from Project
Censored:
LEFT TURN, August/September
2003
Title: Concentration in the
Agri-Food System
Author: Hilary
Mertaugh
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Over the last two decades,
agribusiness and food retail mergers,
acquisitions, joint ventures,
and informal contract agreements have
transformed the agri-food
system into a powerful network of
transnational corporations
that have the power to control the
worlds
food supply at every stage of
food productionfrom gene to market
shelf. By cooperating with
one another rather than competing,
transnational corporations
escape the scrutiny of federal
anti-trust
regulators and manipulate the
market through non-merger alliances.
In April 2002, the worlds two
largest seed corporations, DuPont and
Monsanto announced that they
would agree to swap their key patented
agricultural technologies and
drop all outstanding patent lawsuits.
The flurry of mergers and
acquisitions throughout the agri-food
system has created highly
concentrated markets as agribusinesses
expand their dominance by
diversifying their commodities. Cargill
is among the top five
companies in the US market for flour
milling,
grain and oilseed processing,
salt production, corn and soybean
exports, turkey production
and processing, pork processing, and
beer processing.
As fewer corporations control
each stage of food production, farming
is becoming a kind of
serfdom. Consolidation among suppliers
and
processors leave farmers with
few choices of who to buy from and
who to sell to. Dominant
agribusinesses have the ability to drive
up the prices they charge for
inputs while watering down the prices
they pay for outputs.
Furthermore, the rise of patented seed
varieties
places farmers in an even
worse position, as agricultural biotech
companies gain ownership of
the germplasm itself.
Consolidation in the food
system is not limited to the production
and processing side.
Consolidation activity among food
retailers
has catalyzed a domino effect
of mergers and acquisitions. ConAgra,
a company few Americans have
heard of, is a major force in food
production in the US and has
continued to aggressively acquire small
rivals while expanding its
operation worldwide. It is estimated to
be the #3 seller of retail
food products in the world. Although
consumers might be unfamiliar
with the name ConAgra, they will
recognize some, if not all,
of ConAgras popular brand names: Armour,
Butterball, Chef Boyardee,
Healthy Choice, La Choy, Orville
Reddenbacher, Parkay and
Hebrew National, just to name a few.
ConAgra
is also known for a recall of
19 million pounds of tainted beef
after 47 people were sickened
and one died from E. coli poisoning
in 2002.
The top five supermarket
chains capture one half of all food
sales
in the US, and it is widely
predicted that there will soon be only
six major retail supermarkets
selling the majority of the worlds
food. Because it is necessary
for each and every one of us to eat
and drink, we will pay what
it takes to make sure we do not go
hungry or thirsty. Although
food may appear to be cheap with fewer
and fewer retailers, lack of
competition will ultimately lead to
higher prices, lack of
choice, and poorly paid employees.
Wal-Mart
typically sells grocery
products at prices 14% lower than
competing
grocers, in part because the
company is a non-union employer that
hires clerks at below-poverty
wages.
Food corporations rely on the
consumers lack of knowledge as to
where their food comes from,
how it is produced, and who wins the
profits. The trend toward
consolidation at every stage along the
food production chain has
dramatically impacted the global economy
and distribution of income
and wealth. Given the c omplexities of
the domestic policy-making
and legislative processes, and the
numerous mergers,
acquisitions, joint ventures and
non-merger
mergers, it is not surprising
that few people are aware of the
degree to which food
companies influence food safety
policies,
competition and decide where
and how food is produced and how much
it will cost.
Prior to committing suicide
as an act of political protest on
September 10, 2003 against
the World Trade Organization in Cancun,
Mexico, Lee Kyung-Hae, a
56-year old farmer from South Korea
circulated the following
statement. My warning goes to all
citizens
that human beings are in an
endangered situation in which
uncontrolled
multinational corporations
and a small number of big WTO official
members are leading
undesirable globalization of inhumane,
environmentally degrading,
farmer-killing and undemocratic
policies.
It should be stopped
immediately, otherwise the false logic
of
neo-liberalism will perish
the diversities of global agriculture
with disastrous consequences
to all human beings.