Global Food Cartel Fast Becoming the World's Supermarket

from Project Censored:


LEFT TURN, August/September 2003

Title: Concentration in the Agri-Food System

Author: Hilary Mertaugh


Over the last two decades, agribusiness and food retail mergers,

acquisitions, joint ventures, and informal contract agreements have

transformed the agri-food system into a powerful network of

transnational corporations that have the power to control the worlds

food supply at every stage of food productionfrom gene to market

shelf. By cooperating with one another rather than competing,

transnational corporations escape the scrutiny of federal anti-trust

regulators and manipulate the market through non-merger alliances.

In April 2002, the worlds two largest seed corporations, DuPont and

Monsanto announced that they would agree to swap their key patented

agricultural technologies and drop all outstanding patent lawsuits.


The flurry of mergers and acquisitions throughout the agri-food

system has created highly concentrated markets as agribusinesses

expand their dominance by diversifying their commodities. Cargill

is among the top five companies in the US market for flour milling,

grain and oilseed processing, salt production, corn and soybean

exports, turkey production and processing, pork processing, and

beer processing.


As fewer corporations control each stage of food production, farming

is becoming a kind of serfdom. Consolidation among suppliers and

processors leave farmers with few choices of who to buy from and

who to sell to. Dominant agribusinesses have the ability to drive

up the prices they charge for inputs while watering down the prices

they pay for outputs. Furthermore, the rise of patented seed varieties

places farmers in an even worse position, as agricultural biotech

companies gain ownership of the germplasm itself.


Consolidation in the food system is not limited to the production

and processing side. Consolidation activity among food retailers

has catalyzed a domino effect of mergers and acquisitions. ConAgra,

a company few Americans have heard of, is a major force in food

production in the US and has continued to aggressively acquire small

rivals while expanding its operation worldwide. It is estimated to

be the #3 seller of retail food products in the world. Although

consumers might be unfamiliar with the name ConAgra, they will

recognize some, if not all, of ConAgras popular brand names: Armour,

Butterball, Chef Boyardee, Healthy Choice, La Choy, Orville

Reddenbacher, Parkay and Hebrew National, just to name a few. ConAgra

is also known for a recall of 19 million pounds of tainted beef

after 47 people were sickened and one died from E. coli poisoning

in 2002.


The top five supermarket chains capture one half of all food sales

in the US, and it is widely predicted that there will soon be only

six major retail supermarkets selling the majority of the worlds

food. Because it is necessary for each and every one of us to eat

and drink, we will pay what it takes to make sure we do not go

hungry or thirsty. Although food may appear to be cheap with fewer

and fewer retailers, lack of competition will ultimately lead to

higher prices, lack of choice, and poorly paid employees. Wal-Mart

typically sells grocery products at prices 14% lower than competing

grocers, in part because the company is a non-union employer that

hires clerks at below-poverty wages.


Food corporations rely on the consumers lack of knowledge as to

where their food comes from, how it is produced, and who wins the

profits. The trend toward consolidation at every stage along the

food production chain has dramatically impacted the global economy

and distribution of income and wealth. Given the c omplexities of

the domestic policy-making and legislative processes, and the

numerous mergers, acquisitions, joint ventures and non-merger

mergers, it is not surprising that few people are aware of the

degree to which food companies influence food safety policies,

competition and decide where and how food is produced and how much

it will cost.


Prior to committing suicide as an act of political protest on

September 10, 2003 against the World Trade Organization in Cancun,

Mexico, Lee Kyung-Hae, a 56-year old farmer from South Korea

circulated the following statement. My warning goes to all citizens

that human beings are in an endangered situation in which uncontrolled

multinational corporations and a small number of big WTO official

members are leading undesirable globalization of inhumane,

environmentally degrading, farmer-killing and undemocratic policies.

It should be stopped immediately, otherwise the false logic of

neo-liberalism will perish the diversities of global agriculture

with disastrous consequences to all human beings.