farmer who heads the ultranationalist Samoobrona ("Self-Defense") Party, to denounce the company as a "cancer."

Last summer the Animal Welfare Institute helped sponsor a four-day tour by Robert F. Kennedy Jr., an environmentalist who has waged a protracted legal campaign against Smithfield in the United States. Kennedy, whose family name still resonates with many Poles, recounted Smithfield's history of environmental problems in the United States -- it was fined more than $12 million in 1997 for violations of the Clean Water Act in Virginia -- and exhorted Poles to defend their farms and countryside. A Smithfield subsidiary is suing Kennedy in Poland for spreading "untrue and debasing information" about the company.

But Kryda contends that the campaign against Smithfield is losing ground. Samoobrona last year voted with the government to kill activist-endorsed amendments to the national animal welfare act. Smithfield's supporters amended fertilizer regulations to reclassify liquid manure as an agricultural product rather than as waste.

"Basically, I've come to understand that with the government and the Parliament we cannot win," he says. "Smithfield gets what it wants."

That's not how it looks from the 31st floor of the gleaming steel-and-concrete building in central Warsaw where Animex, Smithfield's largest Polish subsidiary, has its offices. Morten Jensen, the company's Danish-born president, says Smithfield has had to learn many difficult lessons in Poland.

The company first arrived in 1999 after buying a majority share of Animex. Since then, officials say, the company has poured more than $240 million into its Polish operations and only last year reported its first profit, a token $1 million. "There has not been a day without surprises," Jensen says.

As Jensen tells it, Smithfield's problems are not dissimilar to Adam Grozdziej's: too many pigs chasing too few Polish zlotys. Just like Poland's coal, steel and shipbuilding industries -- all of them undergoing major restructuring and contraction -- farming employs too many people and makes too little money. Smithfield had to shut down three of Animex's large slaughterhouses and lay off nearly 2,000 workers, although officials argue they saved the jobs of 6,000 others.

As for Prima, company officials concede it failed to obtain all required environmental permits but insist it is doing so now. While Prima made mistakes in the past, they say, it is now using acceptable manure-disposal and spreading techniques.

"The last thing we want to do is do damage to ecotourism or any other development opportunities in that area of Poland," Treacy, the Smithfield vice president, said in a telephone interview from Virginia. He added: "We need to do a better job of listening to folks. We're trying to open a dialogue so that we understand what the rules are and what the concerns are."

Kennedy's allegations have only made matters worse, officials say. "Farmers are afraid to talk to me because of what Kennedy said," says Jan Dominiak, Animex's livestock procurement director. "They think I'm from the mafia, that I've come to corrupt or hurt them."

Dominiak, a solidly built man who recalls fondly the year he spent studying hog-raising in Iowa more than two decades ago, says that help from companies like Smithfield is the only way Poland's economy can survive. Polish banks won't lend money to small hog farmers, but his company arranges credits. It also provides farmers with the expertise, veterinary services and other assistance to grow the uniformly low-fat pigs that international markets demand.

"I'm a simple Polish farmer from the forest," Dominiak says. "I tell our farmers the only way we can sell our products to Japan and Korea, to be part of the world markets, is with the help of a big company like Smithfield. If we have American capital, we can compete. It's very simple."

Source: http://www.washingtonpost.com/wp-dyn/articles/A4101-2004Feb1_2.html