Dystopian agriculture and the hegemony of food industry barons
reported by Mehr reporter, Hossein Shirzad, an analyst of the agriculture sector, wrote in an exclusive note for Mehr in the field of global food security; The utopian beliefs emanating from the agricultural teachings of the Green Revolution in the 20th century have turned into a “dystopian” image of agriculture under the control and hegemony of the food industry giants in the post-corona world. The global food system has become increasingly interconnected since the beginning of the 20th century. Diets have been standardized around the world. While in most regions people eat more diverse foods than in the past, human diets are increasingly similar everywhere. In this regard, critical thinkers of international food systems call the biggest actors of food and agriculture industries “food barons”. This title refers to the power of these companies in controlling the food industry.
The giants of the food industry have captured huge portions of the market for everything from coffee to chicken thighs. Food barons are billionaires who profit from the cost of living crisis. These companies have stabilized their profits for decades and control a large volume of this sector. While large agribusiness and food companies have long controlled the farmlands of the global South, and agriculture in the South has long been export-oriented, this dynamic is consolidating and the power of international agribusinesses is deepening. Since the 1970s, agricultural inputs such as fertilizers and seeds, agricultural land, and the entire agricultural supply chain, even beyond food production (i.e., distribution and retail), have become increasingly concentrated in the hands of just a few agricultural companies.
Today, Nordic countries and emerging economies such as China and India host the headquarters of 6 large companies, which account for 58% of the global seed market and 77% They own 6% of the global market of agricultural chemicals. The past decade, especially between 2008 and 2018, saw many corporate mergers that merged previously separate sectors of the agricultural sector under the umbrella of several powerful multinational corporations. Now, producers of fertilizers and agrochemical formulations, plant breeders, grain traders, and tractor manufacturers are often not run as separate businesses.
Big companies like Bayer and Monsanto have simply become Bayer Holdings, and Dow and DuPont are now Corteva. Agriscience have changed their legal nature, while ChemChina has merged the world’s most famous pesticide company, Syngenta. Food barons made the most of the converging crises in 2020 with the “Mechanism of Mergers and Acquisitions” to tighten their control over the industrial food chain.
Big companies have profited from the covid-19 pandemic, climate change and constant war. Statistics show that although 2020 was a terrible year for food security, it was a strange year for Big Food and Big Agriculture. The world’s leading food and agricultural commodity traders combined to generate more than half a trillion dollars in revenue this year. In 2020, at the same time as the spread of the Covid-19 pandemic, the issue of quarantines, centralized markets, logistical disruptions and the spread of the health crisis exacerbated hunger and food insecurity, and approximately 12% of the world’s population – 928 million people – were severely food insecure. . In the meantime, climate change increased. Fire in Australia. Severe droughts in the Southern Cone of Latin America, crippling floods and locust plagues in sub-Saharan Africa, and worsening hunger and acute poverty, extreme volatility and staggering economic inequality have now become defining features of global food and agricultural markets with asymmetric impacts. Even as global food insecurity, food prices and hunger rise, Big Food and Big Ags set new record profits.
At the same time, the Covid-19 pandemic has brutally exposed the extreme vulnerability of the world’s highly centralized and industrialized food system that exploits workers. and revealed that it relies on global supply chains that are opaque and prone to disruption and corruption. The concentration of food companies is a fundamental driver of these and other failures in all links of the industrial food chain.
Global trade in food products during the pandemic corona
World trade of all agricultural products reached about 1.33 trillion dollars in 2019. As of 2022, at least 43 percent of global trade in agricultural commodities is controlled by just ten companies. In the world of objective facts, this percentage may be even higher; Because global supply chains are non-transparent and a lot of information is produced by the companies themselves, which are among the most powerful and non-transparent companies in the global supply chain. Also, the last decade has witnessed the increasing influence of “Fintech or financial technology and digital technology companies” in the agricultural sector through increased participation and investment in laboratories, farms and agri-food retail system.
Today, big data is increasingly being used by food companies to strengthen their control over the global agricultural system in which Large conglomerate holdings traditionally control the strategic control points of farm production. This data deployment occurs at different levels. In the food sector, Walmart receives 30% of consumer spending on food worldwide. As companies become more concentrated, these holdings become more protective of their information, and in a world where market information is monopolized, it becomes much more difficult to know the level of control over the food system exercised by a small number of multinational corporations.
Moving towards digitalization of business
Researchers recently identified leading companies that control each of the 11 key sectors of industrial agriculture, including seed industries, materials Agricultural chemicals, animal genetics, artificial fertilizers, farm machinery, animal drugs and vaccines, commodity traders, food processors, large meat chains, food retailing and food delivery were examined and they focused on 3 important and multi-sector trends that the ability of Barons Food increases Big Ag along with Big Tech and Big Finance to maintain control over the industrial food chain.
The first is the digitization of the food and agriculture industry throughout the chain. The second is the increasing power of Asian food barons, especially Chinese. The third trend is the maximum trend towards horizontal integration, which is the concrete manifestation of the increasing participation of asset management companies in the food and agriculture sectors, which creates the appearance of competition but reduces real competition.
The big players in the industrial food chain are actively trying to first divert the public’s attention from their power grabs to dominate the markets. keep They do this by promoting a distorted picture of global food and agriculture systems. Food barons also design, introduce and promote a range of new technologies and “techno-business standards” to strengthen corporate control over food and agriculture. In official statistics, it appears that only 4 companies, known by their initials as the ABCD group, have historically influenced the supply and price of agricultural commodities and, not surprisingly, made large and increasing profits since the Covid-19 pandemic. have experienced.
In 2024, agri-food giants dominate the global food chain more than ever before. This creates a space for corporations to have “enormous influence over markets, agricultural research and policy development,” which undermines national food sovereignty.
Also, other powerful new companies have recently emerged, including China International Corporation (COFCO), which is second only to Cargill in terms of global market share. In terms of market power, China’s COFCO Group is the second largest agricultural commodity trader in the world after Cargill of the United States. Only 7 countries Argentina, Australia, Brazil, Canada, New Zealand, Thailand and the United States account for 55% of food exports in the world. As trade increases, global food and agricultural supply chains have become longer, more complex, and therefore more fragile.
The global food system has also become more financial, encouraging large investments in commodity markets when prices are high, exacerbating global food price volatility.
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Another consequence of increased global trade and concentration in food and agricultural inputs, combined with high agricultural subsidies in many high-income countries, is an increase in the number of countries It has been a net importer of food. Indeed, under agricultural trade liberalization laws, many low- and middle-income countries (LMICs) find themselves unable to compete with subsidized agriculture from the global north, which has led to a decline in domestic food production and an increase in food imports; In the last decade alone, the value of Africa’s food imports has tripled.
During the last 5 years, about 85% of the food consumed in Africa was imported, so the simple fact is that the world has a severely inefficient food system. This is not because there is not enough food being produced. Rather, the world is producing more food than ever before to keep up with the growing population. It is enough to pay attention to the fluctuations in the production of basic grains in the world.
“Financialization” of the industrial food chain
Wheat, corn and soybeans are 3 profitable agricultural raw materials that are traded worldwide and then There are sugar, palm oil and rice. Other basic commodities include poultry and livestock. In the past few years, the world has experienced a rise in food billionaires; Companies that take advantage of skyrocketing prices and make huge profits. Just like the energy sector, food companies have cashed in on the cost-of-living crisis that followed the tough times of the Covid-19 pandemic. But while companies like Shell and Exxon are almost household names in the world, the names of businesses involved in the food industry, Cargill and Walmart, are among others less well-known and their alliances and strategic alliances with each other are much less explored. ; Even the most recent mergers of large companies in the trading of agricultural commodities, seeds and agrochemicals are described by agricultural companies as a logical process of all kinds of business alliances, obscuring the fact that the newly merged companies are mainly owned by finance and investment companies. According to ETC Group, as of 2020, 3 of the world’s largest U.S.-based asset management firms collectively owned more than 25% of the shares of some of the largest agricultural products at any stage of production.
The shares held by these financial companies allow them to influence the decisions of agricultural companies, including mergers. to influence; For example, some companies have significant stakes in agricultural and seed companies, and food security is now dependent on complex international supply chains that are threatened by climate change, conflict, and geopolitical stressors.
It goes without saying that industrial agriculture used to be largely dominated by companies based in North America and Europe, and mainly focused on providing Market demand was concentrated in those areas. Over the past 25 years, as patents on top-selling agrochemicals began to expire, generic pesticide manufacturers, particularly in China and India, created large markets by producing cheaper formulations of off-patent products.
Today, with the explosive growth of general pesticide use, agriculture is even more exposed to toxic agrochemicals, especially in The global south has become dependent. Recent decades have seen a massive increase in land grabbing and venture capital speculation in food and agricultural assets around the world, with recent mergers in food industry giants exemplifying the “financialization” of the industrial food chain.
So far, several books about the financialization of the agricultural system and the industrial agricultural system and the food industry and the billionaires behind the largest Its companies have been written off, but a new book by Austin Frick, a former tax economist at the US Treasury Department and current member of Yale University’s Thurman Arnold Project, reveals the accumulated wealth of Big Ag’s most powerful families. He is an expert in agricultural policies with a focus on antitrust law. He served as co-chairman of the Committee on Agricultural Policy. InThe Barons, Frick directs his experience and knowledge towards the unbridled and exclusive wealth of the barons of the food industry.
According to him, companies in many parts of the industrial food chain and throughout it “oligopolies” It has continuously created and rampant industrial scale agriculture over the last 50 years means that the food we buy today; Surely it comes from barns full of live animals under the dust of the ventilators from the farm fields smeared with “Rundup”. While Frick details this “dystopian farming” horror show, his focus is elsewhere. He wants to expose the families and politicians who built this system.
Trade in agricultural products and playing politics
He shapes the story of the American food industry around a few families who use a government-sponsored industrial model. They make a living. Each chapter of his book reveals one family’s roots in business and the ways they play politics and deregulation to their advantage. Some of these surnames will be familiar, but most Barron families are hidden behind their brands. Some are involved in American politics. Dairy barons were among [Trump’s] early supporters; They gave him a lot of money.
In 2016, after the election of Donald Trump, Mike McCloskey was considered for the position of Secretary of Agriculture of the United States. but was not appointed to this position. The Waltons own the largest company in the food system in human history. This company has been heavily involved in political influence. In 2020, the company’s top executives admitted to bribing more than 1,900 Brazilian politicians to advance their business interests. The company was fined.
Barons products are sold under different brands and seem to keep up with the competition, even though many of them are sold by a The parent company is under the control of financial institutions. The success of JBS’s expansion, along with rampant consolidation in other areas of the meat industry, is at least partially responsible for the current situation.
Alternative protein market is currently defined by giant companies like the mentioned company, which both produce industrial meat and Both substitutes are combined to create a protein monopoly. Well-intentioned consumers of alternative proteins may not realize that they are buying from the same giant meat companies that run the largest factory farms, which contribute to deforestation and forced labor and slaughter millions of animals every day.
In the industry of producing agricultural chemicals and Seed
China is a leader in this sector on all fronts, and the Chinese government, in addition to being the world’s leading producer of pesticides It is patented and generic, a multinational ag input powerhouse (Syngenta) with a strong R&D presence worldwide.
In the commercial seed market, 10 companies about 25 Last year they had 40% of the global market, while today only two companies have 40% of the market share. With the commercialization of molecular biotechnologies since the 1990s, seed and crop businesses have become “inextricably linked”. Of course, big data also shows the expansion of this link.
For the past 40 years, the largest agrochemical companies have used intellectual property laws, mergers and new technologies to control the sector. They have used seeds. For example, through the mega-merger of SinoChem and ChemChina under the umbrella of the state-owned Syngenta group, just two companies now control 40 percent of the global seed market, compared to 25 years ago when Syngenta only controlled a quarter of the global agrochemical market. There is room for reflection.
When it comes to agricultural chemicals such as seeds, pesticides and fertilizers, China’s Syngenta Group, the largest The world’s agricultural chemicals have a quarter of the global market share.
Nowhere is market concentration more evident than in the food and energy sector. For example, in the United States, 4 companies control 55-85% of meat sales. 4 food merchants control 70% of the world’s grains and 6 oil giants dominate global energy production.
Trade in chemical fertilizers industry
Some key elements of production are in the hands of a few actors, and the world is in good faith to participate in food negotiations. They are related, because geopolitics can play an important role in this business. For example, Morocco has 72% of the world’s phosphate fertilizer reserves, some of which are located in the disputed territory of the Western Sahara. In addition, only 4 countries, Canada, Russia, Belarus and China, produce 80% of potash fertilizers in the world trade.
In the livestock and poultry genetics industry, only 3 companies control the vast majority of poultry genetics and this It is the most concentrated sector in the industrial food chain. The widespread adoption of industrial livestock genetics is the main driver of the loss of genetic diversity in farm animals worldwide.
In the machinery and drug and animal vaccination industries, with only 3 companies, the vast majority of poultry genetics We are facing that this sector is the most concentrated sector in the industrial food chain. US-based Deere, CNH and AGCO control 90 percent of high-horsepower tractor sales. Mahindra & Co., which is even more dominant in India, has 40 percent of the country’s agricultural equipment market. With the growth of digitalization, machinery companies are trying to sell new technologies (big data, precision agriculture, etc.) as the key to productivity.
In the agricultural equipment sector, which includes tractors, agricultural implements and machinery used for spraying chemicals. 6 companies have taken nearly 50% of the global market share. Within India, Mahindra has more than 40% of the domestic agricultural equipment market. Their control over the market continues to grow and its domestic sales in June 2021 have increased by 31% compared to the previous year.
India is attracting big technology players in agriculture. Recently, Amazon and Facebook have invested large stakes in Reliance/Jio. Major technology players that have great potential to create pervasive control systems in agriculture and shape farmer decisions and consumer choices throughout the chain. Basically, the digitalization of the food chain and technology has pushed the market towards large companies. They invest heavily in the digital ecosystem to expand their base. From 2022, several companies will use drone technology.
Tech giants, including Amazon, are increasing their monopoly control over intellectual property needed for agriculture. they give. Farmers will be increasingly pressured to become sub-contractors for corporations amid widespread de-skilling and loss of control over intellectual property, which is essentially common property and the result of thousands of years of decentralized agriculture.
Concluding remarks
Recently, Oxfam, one of the largest international aid organizations to eradicate poverty, hunger and injustice, consists of 15 organizations in 98 countries have published a report entitled “Making profit from pain”. According to this report, food billionaires have seen a 45% growth in their collective wealth in the last 5 years.
A total of £328 billion has been added to their profits over the past two years. In the same years, 62 new billionaires were also created by the creation of new food entities, as companies capitalized on the Covid pandemic and the growing crisis that forced many to cut living costs.
Currently the geographic center of power of the food barons is shifting to the East. In past decades, industrial agriculture was largely dominated by companies based in North America and Europe, and focused mainly on meeting market demand in those regions. Today, corporate actors in the Global South, especially China, Brazil and India, are changing the industrial food chain.
India has recently joined hands with the United States, UAE, etc. to create food parks. that use technology and big data. Indian officials claimed that this strategy would increase the income of Indian farmers.
Tech giants are becoming major players in the food sector as data, networks and artificial intelligence that support the digitized food chain. For example, it says Bayer’s Field View digital platform extracts 88 billion data points from 180 million hectares of agricultural land in 23 countries and transfers it to cloud servers and artificial intelligence from Microsoft and Amazon to create business strategies.
Researchers warn that new strategies to profit from climate crisis, pandemics and even conflicts like What is happening in Ukraine is preventing real competition and the emergence of an agricultural sector plagued by “extreme monopolies” where a handful of agri-food giants control global food markets. Since 2015, corporate takeover of UN policy spaces has been taking place institutionally across policy spaces, including through increased corporate influence on the UN, such as the UN Food Systems Summit (UNFSS) in 2021. Organized.
The old free-market strategy is now with increased lending for income transfer policies and subsidies, or for producers to buy Imported supplies or for the most vulnerable families to buy cheaper food is increasingly accompanied. This approach involves the poorest families in the business of hunger. The War on Hunger once again wants to fund agri-food companies to take a large portion of the profits from the food production and distribution process. It seems that with these events, a new concept of food security should be redefined in the scope of national governance.
