Corporations, like Monsanto, Bayer, Syngenta and others, have long been big players in the global food system. Their power and influence over various segments of the food chain is growing still, with fewer and fewer transnational businesses dominating larger and larger sections of the food chain. Over the last four decades, the commercial seed industry has undergone a drastic transformation. What was once a competitive sector of agribusiness, primarily composed of small family-owned businesses, has been transformed into a highly concentrated industry dominated by just a few transnational corporations. In particular, the agricultural inputs sector – focused on seeds but also agrochemicals and biotechnology – saw an acceleration of acquisitions and mergers amongst major corporations at breakneck speed.
In 1996, Monsanto executive Robert Fraley famously said, “What you’re seeing is not just a consolidation of seed companies, it’s a consolidation of the entire food chain.” This unprecedented concentration of power could have a devastating ripple effect across the entire food system – raising serious concerns about the future of food and farming.
Increasing corporate concentration
During the last 12 months, five out of the ‘Big Six’ agrochemical corporations (BASF, Bayer, Dow, DuPont, Monsanto, Syngenta) have conceded to mega-mergers that involve billions of dollars in value. After US giants Dow Chemical and Dupont announced their game-changing deal to form a $130 billion USD company, the state-owned China National Chemical Corporation (ChemChina) proceeded with its $42 billion USD purchase of Swiss chemical and seed company Syngenta. Soon after, Bayer, the German pharmaceutical and chemical giant, purchased US seed company Monsanto for $66 billion USD. Each deal is still subject to review in several countries by antitrust regulators to determine whether the mergers will lead to anti-competitive behaviour or abuses of market power (so far only the ChemChina merger has been approved by the US Committee on Foreign Investment). Should they be approved, just three companies will control 65% of the world’s pesticide sales and 61% of the world’s commercial seed sales – the biggest agribusiness oligopoly in history
Company executives have argued that by combining their companies’ expertise they can bring about powerful innovations that allow for greater efficiency in serving farmers and consumers. They also tout the economic gains they could bring to shareholders, as merging allows companies to reduce overhead costs and pool research investments. Counter to the corporate narrative, these mergers actually reflect a lack of product innovation and diversification, as sales of traditional products are floundering and jobs are being slashed to cut company costs.
The probability of these six already highly competitive and powerful companies consolidating into three monolithic mega-corporations has left many farmers, consumers and analysts uneasy. Consumer advocates argue the such mergers will “spell disaster for our food supply and farmers, ushering in a new era of sterile crops soaked in dangerous pesticides”. Farmers and corporate watchdogs worry that less competition in the marketplace will lead to increased prices and limited choices of farm inputs, whilst impeding efforts to invest in agroecological, resilient and productive farming methods. The more concentrated the power of agribusiness corporations, the more political and economic clout they have to skew trade agreements, farming policies and agricultural research in ways that favour the industrial farming model their products support, constricting the spread of more sustainable models.
With just a handful of corporations owning the world’s seeds, pesticides, biotechnologies and potentially, as analysts are predicting, farming technology and data industries, the fate of food and farming lies precariously in the hands of a few individuals. This kind of historically unprecedented power over global agriculture would enable them to do many things, including: controlling the research agenda for agriculture, shifting the focus to crops and hybrids more profitable to their companies; dictating trade agreements and agricultural policies that favour private business; positioning their technologies as the “technological-imperative” solution to increase crop yields, reduce global hunger and save the planet from climate change; influence government and regulatory bodies; and suppress competitive markets by pushing smaller companies out of business.
Under such a regime, the struggle for the soul and sustainability of agriculture becomes subverted by the massive economic and political power of industrial agriculture giants. These corporations have for decades been pushing a model of agriculture that has created superweeds, superbugs and probable cancer-causing pesticides, whilst eroding some 75% of plant genetic diversity, farmer livelihoods and traditional links between ecology and farming based on long established farming knowledge and resource-saving practices that preserve ecosystems. By pushing an agricultural model that requires the intensive use of energy, machinery and chemicals to grow cash-crop monocultures, these increasingly powerful corporations pose a threat to the development of a sustainable food system that supports rural economies and the environment.
Farmers and food sovereignty on the frontline
Through brute financial force, market manipulation and powerful lobbying influence, the soon to be ‘Big Three’ are likely to push the pesticide treadmill even faster to sell more and more of their products. Yet after several decades of selling farmers their pesticide packages, a plague of herbicide-resistant weeds has proliferated, affecting 88 crop species across 66 countries. Some 60 million acres of US cropland alone is infested. The corporate response has been to suggest farmers resort to older, more toxic weed-killers such as 2,4-D one of the herbicides used by the US military as part of its herbicidal warfare program during the Vietnam war.
Alongside this increased dependence on costly pesticides (and its consequential damage to the environment and public health), other issues farmers also face include limited access to non-GM seed varieties and regionally relevant crops as companies push their chemical-and-seed packages and ever-increasing seed prices. According to the ETC Group, from 1990-2010 seed prices in the US spiked higher than any other farm input, more than doubling relative to farmers’ crop incomes. Further, in the period between 2000 and 2008, the price of seeds and planting stock in the EU shot up by an average of 30%.
At the international level, such a high level of corporate concentration will inevitably bear an impact on both small-scale producers and global food security. According to a UN study, corporate concentration of the agricultural input market, “has far-reaching implications for global food security”. The study states that the privatisation and patenting of agricultural innovation (gene traits, transformation technologies and seed germplasm) has supplanted traditional agricultural understandings of seed practices and farmers’ rights, such as the right to save and replant seeds. In some jurisdictions, industry-promoted ‘seed laws’ that criminalise farmers from basic practices such as sharing native seeds, are slowly repositioning farmers from ‘seed owners’ to mere ‘licensees’ of a patented product.
The ‘silver-bullet’ technological solutions put forth by industry giants ultimately fail to address the socio-economic, political and trade factors that contribute to global hunger. They instead serve to depoliticise the issue by effectively redirecting the debate away from issues of power and control over agricultural knowledge and resources. This essentially manifests itself in reduced choices and options for farmers interested in obtaining seeds that are compatible with alternative agricultural practices and other sustainability goals.
The ‘culture’ of agriculture embedded in traditional ecological knowledge and practices will become further marginalised as dominant foreign institutions expand into native territories and impose a reordering of seeds and seed practices to suit their profit motive. In such an order, the carefully developed food systems, crop cultivars and accumulated knowledge of indigenous farmers that has evolved over thousands of years may not be passed on to the next generation. As many farmers have already experienced, their custodial link to seeds and seed practices may be lost to private interests and their control and choices over farming practices further diminished. The cultivation of food systems dedicated to nourishing communities and enriching ecosystems may be supplanted by a carefully constructed regulatory environment that privileges plant breeders and patent holders pushing commercial crop varieties.
By solidifying their control over the seed industry – a crucial position to have in future agricultural development, as it is the first link in the food chain – the Big Three will have unparalleled control over the entire system as a concentrated monopoly. Reflecting the public’s concern, nine environmental and corporate watchdog groups have submitted petitions signed by 700,000 people urging the Department of Justice and elected officials to block the pending mergers. US regulators must now seriously consider the question, “Should this kind of power be in the hands of so few?”
The future of food
The extreme corporate concentration at the top of the global food chain poses a serious threat to farmers, consumers and the environment alike. When any given sector is dominated by just a small number of companies, they not only have the power to dictate terms of business, but also to direct the course of agricultural development. These mega-mergers serve a narrow set of political and economic interests that ultimately constrain innovation, along with opportunities for small-scale farmers, choice for consumers and visions of an alternative, more sustainable, path for agriculture. It is clear that the industry is betting on a pesticide-soaked, genetically-engineered future. Action is urgently needed to regulate and monitor corporate power to ensure that food sovereignty, the environment and public health are not further compromised.
Photograph: Peter Blanchard
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