New Internationalist

The Facts

Issue 108

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AGRIBUSINESS[image, unknown] The Facts

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The FACTS

Agribusiness

The term agribusiness is really a catch-all. It refers to the whole system of modern industrialized agriculture - growing crops and raising livestock is the central link in a long chain. The food business also includes farm financing, machinery, chemical, seed and feed at the 'input' end and processing, manufacturing and marketing of the food at the 'output' end.

In both Western countries and the Third World decisions about the kind of food grown, the way it is grown and who can afford to eat it are increasingly being made by large multinational corporations. Caught in a cost-price squeeze Western farmers have left the land in droves over the last 40 years while farm incomes stagnate and food prices soar.

In the developing world dependence on a handful of cash crops has increased, pushing small farmers off the land and decreasing the amount of food available for the hungry. Meanwhile multinationals have a strong hold on marketing the Third World's major income earners.

Here we look at the inside operations of the agribusiness machine.


Tea
85%

TEA
Percentage of world exports sold by multinational corporations:

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Dominant companies
Tea is less important than coffee or cocoa as a major income-earner for the developing world but critical for Sri Lanka, Kenya and Malawi.

Five European firms (Unilever, Brooke-Bond, Leibig, Cadbury-Schweppes, J. Lyons and Nestlé) and three American (Standard Brands, Kellogg and Cocoa-Cola) control 90 per cent of tea sold in the West. Corporations also moving into Third World markets. In India Brook-Bond, Liebig and Unilever control 95 per cent of packet tea sales.


85%
Coffee

COFFEE
Percentage of world exports sold by multinational corporations:

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Dominant companies
Coffee is a key foreign exchange earner in 24 developing countries including African states like Burundi, Rwanda, Uganda, Ivory Coast, Tanzania and Cameroon. It is also vital in all of Central America and Haiti.

The two largest companies in coffee, Nestlé and General Foods control an average 90 per cent of coffee sales in Europe and Japan.


70%

Bananas BANANAS
Percentage of world exports sold by multinational corporations:

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Dominant companies
Most of the world's bananas (80 per cent) are eaten where they are grown as a staple food. Nonetheless, bananas are one of the top five developing country exports.

Three US firms - United Brands, Castle and Cooke and Del Monte - control 61 per cent of the global banana trade. Four companies including Geest (UK) and Atlanta (West Germany) dominate the European market.

The three majors have nine plantations in Central America and the Philippines. And shipping and ripening and distribution outlets in North America, Europe and Japan.


60%

Sugar SUGAR
Percentage of world exports sold by Multinational corporations:

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Dominant companies
Sugar exports from the Third World have increased only marginally over the last 30 years with Western markets reaching the saturation level. Still, for at least nine Third World countries sugar is a major income earner.

Western companies have gradually shifted from production, but still dominate technology marketing and consumer sales. Tate and Lyle imports 95 per cent of all cane sugar into the EEC. Sweden and Belgium have single firm monopolies while two companies process 92 per cent of Canada's sugar and 85 per cent of France's.


IN THE WEST

... modern agriculture has brought dramatically increased yields but has also increased landlessness and hunger.

• In the US the number of family farms has dropped by 50 percent in the last 25 years. The top 5 per cent of landowners own half the nation’s farmland and the top 3 per cent of farms control 44 per cent of farm production.
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• In 1976, farmers made up just 4 per cent of Canada’s total population, a drop of nearly 70 percent in 45 years. During the same period (1921 -76) average farm size increased from 84 to 224 hectares.
• In Europe the number of farmers on the land varies from 12 per cent of the population in France to 2 per cent in the UK. In the EEC as a whole the number of workers in agriculture declined from 20 per cent in 1960 to 9 per cent in 1980.
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IN THE THIRD WORLD

...industrial agriculture has led to greater dependence on fewer farmers with larger farms.

• In Latin American where 8 per cent of the population owns 80 percent of the land production of subsistence food crops decreased by 10 per cent from 1964-74 while production of cash crops for export increased by 27 per cent
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• After Ralston Purina introduced soybeans in one area of Colombia for use as poultry feed, the number of large holdings increased by 12 per cent from 1960-71 while land held by small farmers decreased by 12 per cent
• Unilever, the world’s biggest food business, has 25 per cent of its employees in Africa. In 1978 the company’s turnover of $10 billion was greater than the combined GNP of 25 African countries.
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The Food Leaders

EATING ENERGY

Energy, mostly derived from petroleum, is a major ingredient in large-scale mechanized agriculture. It takes about 10 calories of energy to produce 1 calorie of food for consumption. If the whole world were to be fed using the US food system as a model, it would soak up 80 per cent of the world’s annual energy expenditure.
EATING ENERGY

Sources:
Transanational Corporations in Food and Beverage Processing UN 1981
Agribusiness in the Americas
Earth Resources Ltd.


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