
	by Sarah Morrison 
	24 February 2013
	
	from
	
	TheIndependent Website 
	
 
	
	 
	
	 
	
	Small Producers Face Poverty 
	
	as Ever More Commodities are Controlled
	
	
	by A Coterie of Multinationals
 
	
	 
	
	 
	
	As you sip your morning coffee or tea, 
	accompanied perhaps by a chocolate biscuit, or a banana for the more 
	health-conscious, think hard about where your breakfast comes from. 
	
	 
	
	Increasingly, a handful of multinationals are 
	tightening their grip on the commodity markets, with potentially dramatic 
	effects for consumers and food producers alike.
	
	The livelihoods of millions of smallholders who produce the drinks and 
	snacks we consume every day are "seriously under threat", warns a report to 
	be published tomorrow to mark the start of Fairtraide Fortnight. 
	
	 
	
	Extreme price volatility, high food prices and 
	more concentrated food markets threaten to leave farmers "condemned to 
	poverty".
	
	Three companies now account for more than 40 per cent of global coffee 
	sales, eight companies control the supply of cocoa and chocolate, seven 
	control 85 per cent of tea production, five account for 75 per cent of the 
	world banana trade, and the largest six sugar traders account for about 
	two-thirds of world trade, according to the new publication from the 
	Fairtrade Foundation.
	
	Such tight control of the markets by multinationals - which can use their 
	"buyer power" to dictate how the supply chain is run - can leave 
	smallholders "marginalized", surviving on precarious contracts, poverty 
	wages, and with poor health and safety practices, the report warns. 
	
	 
	
	It stresses that, with the G8 summit to be held 
	in Northern Ireland in June, this is the year "to put the politics of food 
	on the public agenda and find better solutions to the insanity of our broken 
	food system".
	
	More people may be shopping ethically - sales of Fairtrade cocoa grew by 
	more than 20 per cent last year to £153m - but, according to the report, the 
	world's food system is "dangerously out of control". Cocoa growers now 
	receive 3.5 to 6 per cent of the average retail value of a chocolate bar; in 
	the 1980s they got 18 per cent.
	
	The report is being published to coincide with the launch of a three-year 
	food campaign by the Fairtrade Foundation, to,
	
		
		"pull our broken food system back from the 
		brink and make it work for all". 
	
	
	Its recommendations include asking governments 
	to ensure greater transparency and "fair competition" in international 
	supply chains.
	
	Michael Gidney, chief executive of the Fairtrade Foundation, said:
	
	
		
		"Putting too much power into the hands of 
		too few companies increases the risk of exploitation in food supply 
		chains, where producers have no choice but to sell for low prices, while 
		consumers face a bewildering array of products on shop shelves even 
		though their purchases benefit only a small number of brands.
		
		"Unless we do something now, millions of small farmers are condemned to 
		poverty. If they are in crisis, and farmers see no future in farming, 
		then many of our foods could be at risk."
	
	
	About 500 million smallholders produce 70 per 
	cent of the world's food, but make up half the world's hungry. Women at are 
	the helm - producing 60 to 80 per cent of the food in developing countries 
	and acting as the main producers.
	
		
		'Last year I got $2.20 per pound, this year 
		$1.40'
	
	
	Gerardo Arias Camacho, 43, a coffee 
	farmer from Costa Rica, has been producing coffee since he was taken out of 
	school to help his father at the age of 10.
	
	 
	
	 
	
	
	
	 
	
	 
	
	He works 13 hours a day to 
	produce coffee from five hectares. 
	
	 
	
	Mr Camacho, a board member of the first 
	Fairtrade-certified co-op in his country, said this year he might struggle 
	to profit at all from some of the coffee he sells.
	
		
		"About 40 per cent of our coffee is sold to 
		multinationals, but the problem with the free market is there is no 
		minimum price. Last year, I got $2.20 per pound of coffee; this year 
		it's about $1.40. This is really bad for us, as the cost of producing is 
		about $1.60.
		
		"They really don't care about what problems we have here in our village; 
		we worry about having enough food, clothes, and enough money to send our 
		kids to school. Small roasting companies have direct relations with us, 
		know our needs and understand us. This makes a big difference."
	
	
	
	
 
	
	 
	
	 
	
	 
	
	 
	
	 
	
	
	
	 
	
	 
	
	 
	
	
	
	Giant Multi-Nationals
	
	...to 
	Dominate Food Production 
	by Mike Stones
 
	
	from
	
	FoodManufacture Website
 
	
	 
	
	 
	
	 
	
	 
	
	
	
	Part 1
	
	09 January 2012
	
	 
	
		
			
				
					
					The balance of power in global 
					food production is shifting away from national governments 
					to multi-national firms and from western economies to 
					emerging nations, warns a new report from SAC’s Rural Policy 
					Centre. 
					 
					
					In the first of a two-part 
					series, we focus on the growing power of trans-national
 
				
			
		
	
	
	
	
	The balance of food 
	production power 
	
	is shifting from governments 
	to trans national corporations
	
	 
	
		
			
			
			“Consolidation of TNCs has seen some shifting of the focus of power 
			from governments and supra-national bodies towards corporate 
			business,” according to the report Power in Agriculture.
		
	
	
	 
	
	In parallel, state intervention in agriculture 
	and the supply chain, particularly in the EU, is diminishing.
	
	
	Speaking at the Oxford Farming Conference, whose organizers commissioned the 
	report, one of its authors Dr Alan Renwick, said: 
	
		
		“TNCs are becoming increasingly dominant in 
		all aspects of the supply chain.” 
	
	
	For example, four firms control more than 75% to 
	90% of the international grain trade.
	
	
	Also, just 10 firms are responsible for 40% of the global retail market.
	
	 
	
	 
	
	 
	
	
	Annual turnover
	
	
	Top TNC, ranked by annual turnover, was identified as the Swiss-based firm 
	Nestlé with a turnover of more than $112bn.
	
	
	Archer-Daniels-Midland (ADM) and Unilever were ranked second and third with 
	annual sales of $62bn and $59bn respectively. Total revenue from the global 
	food products industry, consisting of agricultural products and packaged 
	foods, was estimated at $3.2 trillion in 2008.
	
	
	Responding to the report, Caroline Spelman, secretary of state for 
	the Department for Environment, Food and Rural Affairs, acknowledged that 
	the UK is home to,
	
		
		“some of the world’s most successful and 
		influential agri-food corporations.
		 
		
		I’m thinking of Unilever, Tesco and 
		Associated British Foods. The UK government understands the power of 
		these organizations and how vital they are in building a sustainable 
		food system and a green and growing global economy.”
	
	
	Spelman added that the government understands 
	its role in ensuring that corporations use their power positively.
	
		
		 “We’re taking steps, including the 
		introduction of a groceries code adjudicator, to safeguard it."
		 
		
		“We also know that these corporations 
		provide the bridgehead to emerging economies for our [food] and farming 
		industry.” 
	
	
	But not all speakers shared her view of the 
	benign impact of TNCs. 
	
	 
	
	Andrew Blenkiron, estate director of 
	large-scale food producer Euston Estates, warned of the near unfettered 
	power that TNCs now wield.
	
		
		“The influence of TNCs is hyper political 
		with many having a turnover many times the GDP [gross domestic product] 
		of numerous small nations… They probably make even more from the greed 
		that is ‘the market trader". 
		
		
		“No longer is the true supply and demand equation relevant; trade is 
		rampant on rumour and conjecture. There is no doubt that volatility in 
		the food supply chain has served to further increase TNC’s influence and 
		power.”
	
	
	Tony Hehir, Australian organic dairy 
	farmer, warned that his country’s grains, pork and tomato industries are 
	already dominated by TNCs. 
	
	 
	
	 
	
	 
	
	
	Without consequence
	
		
		"TNCs are now firmly entrenched in the 
		grains industry. Grain farmers are now disadvantaged by delivery 
		contracts with penalties for non compliance by the producer, yet 
		absolute discretion without consequence for the TNC buyer.
		
		
		Power has shifted very rapidly from the producer since the advent of TNC 
		domination of this industry.”
	
	
	
 
	
	 
	
	 
	
	 
	
	 
	
	 
	
	 
	
	
	
	Part 2
	
	Food Production Power to Shift East
	10 January 2012
 
	
		
			
				
					
						
						The EU could lose out as the 
						power in global agricultural production increasingly 
						shifts east, according to a new report from the SAC’s 
						(Scottish Agricultural Centre's) Rural Policy Centre.
						
						 
						
						In the second of our 
						two-part series, we examine the growing dominance of 
						Brazil, Russia, India and China (BRIC nations).
 
					
				
			
		
	
	
	
	
	The balance of power in 
	global farm production 
	
	will gradually shift east
	
	 
	
	 
	
	
	While North America and EU countries currently dominate food production, 
	power will shift to BRIC nations, warns the report, titled Power in 
	Agriculture. 
	
		
		“The EU has retreated from world markets as 
		policies have changed [from boosting production to environmental 
		management]. 
		
		
		“The export capabilities of the EU in some key commodity sectors are 
		predicted to decline further in the next 10 years unless policy 
		conditions change markedly,” warns the report.
	
	
	
 
	
	 
	
	Increasing pressure
	
	
	In the coming decades, EU countries will face increasing pressure to allow 
	greater access to their markets. 
	
		
		“This competition is likely to come from 
		emerging nations - like China, India and Brazil - and will have 
		implications for producers,” said the report.
	
	
	Two factors are likely to speed the process.
	
	
		
			- 
			
			First, the opening up of agricultural 
			markets through a gradual process of trade liberalization and 
			deregulation.  
- 
			
			Second, the increasing globalization and 
			concentration of the agricultural supply trade. 
	
	Moreover, some emerging nations have a strategic 
	advantage in possessing key natural resources.
	
		
		“Our analysis shows a potentially grim 
		picture for many of today’s powerful agricultural economies, including 
		the US and Europe.
		
		
		“In particular, European countries - including the UK - appear to be 
		relatively poorly endowed in global terms with critical natural 
		resources used in agriculture - such as land, water, potassium, 
		phosphate, oil and natural gas,” according to the report.
	
	
	Climate change is expected to exacerbate some of 
	these changes.
	
	
	Many emerging nations, such as Brazil, China and Russia, are better placed 
	in terms of water and energy endowments but are vulnerable in terms of their 
	possession of arable lands. 
	
	 
	
	This accounts for some large economies, 
	particularly China, resorting to what the authors term ‘land-grabbing’ in 
	Asia. 
	
	
	
	
	Unlikely to be 
	sustainable
	
	
	The report’s authors draw three main conclusions:
	
		
			- 
			
			EU countries will face competition for 
			land from countries such as China. 
- 
			
			Water-, energy- and fertilizer-intensive 
			agricultural production systems are unlikely to be sustainable in 
			the near future. 
- 
			
			EU countries need to balance their 
			general level of agricultural efficiency - particularly in water 
			use. 
	
	Speaking at the Oxford Farming Conference, 
	Caroline Spelman, secretary of state for the Department for 
	Environment, Food and Rural Affairs, said: 
	
		
		“I read this as a call to the EU farming 
		industry to become competitive - and grasp the many opportunities of 
		globalization and the need for sustainability.”
	
	
	Terry Hehir, Australian organic dairy 
	farmer, warned the conference that: 
	
		
		“Land [in Australia] is already being 
		procured in vast amounts by foreign countries to secure future food 
		supplies.”
	
	
	The Qatar government has already bought 
	170,000ha of Australian farmland, he added. It plans further investment to 
	supply up to 35% of Qatar’s food supply from these farms. 
	
	
	Meanwhile, Brazilian agricultural exports soared by 24% last year to reach 
	$94.6bn compared with the previous year. Agriculture minister Jorge 
	Ribeiro has identified a target of $100bn for this year.
	
	
	The biggest importer of Brazilian food was China, which accounted for 
	$16.5bn of purchases.
	
	
	
	
	 
	
	 
	
	 
	
	
	
 
	
	 
	
	
	
	
	 
	
	
	
	
	The Global Food Crisis
	
	-   ABCD of Food or How The Multinationals 
	Dominate Trade   -
	by Felicity Lawrence 
	2 June 2011
	
	from
	
	TheGuardian Website
	
	
	
	
	Wherever you live, 
	
	you can't avoid the four global giants
 
	
	
 
	
	
	
	Wheat stands in a field in 
	Brazil waiting to be harvested. 
	
	Photograph: Adriano 
	Machado/Bloomberg via Getty Images
	
	 
	
	 
	
	By mid-morning snack you will certainly have 
	encountered their products several times already wherever you are in the 
	world, whether it is the corn in your flakes, the wheat in your bread, the 
	orange in your juice, the sugar in your jam, the chocolate on your biscuit, 
	the coffee in your cup. 
	
	 
	
	By the end of the day, if you've eaten beef, 
	chicken or pork, consumed anything containing salt, gums, starches, gluten, 
	sweeteners, or fats, or bought a ready meal or a takeaway, they will have 
	shaped your consumption even further.
	
	And yet, the four giant transnationals that dominate the raw 
	materials of the global food system have largely stayed below the radar of 
	European consumers. 
	
	 
	
	Known as the 'ABCD Group' for the alphabetic 
	convenience of their initials, 
	
		
	
	
	...account for between 75% and 90% of the global 
	grain trade, according to estimates. 
	
	 
	
	Figures cannot be given with confidence, 
	however, because two of the companies are privately owned and do not give 
	out market shares.
	
	This extraordinary concentration of power and money in the global food trade 
	has been identified by Oxfam in a new report this week as one of the 
	structural flaws of the system. At each stage a handful of players dominate, 
	not just in primary agriculture but in food manufacturing and retailing.
	
	
	 
	
	The result, according to Oxfam, is that,
	
		
		"they extract much of the value along the 
		chain, while costs and risks cascade down on to the weakest 
		participants, generally the farmers and labourers at the bottom".
	
	
	Oxfam is the latest in a long line of critics to 
	highlight this corporate concentration as a root cause of hunger and 
	poverty. 
	
	 
	
	The ABCD group have said they welcome informed 
	debate but that, as far as they are concerned, their operations are the 
	vital waters that keep food and its finance flowing from those who can grow 
	it to those who need to consume it. Scale enables them to be highly 
	efficient. 
	
	 
	
	The grain trade is capital intensive; they 
	invest heavily in storage facilities and port and transport infrastructure.
 
	
		
			- 
			
			US-based
			
			Cargill with the highest revenues, 
			is the largest private company in the world - and famous for its 
			secrecy. Its headquarters is a mock-Tudor meets mock-French chateau 
			in Minnetonka in the US mid-west, where the company was founded by a 
			family of grain traders in 1865.    
			Today, it is still majority-owned by 
			descendents of the family. Its main commodity trading operation is 
			run out of the tax haven of Switzerland. Its sales were $108bn in 
			2010, and $115bn in 2009, and its net earnings were nearly $6bn for 
			those two years.
 
 As well as being a leading player in the trading, processing and 
			transporting of the most important agricultural commodities, 
			fertilizer and meats, it is one of the world largest hedge funds.
   
			When Gordon Brown, as prime 
			minister, called a summit in London on the 2008 food crisis, Cargill 
			was invited.    
			When Walker crisps had an image problem 
			with the saturated fats in its crisps, Cargill came to the rescue, 
			having a large acreage of land in eastern Europe planted with a new 
			variety of "Sunseed".
 
 It produces about half of all McDonald's chicken products across 
			Europe. It sells fats to Unilever.
   
			When the US needed to appoint someone to 
			lead the reconstruction of agriculture in Iraq, it turned to former 
			Cargill executive Dan Amstutz. In China, where it has a joint 
			venture with
			
			Monsanto, to whom it sold its 
			enormous seeds interests a decade ago, it has trained over 2 million 
			farmers in the American way of agriculture.
 
 Over that same decade, Cargill, ADM and Bunge are thought to have 
			acquired about 80% of China's soya processing capacity. More 
			recently, Cargill has been moving up the food chain into high-value, 
			hi-tech additives and what it calls food solutions for the 
			manufacturing industry.
 
 
 
- 
			
			
			
			Louis Dreyfus, established in 1851, 
			is also private and still family owned, headquartered in Paris but 
			again trading largely out of Switzerland.    
			It gives no figures and never comments 
			to the media, but its estimated revenues in 2009 were £34bn. It has 
			enormous grain, sugar and energy trading interests around the world, 
			although in recent years it has concentrated on financial aspects of 
			commodity trading.
 
 
 
- 
			
			
			
			Bunge, which expanded through the 
			late 19th century as a grain trader in South America, is 
			now incorporated in the tax haven of Bermuda but its headquarters 
			are in the US. Its net revenues in 2010 were $47bn, and net earnings 
			were $2.3bn. It is a leading processor of oilseeds, and producer and 
			trader of grains, sugar and bioenergy. It is also a key player in 
			the global fertilizer market.
 
 
 
- 
			
			
			
			ADM, or Archer Daniels Midland, is 
			incorporated in the US tax-haven state of Delaware and headquartered 
			in Illinois. Its revenues in 2010 were $62bn and its earnings were 
			$1.9bn.
 
 ADM's origins go back to a US seed crushing business begun in 1902.
   
			Today, it has vast interests in trading, 
			processing and transporting soya and other oilseeds, and corn, wheat 
			cocoa and other agricultural commodities. It is a leading 
			manufacturer of oils, corn sweeteners, flour, biofuels, food 
			additives from gums to gluten, soya isolates and animal feed 
			ingredients. 
	
	
	To add to the concentration, Cargill, ADM, and Bunge have strategic 
	alliances and joint ventures with the seed and agrochemical companies that 
	dominate the agricultural inputs part of the global food system.
	
	 
	
	In seeds four firms, 
	
		
			- 
			
			Monsanto (incorporated in Delaware, HQ 
			in Missouri) 
- 
			
			Dupont (incorporated and HQ in Delaware) 
- 
			
			Syngenta (incorporated and HQ in 
			Switzerland)  
- 
			
			Limagrain, a French-based international 
			co-operative,  
	
	...account for over 50% of global seed sales.
	
	In agrochemicals six firms, 
	
		
			- 
			
			DuPont 
- 
			
			Monsanto 
- 
			
			Syngenta 
- 
			
			Dow (incorporated in Delaware, HQ in 
			Michigan) 
- 
			
			German chemical giants Bayer and BASF,
			 
	
	...control 75% of the market.