Handful of agrifood giants control global food markets, warns report

Food barons report finds China, India & Brazil are reordering global food chain; but retaining global North's extractive models

By Nandita Banerji
Published: Wednesday 28 September 2022
Food barons made the most of the converging crises in 2020 in order to tighten their grip on industrial food chain, the report said. Photo: Wikimedia Commons

A handful of dominant firms control the ‘top-heavy’ agrifood sector, enabling these companies to wield enormous influence over markets, agricultural research and policy development, according to a recent report. Just four to six dominant firms control the entire sector globally. 

The analysis offered a snapshot of the world’s food barons — the biggest players up and down the industrial food and agriculture chain based on 2020 sales figures. 

This oligopoly undermines food sovereignty, said Food Barons 2022: Crisis Profiteering, Digitalization and Shifting Power, by a non-governmental organisation ETC Group. The group researches and analyses technological information.

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Corporate players in the global South, especially China, Brazil and India, are reordering the industrial food chain, the report found. However, these countries are adopting the same extractive model as their Northern counterparts, it said. 

The year 2020 was a horrific year for food security and health — but a bonanza for Big Food and Big Agriculture, the report found. Together, the leading global food and agriculture commodity traders piled up more than one-half trillion dollars in 2020 revenues. 

Global trade in all agricultural products reached an estimated $1.33 trillion in 2019. The top ten agricultural commodity traders account for at least 40 per cent of the global market. 

The group examined the leading corporations that control each of 11 key industrial agrifood sectors: Seeds, agrochemicals, livestock genetics, synthetic fertilisers, farm machinery, animal pharmaceuticals, commodity traders, food processors, Big Meat, grocery retail and food delivery. 

The report said: 

We also bring attention to three critical, multi-sectoral trends that increase the ability of the food barons — Big Ag, together with Big Tech and Big Finance — to maintain control over the industrial food chain.

The first of these is the digitisation of food and agriculture across the chain. The second is the rising power of Asian, especially Chinese, food barons. The third is horizontal integration, including the increasing involvement of asset management companies in food and agriculture sectors — which creates the semblance of competition but diminishes actual competition, according to the report. 

The industrial food chain’s big players actively work to deflect attention from their power grabs to sustain their market dominance. They do this by promoting a distorted picture of global food and agricultural systems, highlighted the report. 

The food barons are also introducing a suite of new technologies and “techno-fixes” that are conceived and designed to entrench corporate control over food and agriculture even further, it added. 

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Industrial agriculture was earlier overwhelmingly dominated by corporations based in North America and Europe and focused primarily on meeting market demand in those regions. 

Over the past 25 years, as patents on blockbuster agrochemicals began to expire, generic pesticide manufacturers, especially in China and India, have created huge markets by churning out cheaper formulations of post-patent products.

With the explosive growth of generic pesticides, agriculture has become even more dependent on toxic agrochemicals, especially in the global South, the analysis said.  

Recent decades have seen a massive increase in land grabbing and venture capital speculation in food and agriculture assets worldwide, with the latter trend exemplifying the “financialisation” of the industrial food chain.

In this way the driving purpose of food systems moves ever further away from feeding people to feeding profits, the report highlighted. 

The report also brought up horizontal shareholding — the practice of owning assets in multiple corporations that are supposed to be competing with each other but are unlikely to compete if they have common owners. 

A small number of giant investor firms, often asset managers, hold significant horizontal shareholdings — in and across many sectors of the industrial food chain, creating interlocking oligopolies, the analysis said. 

Many of the food barons are relatively unknown because they are privately held or state-owned companies. The lack of transparency means that, in the absence of regulatory oversight, we can’t fully track assets or determine corporate market share, the ETC group said.

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As corporate concentration increases, companies are becoming more guarded with their information. In a world where market intelligence is proprietary, it is becoming much more difficult to know the level of food-system control exercised by a handful of multinational enterprises, the report further said. 

The report pointed out the failure of policymakers and antitrust regulators in developing tools or teeth to clamp down on 21st-century oligopoly power. It also noted the importance of market intelligence information for democracy. 

“We need to support and collaborate to expand the peasant food web, both to nourish the world and to mount an effective challenge, returning power (and food) to peasants, rural and urban communities,” it said.

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