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We offer a brief overview of the expansion of agribusiness in the global food system in the past two decades, with some thoughts on what we can expect from these companies in the years ahead.______________________________

Back in the early 1990s, many of Seedling’s pages were devoted to discussions about international treaties and public research agendas. Corporations were part of the discussion, but mainly as a looming threat, one group of actors pushing forward the industrial model of agriculture that was destroying agricultural biodiversity. Fast-forward twenty years, and the landscape has changed. Corporate power in the food system has grown by leaps and bounds. Today corporations set the global rules, with governments and public research centres following their lead.

The fall-out of this transformation for the planet’s biodiversity, and the people who look after it, has been devastating. Corporations have used their power to expand monoculture crop production, undermine farmers’ seed systems and cut into local markets. They are making it much more difficult for small farmers to stay on the land and feed their families and communities. This is why social movements are increasingly pointing to food and agribusiness corporations as the problem in the global food system and the focus of their resistance.

Seeds

Over the past two decades the seed industry has been dramatically transformed, from an industry of small seed companies and public programmes to an industry dominated by a handful of transnational corporations (TNCs). Today just ten corporations control half of the global market for commercial seeds (see illustration, “Top 10 corporations’ share of the global seed market”, page 16). Most are pesticide producers focusing on the development of genetically modified (GM) crops that support a chemically intensive agriculture.

The high level of corporate control in seeds, however, is confined to those crops where these companies have been able to bring GM varieties to market (soya, oilseed rape, and maize) and to those countries with relatively large commercial seed markets, particularly where the commercialisation of GM varieties has been allowed. In the US, for instance, just one company, Monsanto, controls over 90 per cent of the seed market for soya. Corporate efforts to expand markets are thus focusing on opening more markets to GM crops and on capturing seed markets for crops in which they are still only minor players. With the latter, they are primarily doing two things. One is to buy up all or part of smaller seed companies, as Monsanto did by taking over the vegetable seed company Seminis, or as Limagrain is doing by buying into wheat seed companies in the Americas and rice seed companies in Asia. The second is by developing hybrid and/or GM varieties of crops such as rice, wheat and sugar cane, which have traditionally resisted private sector involvement because of the general practice among farmers of saving seeds.

With the rise of transnational seed corporations, the public plant breeding systems, which were so significant 20 years ago, have been reduced to contractors for the private sector. The Consultative Group on International Agricultural Research (CGIAR) system is now firmly in bed with the transnationals, pursuing a growing number of joint research and development projects in GMOs and partnership programmes where CGIAR centres actually sell their breeding material to the highest bidder. The national research institutions and universities have gone down the same path, with many now behaving more like private companies than institutions with a public mandate.

Public seed systems are thus disappearing as a major source of seeds for farmers, and into this hole, often with the collaboration of public research institutions, the private sector is insinuating itself. The second wave of Green-Revolution-style programmes that Bill Gates and other donors are currently pursuing puts the private sector in charge of the seed supply, rather than public seed programmes, as was the case in the past. Typically, these initiatives seek to build up local private seed companies that can establish marketing channels and build up networks of seed growers. While most of these small seed companies will inevitably be bought up or squeezed out by larger transnationals, in the meantime they not only get markets up and running, but also provide critical domestic support to push for changes to seed regulations, intellectual property laws, and biosafety legislation that undermine farmers’ seed systems and pave the way for the big corporations to step in and take over the market.
The implicit (and rarely stated) intent of these programmes is to supply seeds to a new class of medium-scale and large-scale farmers in Africa and elsewhere who can pay for the seeds. There is no interest in supporting seed systems that are controlled by and that serve peasant farmers producing for their families and communities. The expansion of the corporate seed sector is indeed inseparable from the corporate expansion in farming and markets discussed below. The most dramatic case is the boom in sales of Monsanto’s GM soya beans that has accompanied the massive expansion of soya plantations for export in Argentina and Brazil since 1996. Similar models of production are now being applied and pursued elsewhere, across the Americas, Africa and Asia, displacing local seed systems with corporate seed systems in the process. In fact, in many cases the introduction of corporate seeds precedes the imposition of corporate farming. For instance, Chinese programmes to promote the use of Chinese hybrid rice varieties in Africa are part of a long-term effort to establish large-scale rice farming on the continent for export back to China.

The situation today with seeds is like a form of apartheid. On one side, there’s the so-called formal sector: the private companies, the national and international research institutes and the governmental agencies pursuing the development of varieties for an industrial model of agriculture completely at odds with the needs of small farmers and local food systems. This side has lots of money and is supported by all kinds of laws (intellectual property rights [IPRs], seed regulations, investment protections, and so on), and it also has all the access it needs to the biodiversity developed by farmers and now stored in gene banks. On the other side, there are farmers’ seed systems, which still provide food for much of the planet, but which receive almost no support from governments, who instead are increasingly repressing and even criminalising them.

Farming

Much has been said about the rise of corporate control over seeds. But there has been an equally dramatic rise in corporate control over farming during the past two decades that has received less attention, and that now threatens to get much worse. As with the Green Revolution, some of this control has come about through seeds, since GM crops and hybrids enforce a chemically intensive model of farming. Of greater significance, however, has been the intensification of vertical integration.

In the 1960s and 70s, many of the farms and plantations set up under colonial occupation were nationalised, and the general trend among global food corporations was to move away from direct production. For the most part, capital chose instead to enter farming through the input side – by controlling the sale of seeds, fertilisers and machinery. In recent years, however, that trend has turned around.

Table: PepsiCo’s farming operations
Farms 10 potato farms in China;
  1 dairy farm in Jordan;
  1 dairy farm in Egypt
Contract farming operations 12,000 farmers for potatoes in India;
  1,200 farmers for barley in India;
  6,000 ha (approx.) under contract farming for rice, tomato and chili in India

Corporations are exercising more and more direct control over farming, particularly through contract farming. In the livestock sector, for example, more than 50 per cent of the world’s pork and 66 per cent of the world’s poultry and egg production now takes place on industrial farms, which are generally either owned by large meat corporations or under contract to them.1 In Brazil, 75 per cent of poultry production is under contract, while in Vietnam 90 per cent of dairy production is under contract.2 Contract production is also expanding for export commodities such as cacao, coffee, cashews and fruits and vegetables. It is even on the rise for staple foods, such as wheat and rice. In Vietnam, 40 per cent of rice production is farmed under contract with companies.

Part of the reason for this vertical integration is that global retailers are demanding strict adherence to certain standards, which they dictate. Their suppliers thus want to ensure that farmers produce according to strict specifications. These companies have extreme market power, and can force their contract growers to agree to near bondage-like conditions. As these farmers are not employed directly by the companies, the companies do not have to comply with labour laws or deal with unions (see illustration: “Who works for whom?”).

Table: Some agricultural commodity trading companies investing in farms
Company Farms
Cargill Palm oil, sugar cane, dairy, cattle, poultry, pigs, sugar cane, aquaculture
Olam Dairy, almonds, palm oil
Bunge Sugar cane, cereals, oil seeds, cattle
Louis Dreyfus Sugar cane, cereals, oranges
Mitsui Cotton, dairy, oilseeds, cereals, poultry, shrimp
Glencore Oilseeds, cereals
ADM Sugar cane, palm oil (with Wilmar)
Noble Group Oilseeds, cereals
Charoen Pokphand Pigs, poultry, aquaculture, fruit and vegetables, palm oil
Wilmar Palm oil, sugar cane

One consequence of this trend towards vertical integration and tightly integrated supply chains is the emergence of what can be called corporate farmers. These are companies, sometimes owned by families and often owned by a mix of investors and even shareholders, with large-scale operations, typically in different parts of a country and sometimes in more than one country. In Argentina, for instance, where the emergence of such companies is particularly striking, just 30 companies now control over 2.4 million hectares of farmland.3 In the Ukraine, 25 companies control around 3 million hectares of farmland – 10 per cent of the country’s total.4 Most of these new corporate farmers have special supply arrangements with downstream corporations, as China’s poultry producer DaChan has with McDonald’s, and some of them have been taken over by their downstream clients, such as Hortifruiti, the biggest fresh-fruit and vegetable producer in Central America, which was acquired by Walmart. Indeed, increasingly the transnational corporations are doing the farming themselves, whether it is with fruits, cereals, dairy, beef or sugar cane (see Table: “Some agricultural commodity trading companies investing in farms”).

And there are other forces driving this recent corporate push into farming. The convergence of the food and financial crises in 2008 triggered a wave of investment in overseas food production and farmland, both by financial investors looking for a secure source of long-term profits and by certain governments rethinking their reliance on the corporate global food system to assure their food security. The recent creation of new markets for biofuels has also brought more corporations into farming. With legislation guaranteeing markets for ethanol and biodiesel in industrial and so-called emerging economies, financial investors and corporations from the energy sector have been pouring money into farming operations for biofuel production. (Continue: for more information)