Socialist Worker

Corporations that control world's food

by Charlie Kimber
Issue No. 1812

EVERY DAY 25,000 people die directly from starvation. Many thousands more die from diseases because their bodies are weakened by malnutrition. The multinationals and bankers wreck the economies of countries in Africa and Asia where those people starve. But there are firms which are also directly responsible for who lives and who dies, who eats and who wastes away.

As in every sphere, a handful of corporations dominate the world food market. What should be a basic human right has been turned into a source of fabulous profit for a few. The blizzard of brand names hides the truth about who controls food. Few people know that one of the world's biggest food firms is a tobacco company (Philip Morris) that makes vast profits from spreading its killer drug across the globe.

Just two companies (Cargill and Archer Daniels Midland) control three quarters of the world's grain trade. Four huge multinational corporations (Philip Morris, Nestlé, Procter & Gamble, and Sara Lee) control 70 percent of the world's coffee market. Only three companies (Cargill, ADM and Philip Morris) account for over 80 percent of the world cocoa trade.

Five agribusinesses (Astra-Zeneca, DuPont, Monsanto, Novartis and Aventis) account for nearly two thirds of the global pesticide market, almost one quarter of the global seed market and virtually all of the genetically modified seed. These are the top ten firms that preside over a world where 850 million are malnourished and others are obese through eating unhealthy food.

CARGILL and ARCHER DANIELS MIDLAND (ADM) control the world's grain trade and much more. They show exactly how food multinationals operate. They, not our governments, decide the price of staple foods. It is these corporations that decide who will live and who will starve. If you log on to the website www.e-adm.com you can see the prices of a vast array of agricultural products which are being traded-including pork bellies, soya beans, rough rice, cocoa, cotton, oats, wheat and others. There are fortunes to be made from starvation.

The price of corn (maize) soared by nearly 20 percent between March and July this year. That global price movement is more sharp in the famine belt of Southern Africa where desperate people will pay an even higher price. As the 'corn futures index' ticks higher, grain traders pocket a big profit. In the barren fields of Malawi or Zimbabwe people who have never heard of Cargill or ADM watch their children's lives ebb away. There is food available, but they can't afford it.

In 1996 drought and disease hit the US wheat crop hard. Cargill (and Continental Grain, which Cargill has since bought) bought wheat at $60 to $100 a tonne from India and sold it at $230 to $240 a tonne on the international market. The export created shortages within India and several million tonnes then had to be reimported by the Indian government at the world market price. Both Cargill and ADM are linked to the US state. They get huge subsidies and can rely on the US military to protect their interests across the globe. At the recent World Food Summit in Rome the US delegation stood alone among 182 nations in opposing the statement that food was a right.

Bush's representatives pressured other countries to back an even greater role for the private sector, trade liberalisation and obedience to the World Trade Organisation. In return for that sort of support Western governments can rely on the big firms using food as a political weapon. Grain shipments to Sudan were suspended during the Gulf War in 1991 because that country's government had failed to declare itself against Iraq.

Cargill has had its man in the White House in every generation. In the 1970s William Pearce left Cargill and became President Nixon's deputy special representative for trade negotiations. He helped draft key documents about farming, food and international trade. He then rejoined Cargill. In the 1980s Daniel Amstutz moved from being in charge of feed grains for Cargill to become under-secretary of agriculture for international affairs.

Former Cargill chairman Ernest Micek was on Bill Clinton's export council. He was one of three top businessmen who accompanied Clinton on his tour of Africa. Cargill and ADM talk publicly about 'enterprise'. But ADM chief executive Dwayne Andreas once boasted, 'There isn't one grain of anything that is sold in the free market. Not one! The only place you see a free market is in the speeches of politicians.'

Andreas's right hand man, James Randall, added, 'We have a saying in our company: 'Our competitors are our friends, our customers are the enemy'.' In 1996 ADM executives admitted they met with executives from other grain dealers to fix prices, eliminate competition and allocate sales between firms. They knew this was illegal, so publicly they said the meetings were about issues such as environmental protection.

Cargill's commodity trading arm, Tradax International, is based in Panama, a tax haven. Cargill is a 'private company' (not listed on the stock exchange). It therefore does not have to declare any financial information. Its profits are believed to be around $3 billion a year.

ADM reported last month that its sales during the last year were worth over $23 billion and annual profit had broken through the $1 billion barrier.

NESTLÉ (expected profit for this year $5 billion) is perhaps the world's largest food company. It is dominant in chocolate and coffee markets. Its brands include Kit Kat, Nescafé, Buitoni, Crosse & Blackwell, Shreddies, Carnation, Vittel, Perrier, Cheerios and Polo.

The company has been a target for protests over its aggressive marketing of powdered baby milk in parts of the world where there is no safe water. Nestlé was one of several multinational chocolate producers that said recently it was 'shocked' by evidence of child slavery on cocoa plantations in West Africa.

The giant firms' stranglehold on raw material prices intensifies the pressures that lead to child slavery. Cocoa prices dropped to a 30-year low last year so unpaid labour is tempting to local producers.

PHILIP MORRIS (expected profit $10 billion), the tobacco giant, owns General Foods and Kraft. Kraft is the largest US food producer with brands such as Maxwell House coffee, Toblerone chocolate, Philadelphia cheese, Cracker Barrel cheese, Lowenbrau, Miller beers, Jell-O, Kool-Aid and hundreds of others. Philip Morris uses the power it gains from its food business to pressure governments into holding back on anti-tobacco laws.

Around four million people die every year from tobacco-related illnesses. In 30 years time that figure is expected to rise to ten million.

UNILEVER (expected profit $4 billion) sells food and other products in 150 countries under brand names such as Brooke Bond, Calvin Klein fragrances, Bestfoods, Birds Eye, Persil, Omo, Knorr, Hellmann's, Dove, Ben & Jerry's, Lipton, Slim Fast and Levers.

It is the world's largest tea firm and fights to keep raw material prices low. In the mid-1980s, when tea prices began to edge up, Unilever and other big firms organised a temporary boycott of Indian tea to force prices down again. Unilever's history is entangled with the power of imperialism. Protected by the British state, it was the dominant company in West Africa until 1950. The firm won the praise of Adolf Hitler who noted its 'incredible efficiency' at exploiting colonies. Chairman Niall Fitzgerald is one of the leading global supporters of privatisation and the market. Unilever is the world's biggest advertiser, spending around £3 billion a year.

PEPSICO (expected profit $3.5 billion) is most famous for its cola but also owns KFC. It has subsidiaries in repressive regimes such as Burma.

MARS INCORPORATED (expected profit $2 billion) brands include Snickers, Twix, M&Ms and Uncle Ben. It is another multinational that benefits from collapsing commodity prices. Its precise profits are unknown because, like Cargill, it is a private company.

DIAGEO (expected profit $1.8 billion) is the result of a merger between Grand Metropolitan and Guinness. Most of its profit comes from alcohol-Johnnie Walker, Guinness, J&B, Baileys, Smirnoff and many others.

COCA-COLA (expected profit $3.5 billion) is the best known product name in the world. It stands accused of working with death squads in Colombia to eliminate union organisation at its plants.

CONAGRA FOODS (expected profit $2 billion) has become a major force by sweeping up competitors in the meat industry. Its operations now centre on frozen foods such as Butterball turkeys, packaged foods, and agricultural products like fertilisers, seeds and chemicals


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Features
Sat 10 Aug 2002, 00:00 BST
Issue No. 1812
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