Module

Consolidation of Power in the Global Food System

As you’ve learned from the previous modules, local control over food production has been largely lost worldwide. Movements like the Food Sovereignty movement are working hard to reverse this trend. However, root causes of this loss, including political devices like free trade agreements, land grabs, and other policies, have additionally increased powerful corporate control of the global food system.

In this module, you’ll learn about some of the forces causing small farmers to lose control over their lands and traditional modes of production, and learn about the multinational corporations that continue to gain more and more power over land, food, seeds and even consumer choice. You’ll explore the history of consolidation of power in the food system and what it means for the future.

Excerpt 1: Loss of Local Control over Agricultural Production

by Stephen Gliessman | Agroecology: The Ecology of Sustainable Agriculture, 3rd Ed.

Accompanying the concentration of agriculture into large-scale monocultural systems and factory farms has been a dramatic decline in the number of farms and farmers, especially in developed countries where mechanization and high levels of external inputs are the norm. From 1920 to the turn of the century, the number of farms in the United States dropped from more than 6.5 million to just over 2 million, and the percentage of the population that lived and worked on farms dropped below 2%. Data from the 2000 US census showed that only 0.4% of the employed civilians in the United States listed their occupation as “farmer or rancher” (US Census Bureau 2005). Although the 2007 agricultural census showed the first increase in the number of farms in more than 30 years, the increase was primarily in large- and small-scale operations. Midsize farms have continued to decline in the United States at much the same rate as seen during the last century (Gliessman 2009).

In developing countries as well, rural people who work primarily in agriculture continue to abandon the land to move to urban and industrial areas, which will hold an estimated 60% of the world’s population by 2030, and perhaps 70% by 2050. China is now carrying out a long-term plan to move 250 million rural people- most of them small-scale farmers- into newly built towns and cities. The country’s leaders hope that expanding the number of urban dwellers will greatly increase consumption and thus economic growth, but they have not directly addressed the issue of how those in cities will be fed, or what the effects will be of leaving responsibility for food production in the hands of fewer and fewer people. There are now far more people in the world whose livelihoods are non-agricultural than there are people who grow food, and this gap continues to widen over time.

Besides encouraging an exodus from rural areas, large-scale commodity-oriented farming tends to wrest control of food production from rural communities. This trend is disturbing because local control and place-based knowledge and connection are crucial to the kind of management required for sustainable production. Food production carried out according to the dictates of the global market, and through technologies developed elsewhere, inevitably severs the connection to ecological principles. Experience-based management skill is replaced by purchased inputs requiring more capital, energy, and use of nonrenewable resources. Farmers become mere instruments of technology application, rather than independent decision makers and managers.

Small-scale farmers seem to have little power against the advancement of industrial agriculture. Smaller farms cannot afford the cost of upgrading their farm equipment and technologies in order to compete successfully with the large farm operations. Moreover, the increase in the share of the food dollar going to distributors and marketers, coupled with cheap food policies that have kept farm prices relatively stable, has left many farmers in a tightening squeeze between farmers and consumers, US farmers’ share of the food dollar has continued to shrink, and now stands below $0.16 according to the USDA (Economic Research Service 2014).

Faced with such economic uncertainty, there is less incentive for farmers to stay on the land. One trend is for larger farmers to buy out their smaller neighbors. But when agricultural land is adjacent to rapidly expanding urban centers, such as in California, the incentive instead is to sell farmland at the inflated value it has as urban land. Because of this dynamic, the agriculturally rich Great Central Valley of California has seen the loss of hundreds of thousands of hectares of farmland since 1950, and the rate of loss of agricultural land in the state as a whole averaged 49,700 acres annually from 1988 to 1998 (Kuminoff et al. 2001).

In less-developed countries, the growth of large-scale export agriculture has an even more ominous effect. Elites in these countries have, for a long time, gained control of land through various and often illegal means to increase production of export crops. More recently, however, the growing value of agricultural land in less-developed countries has attracted international investors, who have been buying it up at a rapid pace. In the decade between 2000 to 2010, more than 203 million hectacres of land in less-developed countries were the object of sale or lease negotiations (Anseeuw et al. 2012). The majority of these land deals were made for the express purpose of growing export crops- biofuels in particular- and will contribute nothing to the food supplies of the countries in which they are located. In nearly all cases, realizing investors’ plans means removing the people living on and farming the land, often violently and usually without consultation or compensation (Geary 2012).

As a result of these and other trends, rural people–once able to feed themselves adequately and sell surplus food to city dwellers–now make up the most food-insecure group worldwide. It is estimated that 80% of the world’s hungry live in rural areas (Mikhail 2012). And as more and more rural smallholders are pushed off the land, they migrate to cities, where they become dependent on others for their food. Since more of the food produced in the countryside is destined for export, increasing amounts of food for the expanding urban areas must be imported. In 2009, 111 developing countries in the world, most of them with low average incomes, were classified as “net food importers” (Valdéz and Foster 2012). This imbalance threatens the food security of less-developed countries and makes their people extremely vulnerable to spikes in the prices of globally-traded food staples.


Excerpt 2: How Corporations have Consolidated Control in the Food System

By Ivette Perfecto, John Vandermeer, Angus Wright | Nature’s Matrix: Linking Agriculture, Conservation and Food Sovereignty, 2009

The Industrial Model: From Peanuts to Peanut Butter

For years, political economists asked why it is that in agriculture we don’t see the same process of capital penetration that we see in other sectors of the economy. In other words, why small farms have not been completely displaced and turned into industrialized corporate mega-farms. A partial answer to this question lies in the distinction between farming and agriculture. Farming is the process of turning seeds into harvestable crops with the use of labour, energy and other resources, like land and water. Agriculture is not just farming, but also the production of agricultural inputs and the processing, packaging, transportation and marketing of the outputs. As evolutionary biologist Richard Lewontin said, ‘Farming is growing peanuts on the land. Agriculture is making peanut butter from petroleum. When examined in this manner, there is no doubt that capital has indeed penetrated the agricultural sector. However, until recently, farming, the most vulnerable, risky and unpredictable component of agriculture, was left to the farmers.

The post-World War II capitalization of agriculture was accomplished primarily through the substitution of inputs that were generated from within the farm itself, with inputs that were manufactured outside the farm and needed to be purchased. Starting with the early mechanization of agriculture that substituted traction power for animal power, to the substitution of synthetic fertilizer for compost and manure, to the substitution of pesticides for cultural and biological control, the history of agricultural technological development has been a process of capitalization that has resulted in the reduction of the value added within the farm itself. In today’s farms, the labour comes from Caterpillar or John Deere, the energy from Exxon/Mobile, the fertilizer from DuPont, and the pest management from Dow or Monsanto. Seeds, literally the ‘germ’ that makes agriculture possible, have been patented and need to be bought. This stifles, and in some cases even ends, the millenary practice of seed saving and crop improvement by farmers.

The output side of agriculture is not very different. Once the ‘product’ leaves the farms, it is increasingly processed, packaged, transported, marketed and sold by large corporations. As an example, Figure 3.1 shows the UK wheat bread bottleneck that illustrates how both farmers and consumers are dependent on a few traders, millers, bakers and retailers.
Similar bottleneck graphs can be drawn for many other agricultural products.

Screen Shot 2016-05-18 at 3.43.40 PMSource: Vorley (2003)

The last 30 years have seen a process of consolidation and vertical and horizontal integration of agribusiness that has resulted in just a handful of corporations supplying farm inputs and buying farm outputs. In Figure 3.2 we present a simplified diagram of the structure of agriculture in the US. The direct producers of food, the farmers, are squeezed between powerful oligopolies (like Monsanto, Exxon/Mobile and Syngenta) that control the prices of farm inputs, and powerful oligopsonies (like Cargill, Continental, ADM and Campbell Soup) that control the prices of farm outputs. When analysed in this fashion, it becomes evident that the billions of dollars in commodity subsidies in the US actually represent an indirect subsidy to corporate agribusiness.

Screen Shot 2016-05-18 at 4.00.13 PM
This general structure can be seen in almost any part of the world where agriculture is capitalized. In recent years retailers have also consolidated as megastores, and are playing a crucial role in the commodity chain. For example, in Latin America, by 1993 large supermarket chains already controlled 10 to 20 per cent of food sales, and by 2003 only five corporations were controlling 65 per cent of the sales. It is partially because of this structure that the farmers receive only about 10 per cent of what the consumers pay for the food they buy in the supermarkets.

The Industrial System in Crisis

The view that industrial agriculture has spawned significant problems is hardly contestable, and has become general knowledge.The modernization of agriculture included two very general goals: more frequent use of the same area of land (e.g. decrease the time of fallow periods) and increased specialization of productive species (loss of plant biodiversity, usually in the pursuit of higher yields and ease of mechanization). The extended fallow periods of many forms of traditional agriculture were abandoned in order to use the same area of land every year or for continuous production. The increased frequency of resource withdrawal was subsidized with increased use of external inputs. The loss of fallow periods and use of chemical fertilizers can lead to loss of soil fertility, in part through disruption of the soil microbial systems, and decreases in macrofaunal and plant-associated biodiversity. The ecosystem functions often provided by such associated biodiversity (e.g. nutrient retention, biological pest control, pollination) are necessarily lost as well.

Biodiversity in the ecosystem is decreased further when traditional, diverse, locally adapted crop varieties with resistance to native diseases and pests are abandoned and intercropping is halted in favour of highyield monocultures amenable to mechanized production methods. Furthermore, higher-yielding crop varieties are often less resistant to pathogens and pests, especially given the highly dense and structurally simple concentration of plants, and are more prone to the spread of insect pests and diseases. In the transition from diverse crops and intercropping to monoculture many natural enemies of the pests are lost, increasing the need for pesticide applications.

Article 1: Global Agribusiness: Two Decades of Plunder

by GRAIN, 2010

Visualizing Corporate Control of Seeds and Food Industry:

“Big Ten” Infographic: Food Brand Owernship 

Seed Industry Structure

Optional:

Click here to take the Foodopoly Quiz to see what you know about who controls your food.


FORUM QUESTION: CONSOLIDATION OF POWER