Free trade leaves world food in grip of global giants

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http://www.guardian.co.uk/globalisation/story/0,7369,1399480,00.html

 

 

Free trade leaves world food in grip of global giants

 

 

 

 

John Vidal in Porto Alegre

Thursday January 27, 2005

The Guardian

 

Global food companies are aggravating poverty in developing countries

by dominating markets, buying up seed firms and forcing down prices

for staple goods including tea, coffee, milk, bananas and wheat,

according to a report to be launched today.

 

As 50,000 people marched through Porto Alegre, in southern Brazil, to

mark the opening of the annual World Social Forum on developing

country issues, the report from ActionAid was set to highlight how

power in the world food industry has become concentrated in a few hands.

 

The report will say that 30 companies now account for a third of the

world's processed food; five companies control 75% of the

international grain trade; and six companies manage 75% of the global

pesticide market.

 

It finds that two companies dominate sales of half the world's

bananas, three trade 85% of the world's tea, and one, Wal-mart, now

controls 40% of Mexico's retail food sector. It also found that

Monsanto controls 91% of the global GM seed market.

 

Household names including Nestlé, Monsanto, Unilever, Tesco, Wal-mart,

Bayer and Cargill are all said to have expanded hugely in size, power

and influence in the past decade directly because of the trade

liberalisation policies being advanced by the US, Britain and other G8

countries whose leaders are meeting this week in Davos.

 

" A wave of mergers and business alliances has concentrated market

power in very few hands, " the report says.

 

It accuses the companies of shutting local companies out of the

market, driving down prices, setting international and domestic trade

rules to suit themselves, imposing tough standards that poor farmers

cannot meet, and charging consumers more.

 

The report says the 85% of all the recent fines imposed on global

cartels were paid by agrifood companies, with three of them forced to

pay out $500m (£266m) to settle price-fixing lawsuits.

 

" It is a dangerous situation when so few companies control so many

lives, " said John Samuel of ActionAid yesterday.

 

The ActionAid report argues that many food behemoths are wealthier

than the countries in which they do their business. Nestlé, it says,

recorded profits greater than Ghana's GDP in 2002, Unilever profits

were a third larger than the national income of Mozambique and

Wal-mart profits are bigger than the economies of both countries combined.

 

The companies are also said to be taking advantage of the collapse in

farm prices. Prices for coffee, cocoa, rice, palm oil and sugar have

fallen by more than 50% in the past 20 years.

 

The report feeds into growing calls at Porto Alegre for the regulation

of multinational food companies. A coalition of the largest

international environmental, trade and human rights groups, including

Greenpeace, Friends of the Earth, Amnesty, Via Campesina and Focus on

the Global South, yesterday said they would be working together to

press for corporate accountability.

 

Retailers such as Tesco, Ahold, Carrefour and Metro are buying

increasing volumes of fruit, vegetables, meat and dairy products in

developing countries, but their exacting food safety and environmental

standards are driving small farmers out of business, says ActionAid.

 

A spokeswoman for the Food and Drink Federation, which represents

British food businesses, yesterday recognised that the industry's

success " is closely linked to those at the beginning of the food

supply chain " .

 

But she added: " Britain, the world's fourth largest food importing

country, invests heavily and provides an enormous market for

developing world farmers. "

 

 

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Explained

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Background and resources

31.10.2002: What is globalisation?

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31.10.2002: Globalisation: world-changing or word-changing?

 

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