Concentrate of Agro-Power
"Let’s see. I would like to have some packaged juice from Spain and sun-dried tomatoes from Italy. Humus from Greece is delicious and on top, a pinch of fresh herbs from here. But hey, they all have the same company label. How is this possible?!"
The agriculture market has opened up in ways that favour companies in a position to do business on a global scale. A strong push for free market policies has changed markets for farmers the world over. The trade market is ruled by those who have the power to affect price, to eliminate competition, and to set standards for an economic sector. Farmers are inherently disadvantaged on the world market: they are numerous, while processors are few (one mill can grind the wheat of many farmers); individual farmers’ production decisions have no effect on price and, as it is expensive to store harvested products, most producers try to sell their crops at the same time.
The emergence of private standards set by the industry, without governmental reference, has a profound impact on who can sell their produce where. If a product does not make it to the one supermarket shelf, or a processor’s factory, there are few other marketing options available to the seller. This is the market access that ultimately counts, whether in domestic or export markets. The fewer the companies in control of that access (whether commodity brokers, food processors or supermarkets), the fewer options producers have for where to sell their production.
Agro-business market power is not new. Take grain trading as an example; four of the current top five corporations dominated the market already 100 years ago (Cargill, Continental, Bunge and Louis Dreyfus). The concentration of power is most problematic in the seed market and the trade commodities (unprocessed materials) but in the past decade concentration has accelerated in other related sectors as well.
trade: the soy market is controlled by four companies; Cargill, ADM, Bunge and Louis Dreyfus together hold 80% of market share.
seed / GMOs: Monsanto alone provided seeds for 88% of the total area of GE crops planted worldwide in 2004. Monsanto controls 41% of the global market in commercial corn seed and 25% of the global soybean seed market. The growing importance of gene technology makes market power in this sector particularly worrysome. It is a sector where farmers used to be self-reliant (by for example saving seed and using crop rotation and manure from farm animals to maintain the health of the soil). When they have adopted industrial farming techniques, they are entirely dependent on buying all inputs; seed, pesticides and fertilizers from the market providers.
pesticides: In 2002, 10 companies controlled 80% of the global pesticide market, top 5 being Monsanto (US), Dupont (US), Syngenta (CH), Groupe Limagrain (F) and KWS AG (DE).
supermarkets: In 2004, Wal-Mart was estimated to have 6.1 percent of the global grocery market; almost three times as much as the nearest rival, French-owned Carrefour. The European situation makes it more obvious; in Germany, The Netherlands, UK and France between 42-56% of the market is dominated by a top 5 retailers.
meat / slaughter houses: Most meat producers still mainly operate on a national market but in the recent decade this is beginning to change in Europe. The US meat producer Smithfield is rapidly entering the European market.
animal feed: Globally, the concentration in the animal feed market isn't that extreme yet. On a national or regional level though, a few companies are dominating. In the Benelux countries, for example, there are only six players accounting for 48% of all feed production.
It is possible to find local farmer cooperatives and independent food producers, though it’s a struggle for them to stay on the market. Consumers can show disapproval of the concentration-to-no-choice by shifting to these local, independent initiatives.
source: 'Market Power and Agricultural Trade' 2006, Sophia Murphy, www.tradeobservatory.org/library.cfm?refid=89014
