‘Big Agricultural Firms are Plunging the Food System into Crisis’

Big Agricultural Firms are Plunging the Food System into Crisis

Influential agribusiness monopolists and food producers appear to be cynically using the war in Ukraine and the aftermath of the pandemic to exert political influence, writes Thomas Perrett

The National Farmers’ Union (NFU) has warned that the UK risks “sleepwalking” into a food supply crisis brought on by the impact of the war in Ukraine on energy and commodity prices.

According to the NFU, yields of energy-intensive crops such as tomatoes, cucumbers and pears are likely to hit their lowest levels since 1985, as fertiliser prices have more than tripled since 2019, and the cost of fuel and diesel has shot up by 75%.

Food insecurity and crop failure has become a global phenomenon, with the first day of the COP27 climate conference in Egypt dedicated to the interconnected crises of climate change and food production.

Yet, the dominance of corporate interests and representatives of the fossil fuel industry overshadowed proceedings – as 636 lobbyists from polluting industries were granted access to COP27, even more than attended last year’s COP26 in Glasgow. 

In response to rising food prices and growing concerns about the impact of climate change-induced extreme weather and corporate profiteering on food supplies, influential agribusiness monopolies and food producers have emulated the tactics pursued by major fossil fuel producers. They are advocating for ‘solutions’ to the crisis which involve expanding the use of fertilisers, pesticides and the adoption of industrial agriculture.

Food justice scholar and author of Stuffed and Starved Raj Patel has said that “agribusiness and governments offered a series of patented patches designed not to transform the food system, but to keep it the same”.

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Agribusiness Influence

The vastly profitable agribusiness industry is responsible for around a third of human-caused greenhouse gas emissions. A report by Nature found that “the global food system is becoming more energy intensive, with almost a third of food-system emissions coming from energy-related activities”. Industrialised food production is the biggest threat to 86% of global species at risk of extinction.

Despite this, initiatives such as AIM4C – a US and UAE-led coalition partnered with egregious polluters such as PepsiCo and meat producer JBS, which advocates for high-tech farming innovations including “climate smart agriculture” – dominated COP27.

This meant few substantive policies were implemented to reduce global dependency on carbon-intensive production methods. Indeed, according to DeSmog, the number of representatives linked to powerful agribusiness interests rose from 76 at COP26 to at least 160 at COP27. 

More than two-thirds of AIM4C’s 300 partners are based in the US or Europe, with just 7% in Africa. Anna Maine, of the Biodiversity and Biosafety Association of Kenya, told DeSmog that “when the voice of African farmers and communities is not brought to the negotiating table, we end up with flawed initiatives like AIM4C”.

“A focus on ag-tech is often hinged on profits for multinational corporations and is not sustainable,” she argued. “Africa has workable alternatives right here at home, for resilient agriculture that works with nature.”

Major agribusiness firms have also attempted to delay and roll-back key legislation aimed at encouraging biodiversity net gain and sustainable farming, disputing the harmful environmental effects of pesticides, fertilisers and industrialised agriculture.

A report this year by think tank InfluenceMap – which found that 89% of policy engagement by prominent agribusiness lobbyists aimed to block progress on reversing biodiversity loss – claimed that “numerous industry associations have advocated for roll-backs on biodiversity-related policy in response to the war in Ukraine, citing either food or energy security as a justification for delaying or weakening environmental policy”.

It argued that “in many cases, this lobbying appears opportunistic given that industry associations are often advocating for long-standing policy asks and using the war as justification”.

COPA-COGECA – a coalition of lobbyists representing farmers and describing itself as “the united voice of farmers and their cooperatives in the European Union” – published a press release following the outbreak of the war which took aim at the EU’s ‘Farm to Fork’ strategy, a series of policies intended to promote a restorative, ecological approach to agriculture.

COPA-COGECA said “it is urgent to unleash the potential of European agriculture to mitigate the effects of this war” and called to “cultivate all available land in 2022 to compensate for the blockage of Russian and Ukrainian production”. 

It has also been active in opposing policies intended to reduce pesticide usage, having claimed that pesticide reduction “could be very detrimental for the continuity of farming activities in the EU” and that “banning different products without having sufficient effective alternatives is not an efficient approach”.

COPA-COGECA has also claimed that EU-led initiatives to increase agricultural restoration would have “severe socio-economic and environmental consequences”.

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Corporate Racketeering

These influential firms and lobbying networks have arguably put forward corporate-driven solutions to the global food crisis as a means of deflecting from their own culpability in causing it.

Despite the number of people in Britain forced to use food banks having increased by 40% since April, Nestlé, Unilever, Associated British Foods, Mondelez and Archer-Daniels-Midland Company (ADM) have accumulated £20 billion in profits in the space of a year. 

Giving substantial pay-outs to their shareholders while raising food prices, the world’s largest food producers have refused to absorb the impact of rising prices – instead passing the costs onto consumers.

Nestle, for instance, despite having made half-year profits of £4.5 billion, paid £8.5 billion to shareholders this year – while prices rose by 7.5%. Similarly, Unilever raised its prices by 12% while paying out £1.3 billion to its shareholders, having made profits of £4.3 billion last year.

The monopolisation of food production by several corporate behemoths has aggravated supply chain crises, creating agricultural monocultures which render food production vulnerable to extreme weather events and market fluctuations, and ensuring that a handful of powerful suppliers can increase prices to the detriment of both small farmers and consumers.

Just four companies control 90% of grain production, and the seed market is dominated by the ‘Big Six’ – Monsanto, Syngenta, Bayer, BASF, DuPont, and Dow Chemical, who control 63% of the world’s commercial seeds and 75% of global agrochemicals.

This level of specialisation – which has seen just eight countries account for 90% of the world’s wheat exports and four countries comprise 80% of the world’s maize exports – has exacerbated the impact of supply-side shocks on the supply of food.

A study conducted by Nature, which examined how fluctuations in food supply in one area (eg. crops) can affect other areas (eg. livestock), found that “sudden losses to food production (that is, shocks) and their consequences across land and sea pose cumulative threats to global sustainability”. 

The corporate control of agricultural supply chains has led to the industry becoming closely intertwined with financial speculation as, according to Global Justice Now, the amount of market share in wheat held by speculators has risen from 21% to 61% since 1996.

Influential agribusiness monopolists and food producers appear to be attempting to cynically use the war in Ukraine and the aftermath of the pandemic to exert political influence. But they bear no responsibility for aggravating a global food crisis caused by the industrialisation of agriculture, monocultural farming methods and rampant commodity speculation.

The increased supply-side shocks to food production brought on by climate change indicate that, unless such corporate lobbying is curtailed, the consequences of these interlocking crises could be severe.