Our Transnational-controlled Food Production System

 Half the world is malnourished while the other half is obese—both symptoms of the corporate food monopoly.

- Raj Patel, Food Activist, author of Stuffed & Starved

40% of world trade in food is controlled by transnational agricultural corporations in strategic partnerships with biotech seed and pesticide companies such as Monsanto. This skewed power by companies who are more interested in profit than the health and welfare of citizens is the source of many of the world’s food problems.

In 2012, the blistering record setting heat wave in the US has destroyed 45% of the corn and 35% of the soya bean crop, pushing the price of the commodities to record highs. What was the response from food multi-nationals? The head of Glencore‘s food trading business has said the worst drought to hit the US since the 1930s will be “good for Glencore” because it will lead to opportunities to exploit soaring prices.

Raj Patel, food advocate commented that “It’s unsurprising that a crisis is a revenue generator.” Glencore and other multinational food traders were in a “fine position to make money from a crisis because they’ve pushed for an international economic system that relies on them”. “They [Glencore] are millionaires making money from other people’s misery caused by the drought,” he said. “It’s the sad fact of how the international food system – that they pushed for and our governments gave to them – works.

Food production, as run by multi-national food companies is a world of inequality and polarization.

To show how a few powerful centralized food distributors control the health of the entire world, author and food activist Raj Patel conducted a global investigation, traveling from the “green deserts” of Brazil and protester-packed streets of South Korea to bankrupt Ugandan coffee farms and barren fields of India.

What he uncovered is shocking—the real reasons for famine in Asia and Africa, an epidemic of farmer suicides, and the false choices and conveniences in supermarkets. Yet he also finds hope—in international resistance movements working to create a more democratic, sustainable, and joyful food system.

The title of Raj Patel’s book, Stuffed and Starved focuses on the imbalance and polar extremes that a transnational run food system has created: malnourishment of the billion starved people of the planet in contrast to the obesity or other diet-related ills of the billion stuffed and overweight.

Patel gives a compelling argument that this sad fact is the inevitable outcome of a system in which a handful of corporations along with harmful government policies through history have captured our food system. Governments aims have been to provide cheap food for the urban masses and so prevent dissent at home. As Guardian newspaper reviewer Felicity Lawrence writes “the instruments of colonial command may have been replaced with newer mechanisms that give a greater role to the private sector, but control our food they still do with disastrous social consequences, despite all the neo-liberal rhetoric of free trade and choice.

In developed countries, affluence does not translate to health.  This transnational dominated business creates a system which manufactures deceit and enticing marketing, causing consumers in developed countries to eat highly processed and ultimately nutrient deficient food. Bad food is big business and is the chief reason responsible for these astronomical health statistics.

Processed Food

Ultra-processed food products are created from substances extracted from whole foods such as:

  • the cheap parts or remnants of animals
  • “refined” starches
  • sugars
  • fats and oils
  • preservatives
  • other additives

These products are formulated to be intensely palatable and to fool the body’s appetite control mechanisms. Many of these products, while legal, are in effect fakes, made to look and taste like wholesome food. They are formulated and packaged to have a long shelf life and to eliminate the need for culinary preparation.

Ten Transnationals Determine What we Eat


Soft Drinks

Soft drink epitomizes destructive food which reap huge profits for transnational food companies at the expense of our health.

A recent exhaustive sudy in the New England Journal of Medicine involving 33,000 Americans entitled Sugar-Sweetened Beverages and Genetic Risk of Obesity yielded clear proof that drinking soda pop and other high sugar beverages interacts with genes that affect weight, amplifying a person’s risk of obesity beyond what it would be from heredity means alone. People with genes that predispose them to weight gain are vulnerable and most of us have at least some of these genes.

I know of no other category of food whose elimination can produce weight loss in such a short period of time. The most effective single target for an intervention aimed at reducing obesity is sugary beverages.

- Dr. David Ludwig, director of the New Balance Foundation Obesity Prevention Center at Boston Children's Hospital

The conclusion of researchers of the study is that it provides the strongest evidence to date that such drinks play a leading role in obesity and eliminating them would be the singles biggest step  in the fight against obesity. Hig sugar drinks cause people to increase weight, independent of other unhealthy behavior such as overeating and getting too little exercise.

Dr. Sonia Caprino of the Yale School of Medicine wrote in an editorial in the New England Journal of Medicine that the studies ‘provide strong impetus’ for policies urged by the Institute of Medicine, the American Heart Association and others to limit sugary drink consumption.

Exporting Poison to the South

Food transnationals are salivating at the growth potential of the developing countries – markets for their health depriving products. This displacement is largely because the US, UK and Canadian markets are well saturated. Research being undertaken by Carlos Monteiro, researcher at the Centre for Epidemiological Studies in Health and Nutrition, University of São Paulo, Brazil  suggests that in any country a saturation point is reached when ultra-processed products supply around 60% of total calories, as has been the case in the UK [18] and in Canada and the US for the last two decades (unpublished data being prepared for publication).

Monteiro writes:

In the US, consumption of sugared cola and other soft drinks is now declining from a very high peak [19], and transnational corporations have moved into “designer water” and soft drinks for which health claims can be made because the drinks have been reformulated to contain more substances chemically identical to micronutrients or the dietary fibre found in whole foods.

The saturation of developed market economies with ultra-processed products may also explain why transnationals appear to be aiming for double-digit growth—sales that increase by an annual 10% or more—in the South. For instance, the growth of the Nestlé line of “popularly positioned products” is up to 25% a year, and the market for these products in Asia, Africa, and Latin America is now estimated to be over CHF 80 billion, or a little over $US 87 billion [20]. In Brazil, the consumption of ultra-processed products has already risen from less than 20% of calories in the 1980s to 28% [21], but this figure is still well short of 60%, the possible saturation level. Similarly, the current prevalence of obesity in Brazil (14% among adults in 2009) [14], has some way to go before it reaches the levels seen in countries like the UK and the US (currently 24% and 34%, respectively) [22].

More generally, the opportunities for transnational food and drink corporations to increase the penetration of ultra-processed products in very highly populated countries such as India and China, where until recently most of the populations were rural and on very low incomes, are immense. In such countries, the strategies these corporations are employing to introduce their products undermine and displace long-established traditional food systems. The impact is not only on nutrition and risk of disease. Snacking replaces meals. Commensal family and community life is undermined. Local food producers, distributors, retailers, and caterers are driven out of business. Social networks collapse. Regional and national culture and identity are eroded [23][26].

Epidemic obesity and serious chronic diseases can be seen as an integral part of economic development. Thus, Kenneth Rogoff, a former chief economist at the International Monetary Fund, recently wrote that: “Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff’ [27]. Given the disability caused by obesity, and the attendant diabetes, heart disease, cancer, and other diseases that need lengthy and expensive treatment, we suggest that the concept of “development” needs revision.

(Source: The Impact of Transnational “Big Food” Companies on the South: A View from Brazil, PLOS Medicine: July 2012, Carlos A. Monteiro et al.)

Monteiro writes in the same paper that the ongoing globalization, privatization, and deregulation of food systems and supplies may have relatively little impact on public health in high-income countries whose dietary patterns are already fully industrialized. But the displacement of traditional food systems in developing regions of the world such as Africa, Asia, and Latin America by the fatty, sugary, or salty “long-life” ultra-processed products marketed by transnational food and drink corporations has the potential to undermine public health by increasing the incidence of chronic diseases and obesity.

After the “success” of free-trade, Mexico now has the second highest rate of obesity in the world
Olivier de Schutter, United Nations Special Rapporteur on the right to food cites the example of Mexico which once had a diet described by nutritionists as near perfect but, now has the second highest rates of obesity in the world after the US. The signing of a free trade agreement with the US and Canada resulted in a massive increase in direct foreign investment in the country’s food processing sector in the 1990s and 2000s making junk food and soft drinks available to a larger number of people.

    • The average Mexican gulps 163 liters (43 gallons) per year. The US slurps 118 liters, or 31 gallons per person
    • In six years the cost of obesity-related health problems will equal Mexico’s current annual health care budget of $14 billion.
    • According to the U.N., seven out of every 10 Mexicans are overweight. Only the US has a higher rate of obesity
    • Mexicans spend more on soft drinks than they do on eggs, tortillas and beans
    • (Source: Latino Fox News)

When we look at these sobering statistics, we can easily see through the facade, CSR and greenwashing campaigns of transnational food companies and know what their real objectives are. Clearly, they and their shareholders alone are the winners while everyone else is the loser. Their continual repeated pattern of human health and environmental violations proves once again that an economic system that does not fundamentally account for human and planetary well being is responsible for destroying both people and the planet.

Food as Politics

The North American Free Trade Agreement (NAFTA) in 1994 was the first to unite the economies of two rich countries and a poor countries: The Unites States, Canada and Mexico. At the time NAFTA was introduced, about 60% of cultivated land in Mexico at the time was used to grow corn, the key staple of the population.

One of the development arguments for free trade is that by forcing producers to compete with each other, prices fall, helping the mass of urban poor. The reality was, however, that US corn farmers had an unfair advantage – they were heavily subsidized by the US government. There was no way that small Mexican producers were able to compete and sure enough, the price of corn on the Mexican market spiralled downwards as cheap US imports flowed into Mexico.  As part of liberalisation the Mexican government removed some of the supports that kept tortillas cheap in government stores. But just two processors controlled 97% of the Mexican industrial cornflour market;  it was they alone who benefited. The urban poor didn’t benefit either, in fact,the Mexican staple of Tortillas suffered a massive 7-fold price increase.

Effects of NAFTA:

  • Destroyed the livelihoods of 3 million farmers, 8% of the Mexican population.
  • Forced 1.3 million Mexicans off their land, swelling the numbers of urban poor, leading to a fall in urban industrial wages, and an increased flow of illegal workers to the US.
  • Increased poverty rates overall increased 50%
  • Increased urbanization and transnational diet causing Mexicans to become fat and obese
  • International retail: Mexican Wal-Mex incarnation taking three out of every 10 pesos spent on food in the country.

Looking back in history, food has been wielded by developed nations as a political weapon:

  • Britain as imperial power encouraged India and others to sell their wheat stocks, bringing famine back to Asia, but providing cheap food for its factory workers and keeping insurrection at home at bay
  • After the second world war the US used its agricultural surpluses as food aid to head off the communist threat

Today,  international financial institutions such as the World Bank and the IMF leverage developing country debt to force them to fall in line with decisions about food production that may not be in their best interest. 40% of world trade in food is controlled by transnational agricultural corporations in strategic partnerships with biotech seed and pesticide companies such as Monsanto, and they have tremendous influence on international creditors.

10 Seed Companies control 67% of the Global Seed Market

In the first half of the 20th century, seeds were overwhelmingly in the hands of farmers and public-sector plant breeders. In the decades since then, Gene Giants have used intellectual property laws to commodify the world seed supply – a strategy that aims to control plant germplasm and maximize profits by eliminating Farmers’ Rights.

Today, the proprietary seed market accounts for a staggering share of the world’s commercial seed supply. In less than three decades, a handful of multinational corporations have engineered a fast and furious corporate enclosure of the first link in the food chain.

According to Context Network, the proprietary seed market (that is, brand- name seed that is subject to exclusive monopoly – i.e., intellectual property), now accounts for 82% of the commercial seed market worldwide. In 2007, the global proprietary seed market was US$22,000 million. (The total commercial seed market was valued at $26,700 million in 2007.) The commercial seed market, of course, does not include farmer-saved seed. (Source: GM Watch)

The World’s Top 10 Seed Companies

Table 1: Company – 2007 seed sales (US$ millions) – % of global proprietary seed market

  1. Monsanto (US) – $4,964m – 23%
  2. DuPont (US) – $3,300m – 15%
  3. Syngenta (Switzerland) – $2,018m – 9%
  4. Groupe Limagrain (France) – $1,226m – 6%
  5. Land O’ Lakes (US) – $917m – 4%
  6. KWS AG (Germany) – $702m – 3%
  7. Bayer Crop Science (Germany) – $524m – 2%
  8. Sakata (Japan) – $396m – <2%
  9. DLF-Trifolium (Denmark) – $391m – <2%
  10. Takii (Japan) – $347m – <2%

Top 10 Total – $14,785m – 67% [of global proprietary seed market] ( Source: ETC Group )

  • The top 10 seed companies account for $14,785 million – or two-thirds (67%) of the global proprietary seed market.
  • The world’s largest seed company, Monsanto, accounts for almost one-quarter (23%) of the global proprietary seed market.
  • The top 3 companies (Monsanto, DuPont, Syngenta) together account for $10,282 million, or 47% of the worldwide proprietary seed market.
  • ETC Group conservatively estimates that the top 3 seed companies control 65% of the proprietary maize seed market worldwide, and over half of the proprietary soybean seed market.
  • Based on industry statistics, ETC  Group estimates that Monsanto’s biotech seeds and traits (including those licensed to other companies) accounted for 87% of the total world area devoted to genetically engineered seeds in 2007.

Subsidized Food Costs – The Real Cost of a Hamburger

Raj Patel contends that because the bulk of the food costs are externalized, we don’t REALLY pay the true amount of food. Patel likes to use the example of a hamburger. A $4 burger in fact really costs $200 when the many externalized costs are added up including:

  • CO2 emissions
  • water usage
  • land usage
  • loss of aquatic sea life from algae blooms from agricultural fertilizers
  • health costs to humans

These costs don’t show up anywhere on the corporate producers bottom line…but they are real costs that are costing the public to clean up.