Aug 062015
 

World Food Systems Summer School, ETH Zurich

The Political Economy of Food v2 (if you prefer the old version you can click here for text or audio)

I have about 2 hours to explain to you everything you need to know about economics. Which is not possible, but I’ll do my best.

Outline of the lecture

  1. Free Trade Agreements (TTIP, TTP, ALCA, NAFTA, WTO…)
  2. Debt and austerity
  3. Colonialism
  4. Economics Toolbox

Free Trade Agreements

  • What’s the difference between trade, free trade, and Free Trade Agreements? Trade is an ancient and basic human activity. Free Trade is a popular but controversial economic theory which says that sovereign nations should not have any barriers to trading. The problem with this theory is that while it’s true some products can be produced more cheaply in one place than another, this cheapness often ignores issues to do with the environment, employment, quality, security and culture. Free Trade Agreements are not the same thing as Free Trade. Free trade Agreements are a set of treaties between countries that establish international legal structures.
  • Who is involved in writing the contents of the treaties? Not citizens groups, not environmental groups, not UNDP, not World Health Organization, not UN Working Group on Climate Change, not human rights and civil rights lawyers… Only multinational corporations have access, and people who represent their interests, along with governments.
  • What’s in those treaties? What they do is create new international constitutions for the right to do business. These supercede national constitution. They supercede most United Nations declarations and agreements. These treaties cannot be re-written or renegotiated.
  • What does “the right to do business” mean? Eliminating any kind of law of a sovereign country which prevents a foreign corporation from doing a business project.

What kinds of laws can be eliminated?

  • Economic protections: When a country has an industry or sector that is considered important to the economy, they often have some kind of economic policy protections for that sector. It could be subsidies to support that sector, it could be tariffs to make sure that imported goods don’t undercut the local goods, it could be quotas to limit the quantity of imports in that sector. Such methods of protection are illegal within free trade agreements. (Worse yet, third world countries are often forced to eliminate their subsidies and tariffs while powerful nations maintain theirs. The result is that powerful nations’ products are sold on the global market below the price of production, which is unfair competition.)
    The results:

    • 2012: US exports 38x more corn to México than before NAFTA. Subsidized US corn is sold in México below the price of production. As a result, the domestic price of Mexican corn dropped by 66%. 2.5M farmers in México lost livelihood. In first 7 years of NAFTA, Migration doubled to US.

    • South Korea has been trying not to open its rice markets (the US exports more rice to South Korea than Thailand does ?!)...Just as corn in México is a central part of economics and culture…Rice is not a mere commodity…Rice is cultivated in most of the 1.1 million farming households here…Importing more rice (at a lower tariff rate) will destroy the Korean rice producers….If we fail to foster the ‘heirs’ to self-sustainable farming, the local communities will not survive the free trade movement. ” Lee Dong-phil

  • Non-tariff or “technical” or “behind borders” barriers to trade are any kind of law which could prevent the sale of a product, or make it more expensive to produce a product: this is all law regarding food safety such as bans on hormones in meat (the WTO only respects standards set by Codex, whose standards are much lower than many European nations’), laws about chemicals like the EU REACH regulations, EU bans on GMOs, environmental laws governing emissions, product safety, rules about marketing (such as advertising limitations on cigarettes or infant formula), labelling laws, agricultural quarantines, packaging requirements or mandates for recyclable product design, and what are being called “localization barriers”(any rules favoring local producers). There are several different ways that these laws are eliminated:
    • “equivalence”: trading partners’ standards must be treated as equivalent. For example meat that is deemed safe by USDA must be treated as “safe” under European standards.
    • “harmonization”/”regulatory coherence”: re-write any existing law to bring in line with the trading partners’.
    • dispute-resolution system: Panel of unelected trade lawyers who are committed to and responsible for only one paradigm. They are not responsible for balancing trade law with human rights or ecological treaties. Every case of food safety or environmental protection has been overruled so the nation is told to eliminate their protective law. In many cases the threat of bringing a case is enough to get a poorer nation to eliminate their law.
  • No new national laws can be written which conflict with corporations’ business plans. Implementing other international agreements, such as the Cartagena Protocol on Biosafety, which was led by African scientists, becomes impossible. This makes any kind of climate protective agreements legally impossible to implement.
  • intellectual property: While these agreements eliminate laws that inconvenience multinational corporations, they actually force the passage and enforcement of other laws, for example the enforcement of patent rights on pharmaceuticals and seeds (despite the fact that most of the seeds being patented were looted from the global heritage of biodiversity and knowledge (this act is called biopiracy or bioprospecting). Intellectual property rights protected under Free Trade Agreements includes corporations’ right to advertising. So the codes limiting how infant formula can be advertised would be illegal violations of Nestle’s “intellectual property”.
  • investment rights: This is one of the most vague and far-reaching aspect of free trade agreements. It allows corporations to directly sue governments over laws or actions which conflict with their “expected profits”. What this means for food is that large retailers like ALDI cannot be forbidden or limited, or as was common in the past required to partner with local businesses. They make unfair competition with local retailers, they sell unhealthy food, and they remove all the profits. It also means that nations cannot have any limits on who can buy the land. These laws also accelerate the process of dismantling environmental, product, and food safety laws by allowing powerful corporations to sue governments directly, without even going through the official dispute resolution processes. They can claim that any law which makes it more expensive for them to do business is “expropriation”. (Here’s a briefing from some lawyers for their corporate clients.)
  • services: Free trade agreements also allow corporations into areas of the economy where they have not been allowed before, such as government procurement and what are being called “services”. That means, water, transportation, energy.
  • Although FTAS purport to be international treaties between sovereign nations, they involve many undemocratic mechanics, “bullying”
    • Dispute Resolution Mechanism: threats
    • “consensus” and democracy, bullying in the negotiation process.
    • Secrecy and avoidance of democracy within the countries, hiding it from their own people.
    • Contradictions (a point of insight): it’s not just about deregulation. It’s about whatever is in the corps’ interest. When it’s about wanting to dump cheap corn or buy land, they want deregulation of markets. When it’s about wanting to get paid for patents on medicine and seed, they want regulation. If it was really about free trade, these agremeents would be only one page. It takes hundreds of pages and years to negotiate, because the corporations are writing all kinds of twists and turns to benefit themselves.
    • Because there has been so much opposition in WTO, the powerful companies make hundreds of bilateral deals. This bullies other countries to conform.
    • pre-“certification”
  • short-term effects
    • it’s difficult to even find effects of FTAs. For Australia and New Zealand I spent weeks looking and asking colleagues, and no one knows the data on what the net effects have been. And people are not asking, because they believe in this idea and because they feel there is no alternative. The best organizations with data and analysis are Public Citizen Global Trade WatchInstitute for Agriculture and Trade Policy, and Corporate Europe Observatory.
    • Exposing your agriculture to world market prices, as New Zealand did starting in the 1980s, means that domestic consumers need to pay world prices. It also means that domestic industries are unprotected from global price falls.
      • Often trade is reported in the value of goods. But the problem with this is that the same quantity of export can change value with changing global prices. Moreover, as in an Australian case, one multinational soft drink beverage plant sited in Singapore for export to Australia can put a dent in trade figures. So aggregate figures don’t tell us much. Some researchers try to use volumes instead. But it’s hard to see anything of interest until you look at a specific sector or product.
    • The United States remained the world’s largest exporter and importer of food by value in 2011, with shares of world food exports and imports of 10.2 per cent and 8.9 per cent, respectively. The value of US food exports and imports both increased by 17 per cent in 2011 to US$129.6 billion and US$112.5 billion, respectively. So this is why there’s an interest in bullying others to open their markets.
    • farmer suicides around the world
    • Baltics most rapid implementation of this kind of policies in the world. Massive 12% growth. Core and periphery. Best land in Latvia sold to foreigners. Lithuanian labor costs competitive with China. Depopulation of the land. also fertility has dropped and life expectancy, which results in 20% population loss in 10 years.  Shadow economy, no labor rights. Charles Woolfson brand new book on Baltics. Also Bohle and Greskovits on Baltic agriculture.
  • long-term effects: dependency/loss of productive capacity, alienation of resources and skills, biosecurity, culture, nutrition, safety

Additional readings:

Pérez-Rocha, Manuel, “TTIP: Reasons why the rest of the World should be aware“, NAFTA – 20 years of costs… (pdf), Paper: Call for the building of an alternative legal framework… (pdf).

Public Citizen, “Debunking Trade Myths

Debt 

“Free trade agreements” of this type started roughly in 1995 with the implementation of NAFTA. But these policies had already been tried in another form, called “Structural Adjustment Programs”.

These “programs” are really conditions imposed by the World Bank, the International Monetary Fund (IMF), and other International Financial Institutions (IFIs). What Greece is going through right now is exactly what so many Global South nations have been going through since the 1980s.

These IFIs are set up to help nations in times of financial crisis. But what they actually do is use that crisis as a point of leverage to impose free trade policies and other economic policies that destroy any kind of economic policies that nations might have established to achieve their own goals of “development”.

What SACs basically do is liquidate the economy. Money should not be spent on any kind of social services, food subsidies, government inspections, or enforcement (so they lay off civil sector workers), education and healthcare should not be free (so user fees are imposed). Government-owned enterprises, like oil, mines, the transportation and water system, should be sold off to the highest international bidder. This means that a foreign corporation, instead of the government, will decide about the fees for using the water, transportation, energy, etc. Reduce the price of labor by repressing organizing, suspending labor laws, lowering minimum wages, and devaluing the currency (to make labor cheaper for foreign corporations) and to make exports cheaper on the global market. These same kinds of cuts are called “austerity” programs when they’re implemented in Europe. Different names for the same thing.

In the last few decades there have been many campaigns to investigate and question the legitimacy of imposing external conditions on sovereign nations’ economic policies, causing such a massive human cost. As a result the IMF and World Bank have cleverly renamed Structural Adjustment Conditions as “Poverty Reduction Strategy Papers, and they even make countries “participate” in writing them.

Why would any nation agree to treat their own people so badly? There’s an important tool that is used for control, and it’s debt. Where did these debts come from? Some of the debts are very old debts, taken out for very dubious purposes by people who are not around any more, like dictators who maybe used them to build a palace, or a fancy airport, or even to buy military hardware to repress democratic movements in their countries. Maybe they stashed some of this money in Switzerland. Some of the money was spent on things that look like “development”, like dams. The interesting thing about dams is that the companies that build them are usually foreign companies, and the energy created is usually used by corporations, but the price is paid by the indigenous people who lose their land, by environmental and cultural destruction, and by the money paid by all the people of the country, even though they don’t receive the benefit of using the energy. Like any salesmen, those who sell dams and other projects like that promise it’s going to have a transformative effect and the country will no longer have poverty afterward, and like any salesmen they are not accountable for the final outcome of what they sold. And a lot of the debt is the fault of irresponsible banks making bad loans, and when the accumulation of all those loans causes the banks to become insolvent, the country is held responsible. So now what is happening in Greece is just like what happened in Argentina, and in the US actually, which is that the private banks have been bailed out and now the ordinary people are taking on the debt which the bankers should be held responsible for. There are even special investment funds, or predatory hedge funds, called “debt vultures” which speculate (and thereafter profit) on the debt of countries in economic crisis.

Obviously not all debt is not the same. There are good and reasonable, and payable loans. There are irresponsible and deceptive loans. There is leftover debt. There are various kinds of manipulative debt, such as indentured servitude. And there are many traditions of debt relief from the Christian idea of Jubilee to the Muslim prohibition on charging interest.

Debt affects the food system from the farm level– where many farmers are struggling to pay a debt that may have been a deceptive debt– to the level of national policy –where a country cannot protect the farming industry because of structural adjustment conditions. National debt becomes a powerful means of international control.

Colonialism

What was it? British, french, portuguese, Spanish, dutch conquests of Africa, Latin America, the Caribbean, the Middle East, and parts of Asia took place from 1400s to 1900s. Realize that people in these places were doing fine. They had agriculture, trade, education, cosmology, medicine, jewelery, art, what we call “natural resource management” regimes, math, science (“experimental method”). Colonialism is that it was a very sophisticated system for taking control of land, labor, resources, and markets… It involved military, economic, political, legal, social, cultural, ideological, and religious tactics. It involved slavery, but slavery is very inefficient. there are cheaper ways. Controlling people’s minds is cheaper. So terror and religion and the idea of “civilization” were used to convince people to see the conquerers as superior and to submit themselves and hand over their stuff.

Example: In India, before the British came, there was a very advanced system of agriculture and people were wearing cotton clothes. Under colonialism, military force and taxation were used to drive peasants off of their  subsistence farms. these people then became what are called “landless laborers”. whereas before they were able to feed themselves from their own farms and their roles as producers and consumers were integrated, once landless these roles have been severed. British companies then invite the landless workers to come work on plantations on their former farms, and these plantations grow cotton. Britain has gained access to very cheap land, good soil, and cheap labor. the Indian peasantry has lost independence and is now dependent on getting “a job” from british companies in order to produce and to consume. The british companies then ship the cotton back to England, where the industrial revolution has just transformed the nature of society and work and there are factories with cheap labor to weave the cotton into cloth. Then the cloth is shipped back to India, where the British colonial rulers outlaw the production of cloth, thereby forcing Indians who knew perfectly well how to make cloth, to buy it. this is called “getting control of the market”. In this case you see how law is a tool to basically steal stuff from people. One of the important things I want you to remember from this example is that the market is a resource, just like land, labor, water, seed…

One of the social and cultural tactics that colonialism used was the creation of a “comprador class”. These were native people from the colonized countries who were recruited to support the colonizers. They were basically paid off in various ways to help operate colonialism. They got to have western clothes and houses and to send their children to be educated in Cambridge and Oxford and so forth.

Now there was constant armed and unarmed resistance to this system and eventually, by around 1950, almost all of the colonized nations mounted anti-colonial revolutions.

After colonialism the third world or what we now call Global South countries they were having processes to figure out how they wanted to run their countries. this was a very messy process of dialogue. in many places the “nation” inherited from European rulers did not match pre-existing territories of ethnic groups, so it is still a source of great difficulty to work with a political unit that did not match historic social and political patterns. But they wrote some really great constitutions. Think about the fact that these constitutions were written in the 1950s, so they were much more advanced in terms of their conceptions of human rights, civil rights, social justice, class than the French and American constitutions which are supposedly the high point of democracy which were written during slavery and way before women were people. These constitutions often establish much more liberatory civil rights, including the right to education. One of the most important dimensions of these constitutions had to do with land reform, taking the land back from the colonizers and redistributing it to the people. But in many cases, the best land in the nation remains in the hands of foreigners or national elites and is not used for local consumption. If you want to understand why postcolonial nations are “poor” or hungry look at who owns the best agricultural land, what is being grown there, and who gets to eat it. This is why in the US, winter tomatoes from Latin America are seen as an ongoing form of imperialism. An excellent book which explains exactly the cycles of postcolonial impoverishment and environmental destruction in Latin America is Bill Weinberg’s War on the Land (pdf here).

In addition to the failure to truly recover the land, another failure or incompletion of decolonization was the story about superiority. While there was very much debate and effort to re-embrace traditional culture, the educated people of the society who were in a position to provide leadership and expertise, had been educated in the colonizer’s science and economics. These were often the national elites who had helped to free the country, but they may also have come from the comprador class, and hoped to benefit from continued relations with the former colonizers, this time as “partners”. Since they were in a position of leadership in the country, they often implemented forms of national development which sought to improve conditions by copying the ideas of the colonizers.

Another leftover piece of colonialism is “paternalism”. This was the ideology used to control humanitarians from the colonizing country. It said that even though this system seemed brutal and tragic, it was really better for the colonized people, because they had been so uncivilized before. so enslaving and brutalizing people and destroying their way of life was recast as doing them a big favor. And you can see this same ideology is still active in discussions about sweatshops “well yes, it’s terrible, but at least it’s a job.” Really fair trade depends on this idea. Who really falls for the point that Europeans eating chocolate helps poor people?

So while postcolonial nations were trying to figure out how to manage “independence”, the capitalist countries (Europe and US) were competing with the socialist bloc (at first the USSR and more recently China) for control of postcolonial countries’ resources. So they were sort of trying to seduce the third world into forming alliances with them. The great historic struggle between capitalism and socialism, from the perspective of Latin America and Africa was not about any ideological issue, or even about class warfare, as it was in Europe and the US, it was simply a question of which bloc was going to give them a better deal for their resources.

The capitalist countries’ form of seduction was this promise called “modernization theory”. If the third world countries would focus their economies on export then they would get economic growth. Growth in turn was promised to bring increased standard of living (education, healthcare, longer lives, less infant mortality, infrastructure like roads, electricity, telephones, and environmental quality). The promise was that the third world nations would slowly become first world nations and even, eventually, democracies. And the idea was that if the former colonizers invested in the colonies (which was really another corporate subsidy), then we’d get world “peace”, because with increasing incomes and standard of living, nations would have no need for war. It was really a big sales job to both sides, a big lie. The taxpayers of the Global North subsidized infrastructure via “development projects” so that their corporations could go continue raping the Global South and telling everyone it was good for them. And then when poverty continued, and socialist and democratic movements rose up in those countries, the Global North blame them for being lazy, unintelligent, violent, and corrupt. And in the case of the US with Latin America and the Caribbean, engaged in decades of undeclared war against every kind of social movement which endangered their access to resources.

The so-called third world countries, or postcolonial countries, or what we now call “the global south”, are seen as incompetent basket-cases who just don’t have the intelligence to be modern. The reality is that many of these countries have tried to implement much more socially just policies, like land reform, anti-hunger policies, civil rights, universal healthcare, and education. They have tried to devote the wealth of their fertile soil and natural resources to their own people, but they have been seduced or tricked or forced into relinquishing control over their economy. And so the wealth that is theirs is being sucked away by other countries. For example, Africa and Latin America are full of what are seen as “poor countries”. The reality is they are countries with massive wealth in terms of ecological resources, and because of this they have been assaulted in every possible way, from military invasion (which is sometimes done by secretly fomenting civil war), to debt-blackmail, to bad advice and bad contracts, to dirty deals with the elites to sell out their own people, and to the the ideology of superiority which convinces big parts of the population to believe that the export path is the only way.

The “green revolution” of hybrid seeds were another very destructive strategy of “modernization”. In The Violence of the Green Revolution (pdf here), one of the most important books I’ve ever read, Vandana Shiva goes into painstaking scientific and statistical detail to show that the hybrid seeds which were promoted by these first world labs (funded by the Ford Foundation) were not superior to the traditional varieties. They were more dependent on chemical inputs, required more water, and in many cases did NOT produce more food. They were designed for monoculture and export, not in fact to address “hunger and poverty in the third world”, and they can be linked to an increase in inequality and even to the emergence of ethnic conflict. But the ideas of superiority are so powerful that they overwhelm the empirical reality of failure.

And despite continually changing the jargon, the promises of modernization theory are still what you find on the webpage of the World Bank and in all the Free Trade Agreements. All of the possible meanings of development are collapsed into the project of “market access”, which means exporting as much as possible. The presumption is that if you can sell more and more stuff somehow, this will help the country.

This same logic is being used to bully and force farmers and countries into biotechnology. This is the future because we say it is, despite biological, ecological, health, and productivity concerns, despite the fact you don’t want it. You have to take it because we say it’s good for you. And if you refuse, we will force it by law.

Many postcolonial countries have achieved certain appearances of development, such as fancy airports and tall office buildings and air conditioned shopping malls with luxury brands, but when you look deeper at the costs for labor rights, environmental degradation, healthcare, you often see the rise of wealthier classes at the cost of new ways of impoverishing the poor, whether by destroying the subsistence base or by creating a hell of sweatshops. “Cell phone penetration” especially gives the impression of a democratic level of development, but this may also be an illusion. If we can look beyond the airports and cellphones, we don’t have to look very deeply to find shocking conditions for children, women, poor people, rural people. We can look at rates of out-migration, child labor, environmental toxicity, as well as more traditional measures like hunger and health outcomes.

It is hard to believe that these conditions can exist side-by-side with enormous wealth generation which has happened globally and in many countries. The explanation of this situation is what economists call “inequality”. A country can have a high rate of production and exports, but almost all of the wealth can stay in the hands of a very tiny minority of the country. And it appears that inequality is increasing globally, and within most countries, including the so-called “first world”, “developed”, or “rich” countries as they implement austerity policies. The US and Canada are going backward if we evaluate development with standards like health and hunger.

Third world people describe SAPs and FT policies as “recolonization”

More reading about “modernization”:

  • Catherine Caufield, Masters of Illustion: the World Bank and Poverty

  • Joseph Stiglitz, Globalization and its discontents and The price of inequality

  • Naomi Klien, Shock Doctrine

  • Eduardo Galleano, The Open Veins of Latin America

Toolbox

of useful economic concepts: growth, commodification, privatization

growth

When we talk about economics, one of the basic issues is how do we define a successful economy, and the main way that is defined at the moment is growth (total dollar value of the economy’s output). a successful economy is seen as 3% compound growth forever. But there are several problems with this concept.

  1. Compound growth forever if we could achieve it, produces much more than we need, so it’s not an accurate goal.
  2. It doesn’t say anything qualitative about what we produce. If growth is the goal, toxic chemical spills and cancer are very good aspects of the economy, because they generate business.
  3. Compound growth doesn’t respect any kind of ecological limits.
  4. Growth doesn’t tell us anything about what we do with profit. So a country can have an impressive growth rate, but all that money might be kept in the hands of an elite.
  5. The growth paradigm in agriculture leads to overproduction. Then have to dump it, destroy other peoples’ markets. US Food Aid is almost all about dumping. Especially when a country is in crisis, such as famine, they need to support and rebuild production and markets, not dump food that undermines local prices and makes it impossible for local producers to sell.

  6. Lots of economic activities that aren’t even measured by growth.

There are alternative approaches to measuring an economy. One would be to measure inequality, the gap between the rich and poor. Another would be to measure quality of life in various ways. (health, education levels, leisure time…). A third would be to define “enoughness”, which is something a lot of alternative entrepreneurs have done. They are pretty clear about defining limits to their businesses, how much they can produce maintaining quality of the product and quality of their own life, how much income is enough for them.

A few books to look at:

  • Maria Mies, The Subsistence Perspective,
  • J.K Gibson-Graham, Post-Capitalist Politics
  • Richard Douthwaite, the Growth Illusion and Short Circuit
  • Herman Daly, Beyond Growth and Steady-state Economics
  • David Harvey, Seventeen Contradictions
  • Edward Goldsmith, The Great U-Turn and 7 Paths of ecology.

Commodification

use value O-O

money O-M-O

exchange value M-C-M+ . M to M+ is about concealment/externalization of costs, unequal power/position.

In school we are taught that economics is about supply and demand. Many people assume that need is the same thing as demand. But need is only demand when you can enter the market, with something to trade or money to buy. And once we are in the M+ system, we have a commodity chain in which the seller’s only interest is +. need ≠ demand

Privatization

using the law to deprive people of resources that are their rights and then sell it back to them.

  • Enclosures movement in England 1400s to 1700s: subsistence farms, grazing lands, forests were entitlement.
  • Colonialism: use of violence, taxation, and law to force people off the land.
  • free trade enables corporations to call everything “business” and then to be entitled to run it their way. For example, water. The nation owns and supplies the water. No, this is a “service”, we are entitled to make it into a business. The nation decides that cigarette smoking is unhealthy and therefore shouldn’t be advertised in public space, on public airwaves, etc. “no we have a right to sell cigarettes
  • Biotechnology/GMOs as a method of privatizing the very process of life. The very short version of what agricultural biotechnology is: paternalistic claim that farmers don’t know how to grow enough (and a lie about existing overproduction), distracting gimmicks about improved nutrition, longer shelf-life, which only corporations want (this is not a consumer benefit), but the reality is that by manipulating the genes they can control the process of plant development so that the plants become impotent, and will only grow and reproduce when we pay the price. (long version here) These are called “terminator” and “traitor” technologies. And the latest news about biotechnology is that the industry has developed a set of new techniques which they have designed so that they do not exactly meet the EU and other standard regulatory definitions of what is a GMO, which means that the EU will have to pass new legislation to stop these things from being approved.
  • Turning life into a toll road where you have to pay to keep driving every few miles. That’s the last stop of privatization. The cynical view is that undermining nutrition in food is a way to privatize human health the same way, we have to pay to stay alive. Sugar and diabetes are the perfect system: put sugar in everything, makes people sick, then they have to pay constantly to stay alive. That’s the most obvious example. But of course you could say the same about carcinogens… Cause cancer and then cure it.
  • Another form of privatization is the destruction of alternatives. Horizontal and vertical integration/consolidation do this. In the US, two big companies bought the entire slaughter and butchery part of the commodity chain for beef. And that meant the only way to sell a cow was to go through them. But farmers cooperated and undid this. According to Phil Howard, an expert on consolidation:

Food chain clusters are formed when groups of firms join together to control every step in the food chain through these processes of horizontal integration, vertical integration and global expansion. The links may be through formal or informal agreements, including mergers, acquisitions, joint ventures or strategic alliances. Although their boundaries are constantly shifting, several potentially emerging clusters have been identified. For instance Cargill and Monsanto form a cluster, with Monsanto providing genetic material and seeds, and Cargill involved in grain collection and processing, and meat production and processing. Kroger, the largest supermarket chain in the US, is linked to this cluster through an agreement with Cargill to receive case-ready meat. DuPont/ConAgra and Novartis (Syngenta)/ADM have similar ties.

Grain and vegetable growers may soon find themselves in a similar situation. Genetically engineered (GE) crops are controlled by just six multinational corporations, and the technology is being used as a tool to consolidate the seed supply. Crop farmers are then being locked into food chain clusters through “‚€œbundling,”‚€ or linking patented seeds with contracts, chemicals and credit. Monsanto’‚€™s Roundup Ready seeds can only be used with Roundup herbicide, even though cheaper versions of this herbicide are available. Pioneer DuPont seed gives better interest rates on financing, depending upon how much ‚€”approved”‚€™ products the farmer buys, and approved chemicals include those from Syngenta, Bayer/Aventis, and Dow. The precedent set with GE seeds is also being extended by “‚€œbundling”‚€ chemicals and other inputs with conventional seeds. In the UK, Syngenta‚’s hybrid barley can only be purchased in conjunction with the company’s growth regulator and fungicides.

  • Cargill is the biggest grain company in the world. They have used both horizontal and vertical integration. So they are not only now distributing grain, they are owning the seed, and contracting farmers. They can tell farmers what to grow, and the farmers won’t have a buyer unless they grow GMO seed.
  • But even quicker and more efficient and easier than horizontal and vertical integration is pollution. If the containment zones for biotech crops fail, which they are obviously doing because the companies are busy suing farmers for illegally growing their crops (farmers who said they never did and never wanted to!), if they can contaminate the seed to such a point, then there will be no biological alternative.

What can we do?

  • challenge the legitimacy of growth as economic goal, the inevitability of FTAS, the idea that farms are not productive, and the superiority of former colonizer’s ways
  • Ask hard questions about power, control, and economics in your projects: are they export-based? do they decommodify food, create direct economic relationships, protect culture, protect smallholders’ access to land, build and maintain control over marketspace, hold middlemen accountability and transparent, keep life and commons safe from privatization, heal the land…
  • build alternatives to prove to yourself and others that alternatives are possible
  • work for food sovereignty with Vía Campesina
  • work for autonomous regions, postcolonial nations in alliance, see ALBA in Latin America

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