By Christine Chemnitz
The industrial-agriculture sector has long faced criticism for practices that contribute to climate change, environmental destruction, and rural poverty. And yet the sector has taken virtually no steps to improve quality and sustainability, or to promote social justice.
This is not surprising. Although there are more than 570 million farmers and seven billion consumers worldwide, just a handful of companies control the global industrial-agriculture value chain – from field to shop counter. Given the high profits and vast political power of these companies, changes to the status quo are not in their interest.
Moreover, market concentration in the agriculture sector is on the rise, owing to increased demand for the agricultural raw materials needed in food, animal feed, and energy production. As the middle class in southern countries has grown, its members’ consumption and nutritional habits have changed, boosting global demand for processed foods – and setting off a scramble for market power among multinational agricultural, chemical, and food corporations.
The biggest players in these sectors have been buying out their smaller competitors for years. But now they are also buying out one another, often with financing provided by investors from completely different sectors.
Consider the seed and agrochemical sector, where Bayer, the second-largest pesticide producer in the world, is in the process of acquiring Monsanto, the largest seed producer, for €66 billion ($74 billion). If the United States and the European Union approve the deal, as seems likely, just three conglomerates – Bayer-Monsanto, Dow-DuPont and ChemChina-Syngenta – will control over 60% of the global seed and agrochemical market. “Baysanto” alone would be the proprietor of almost every genetically modified plant on the planet.
With other large mergers also being announced, the global agriculture market at the end of 2017 could look very different than it did at the beginning. Each of the three major conglomerates will be closer to its goal of achieving domination of the seed and pesticide markets – at which point they will be able to dictate food products, prices, and quality worldwide.
The agrotechnical sector is experiencing some of the same changes as the seed sector. The five largest corporations account for 65% of the market, with Deere & Company, the owner of the John Deere brand, in the lead. In 2015, Deere & Company reported $29 billion in sales, surpassing the $25 billion that Monsanto and Bayer made selling seeds and pesticides.
The most promising new opportunity for food corporations today lies in the digitization of agriculture. This process is still in its early stages, but it is gathering momentum, and eventually it will cover all areas of production. Soon enough, drones will take over the task of spraying pesticides; livestock will be equipped with sensors to track milk quantities, movement patterns, and feed rations; tractors will be controlled by GPS; and app-controlled sowing machines will assess soil quality to determine the optimal distance between rows and plants.
To maximize the benefits of these new technologies, the companies that already dominate the value chain have begun cooperating with one another. The John Deeres and Monsantos have now joined forces. The confluence of soil and weather “big data,” new agrotechnologies, genetically modified seeds, and new developments in agrochemistry will help these companies save money, protect natural resources, and maximize crop yields worldwide.
But while this possible future bodes well for some of the world’s largest companies, it leaves the environmental and social problems associated with industrialized agriculture unsolved. Most farmers, particularly in the global South, will never be able to afford expensive digital-age machinery. The maxim “grow or go” will be replaced with “digitize or disappear.” The ETC Group, an American non-governmental organization, has already outlined a future scenario in which the major agrotechnology corporations move upstream and absorb the seed and pesticide producers. At that point, just a few companies will determine everything that we eat.
Indeed, the same market-concentration problem applies to other links in the value chain, such as agricultural traders and supermarkets. And even though food processing is not yet consolidated on a global scale, it is still dominated at the regional level by companies such as Unilever, Danone, Mondelez, and Nestlé. These companies make money when fresh or semi-processed food is replaced by highly processed convenience foods such as frozen pizza, canned soup, and ready-made meals.
While lucrative, this business model is closely linked to obesity, diabetes, and other chronic diseases. Worse, food corporations are also profiting from the proliferation of illnesses for which they are partly responsible, by marketing “healthy” processed foods enriched with protein, vitamins, probiotics, and omega-3 fatty acids.
Meanwhile, corporations are amassing market power at the expense of those at the bottom of the value chain: farmers and workers. International Labor Organization standards guarantee all workers the right to organize, and they prohibit forced and child labor and proscribe race and gender discrimination. But labor-law violations have become the norm, because efforts to enforce ILO rules are often quashed, while trade union members are routinely threatened, fired, and even murdered.
In this hostile climate, minimum-wage, overtime-pay, and workplace-safety standards are openly neglected. And women, in particular, are at a disadvantage, because they are paid less than their male counterparts and often must settle for seasonal or temporary jobs.
Today, half of the world’s 800 million starving people are small farmers and workers connected to the agricultural sector. Their lot will hardly improve if the few companies already dominating that sector become even more powerful.
Copyright: Project Syndicate: The Rise of the Food Barons
Follow us on Twitter @AzerNewsAz