Community | May 18, 2010 | 42 comments

Goldman Sachs investing in factory farms: exporting environmental catastrophe to China

source: http://www.huffingtonpost.com/mia-macdonald/investment-bankers-with-w_b_563373.html

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JanforGore

http://www.huffingtonpost.com/mia-macdonald/investment-bankers-with-w...

Listening to members of the Senate subcommittee on investigations interrogate Goldman Sachs executives, I couldn't help but think, "chicken." And then, "where's the beef?"

Not because the executives parried, ducked, and even drew out their syllables (much to Sen. Susan Collins's frustration) during their ten-hour grilling. But because the white shoe investment bank and securities firm has, in recent years, entered the messy world of global agribusiness.

That's right: Goldman Sachs is in the business of factory farming. Perhaps I shouldn't have been surprised: in the late 18th century, the area around Wall Street housed slaughterhouses and tanneries. The word capitalism itself is rooted in the trade of (live)stock measured by head (Latin: capita) of cattle. Nonetheless, the parallels between the killings made on Wall Street then and now are not only eerie, but consequential. Just as the securitized debt deals Goldman was hawking may be, in Warren Buffett's words, "financial weapons of mass destruction," putting the whole economic system at risk of collapse, factory farming carries a parallel risk -- of environmental destruction and exploitation of resources, prospects for food security, and animals, all on a mass scale.

Unfortunately, the Senate inquiry into Goldman's alleged malfeasance is unlikely to question why the company in 2008 decided to acquire ten intensive poultry farms in China's Hunan and Fujian provinces for $300 million. While Goldman isn't running the farms itself (that's outsourced) it retains control over the prices. "So for the record, that's: U.S. mortgages = bad . . . Asian livestock = good," is how the website Business Insider described the deal.

This isn't the firm's first foray into this arena. Goldman is also principal owner of Burger King, joining Bain and Texas Pacific in 2002 in a $2.26 billion takeover of the fast food giant. Labor activists have criticized Goldman for the poverty wages earned by full-time Burger King workers, even as the firm continues to pay out billions in bonuses, including during the great recession.

China Syndrome

In China, Goldman may well be producing chicken for its own restaurants, since Burger King has 25 Chinese outlets. In recent decades, both fast food and U.S.-style factory farms that house thousands of animals in tiny cages or stalls in indoor sheds have become increasingly common in China. But such facilities, like the ones Goldman now owns, forfeit any semblance of animal welfare and have immense environmental and social costs.

Why would Goldman want to own factory farms? Obviously, it sees an opportunity to make money, no matter the consequences. Meat consumption in China is rising rapidly; since 1980, it's quadrupled. Tyson, Smithfield, and other leading "protein producers" are active in the country, seeking new sources of profit by putting the proverbial chicken in 1.3 billion Chinese pots. Goldman must have wanted a piece of that pot, too.

Goldman's poultry purchase could be labeled with the epithet Sen. Carl Levin used repeatedly at the hearings riffing on a Goldman employee's email description of one of the firm's securities schemes (a "shitty deal").

Filthy Lucre

According to Wu Weixiang, an associate professor at China's Zhejiang University's Agriculture College, "Domestic animal and poultry waste has become a major source of environmental pollution." Indeed, China's billions of farmed animals produce an estimated 2.7 billion tons of manure a year--three-and-a-half times industrial solid waste levels--and runoff from livestock facilities has led to a significant "dead zone" in the South China Sea, akin to that in the Gulf of Mexico, which is also the result of agriculture.

The poultry deal also contradicts a Goldman business principle. "Our responsibility for environmental stewardship does not fluctuate with changing economic conditions," the firm's 2008 Environmental Report states. "We hope our work continues to inspire action and creative market-based solutions that can help our environment endure and thrive.

Only three percent of China's large and medium-sized livestock operations have facilities to treat animal wastes, according to Xu Cheng, a professor at China Agricultural University. Do Goldman's?

Just a year and a half ago, Goldman was kept afloat by billions of dollars in U.S. government funds. Does that mean U.S. taxpayer dollars subsidized cruel, polluting, climate-heating factory farms in China? Even if the connection isn't direct, what are we to make of an elite private equity firm like Goldman helping expand industrial-scale animal facilities?

cont.
  1. groups:
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  2. tags:
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42 comments // Goldman Sachs investing in factory farms: exporting environmental catastrophe to China

  • artemis6
  • AsiaSuperLoop
    • 0
      AsiaSuperLoop  

    • Goldman Sachs is also involved in the physical oil business through its J. Aron commodities trading subsidiary. Why?

      Because having a hand in the physical completes trading in that asset class, whether it's energy or soft commodity agricultural goods. Arbitrage then becomes possible against derivatives in that asset class.

      A hedging and arbitrage capacity supports the expansion of a trading book in an asset class. The trading book becomes nimble. A strong hand in the derivatives markets for an asset class then affects pricing in the physical, especially if the derivatives float far exceeds the float in the physical. There is an "asymmetry". The derivative controls its underlying.

      Floating above energy and agricultural commodities, including their corresponding derivatives, is the market in carbon, which is highly correlated with energy, food and water.

      Chickens? Well, a small matter ultimately.

      The golden ring is carbon trading.

    • 2 years ago
  • JanforGore
    • +1
      JanforGore  

    • The next pandemic may well be due to factory farming as well. Will Goldman Sachs take responsibility for that or will they then invest in vaccines if they aren't already?

    • 2 years ago
  • Brett_Davis
    • -3
      Brett_Davis  

    • the way i see it in you have two choices in american politics; either you support big business, or big government, and big business has proved to me countless times in the last decade that they are not worthy of support.

      i know theres waste and corruption when you let big government take over but not nearly on the scale or level of evil and greed that these corporate ceos have demonstrated

      the lesser of two evils

    • 2 years ago
  • manhattan_project
  • manhattan_project
  • alexandrek
  • Brad_Horton
    • +2
      Brad_Horton  

    • There are just too many rats in the cage. Last year we used the resources of 1.4 earths? What does that even mean? How do you provide nutrition in the inner city with populations in the 10 million + range? No family farm there eh. This is greed driven for sure, and GS should have been allowed to fail, hell encouraged to fail, but at the end of the day billions have to eat and we keep breeding ourselves into a deeper, manure filled hole.

    • 2 years ago
  • Johnll
  • Maeveeo
    • +3
      Maeveeo  

    • More than that , they would Screw there own mothers for ah buck ! Money is the root of getting screwed & these guys wanna make alot of it aT THE RISK OF MANY !

    • 2 years ago
  • Psymoniac
  • freal
  • Jahvega
    • +3
      Jahvega  

    • Keep the stories coming!! theses are issues we need out! help spread the word! Don't let people go with out hearing, stop them in their tracks and tell them, " HEY,LISTEN!"

    • 3 years ago
  • Brett_Davis
  • Kurta
    • +1
      Kurta  

    • Yeah, China needs help with their inhumane animal industries...

      I guess Sachs is getting tired of fucking humans over so they're going to give animals a try.

      Where's the Republican outcry over this? They ARE helping China after all. Oh yeah, there's money invoved, I forgot...

    • 3 years ago
  • chinese_democracy
    • +4
      chinese_democracy  

    • If it's profitable and morally corrupt, then it has to be connected to Goldman Sachs either directly or indirectly through less that 3 associates.
      Everyone KNOWS that they have active politicians on their payroll and have had many in the past.
      Republican. Democrat. No such thing. There is only one party and it is called Goldman Sachs.

    • 3 years ago
  • Nephwrack
  • donkeyfly69
  • hunzedog
  • Tayllerand
    • +3
      Tayllerand  

    • Janforgore, check airborne fungus spreading like wild fire in Washington,Oregon,California and British Columbia its call cryptococus gatti, they say is a new mutation. I wonder why the corporate media doesnt say anything about it? Google it !

    • 3 years ago
  • Conniepae
    • +2
      Conniepae  
    • Tayllerand:

      They pick and choose what we see as news.

      I'm sick of hearing 'It's no my fault'? Then 'Nothing to see here, move along' from MSM? By the time this is covered, it will be another environmental nightmare. The actions of PB illustrates their incompetence to the real dangers they pose. Where will it end, or even turn the corner? When real people are really held accountable? Shame, shame, shame!

      This post was amazing to read. I didn't think anything could surprise me. But, this was 'OH MY GOD'.

      What will happen when they destroy all the land and water? All for the sake of capitalists? Millionaires, now billionaires? What values will their money have when they destroy the planet. Maybe they plan to trade chickens, when they ruin the value of the dollar?

    • 3 years ago
  • Mark701
    • +7
      Mark701  

    • You have to remember one thing about "American" capitalism, there is no such thing as a "US" corporation. US corporations, any corporation for that matter, does ONLY what is good for the corporation, not their country of origin or the people. Their loyalty is to money, nothing else. So no one should be surprised that they destroyed the US economy, took US taxpayer money, refused to invest in US jobs and infrastructure and run chicken farms in foreign countries. Do you see them suffering? No. This is what and who they are i.e.conscienceless machines of profit.

    • 3 years ago
  • donkeyfly69
  • JanforGore
  • donkeyfly69
  • Kurta
  • donkeyfly69
  • blaino
    • +4
      blaino  

    • Jesus god almighty! Industrial farming is awful. They treat the animals awful, which in turn makes the meat awful. Its all hopped up on hormones and fat.

      We should all have backyard farms. We wouldnt be able to raise big livestock like cattle, unless you have the space, but smaller animals like rabbits and such would be a viable option.

      It would be a lot cleaner and tons healthier. Backyard farming is the way to go!

    • 3 years ago
  • JanforGore
  • EthicalVegan
  • parisinla
  • JanforGore
  • JanforGore
    • +7
      JanforGore  

    • Factory farms are also now in India, Latin America, and of course the U.S. They are literally poisoning our land, water, ourselves and animals while abusing them, and our government is using our tax dollars to bail out these bastards who invest in their environmentally destructive insanity for profit. OUTRAGE doesn't begin to describe it. And you're correct, manhattan_project, most do not care.They would continue bying Tyson's and other company's crap even after being told how it gets to them! I simply cannot wrap my head around the absolute disconnect people now have with their Earth.

    • 3 years ago
  • CalgarC
  • manhattan_project
  • Einsam_Data_Old
  • EthicalVegan
    • +5
      EthicalVegan  
    • Einsam_Data_Old:

      Applause, applause, applause! I am so glad you brought up animal research, especially. Greed. Damn ugly greed.

      "Part of it is the public is ill-informed and lazy..." And isn't THAT the damn truth?!! So we need to find ways to spread the word of what is REALLY going on, and what can be done. It's a sad world where most people don't seem to care, and it's sadder still that most people have no IDEA of these horrors.

    • 3 years ago
  • EthicalVegan
  • Kurta
  • pjacobs51
  • treewolf39
    • +8
      treewolf39  

    • We should have known. We need world wide food labeling and transparency into parent companies. Goldman Sachs belongs behind bars.

    • 3 years ago
  • JanforGore
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