Civic Agriculture: Reconnecting Farm, Food, and Community

4. The Global Supply Chain

c h a p t e r 4 The Global Supply Chain   The Global Food System The contours of a truly global system of agriculture and food production are quickly coming into focus. From the biotechnology laboratories to the dinner table, large multinational corporations are taking control of where, when, and how food is produced, processed, and distributed. As Bill Heffernan , a rural sociologist at the University of Missouri, recently noted in a 1999 report to the National Farmers Union, “The major concern about concentration of the food system focuses on the control exercised by a handful of firms over decision-making throughout the food system. The question is who is able to make decisions about buying and selling products in a marketplace.”1 Heffernan identifies a handful of “food-chain clusters” that are taking control of the food system from the “gene to the supermarket shelf.” These include (1) Cargill/Monsanto (2) Conagra, and (3) Novartis/ADM.2 In a similar vein, the Rural Advancement Foundation International (RAFI) published “The Gene Giants: Masters of the Universe,” which describes how transnational firms are coming to dominate the market for agrochemicals, seeds, pharmaceuticals, and animal feed and products. According to RAFI, the food and beverage [48] giants are the “true titans” of the “life industry.” Total retail sales of food worldwide are estimated at $2 trillion.3 As genetic engineering and related technologies become more widely used in agricultural production and food processing, transnational firms in the food and beverage industry are likely to form alliances with the seed, biotechnology, and agrochemical companies that Heffernan discusses. Today, mass-production food processors and distributors along with mass-market retailers have become dominant fixtures in the American food economy. These large-scale producers and retailers provide abundant quantities of relatively inexpensive, standardized goods. The degree of concentration has reached the point where the ten largest multinational food processors control over 60 percent of the food and beverages sold in the United States. According to Prepared Foods, the leading trade publication for the food and beverage industry, the list of the largest food processing companies is led by Swiss giant Nestlé (see table 4.1). Nestlé had sales of over $46 billion in 2001. Kraft Foods, which was recently spun off from Philip Morris, is the largest U.S.-based food company, with sales of over $38 billion. Overall, seven of the ten largest food processors are headquartered in the United States. The sheer size of the multinational food giants has important consequences for farmers and their farms, not only in the United States, but around the world as well. According to the geographer Philip Hart, “Size brings economic power and this is particularly significant when set against the structure of the farming industry with its large number of relatively small producers. Some of the most dramatic recent changes in agricultural marketing reflect the power of these new markets to extract their requirements from the farming industry.”4 Large food processors and retailers centralize their purchases of farm products. Because they seek mass the global supply chain [49] quantities of standardized and uniform products, they have considerable power in dictating how and where agricultural production takes place. During the 1970s and 1980s a rather dramatic transformation began to take place in the processing side of the food industry . A wave of mergers and acquisitions transformed what was at the time a system of large, nationally oriented food companies into a global system of multinational food giants. In the process of this transformation, the ties between farmers and processors were restructured. The story of Green Giant is revealing. The Jolly Green Giant as a Corporate Migrant The Green Giant company began life as the Minnesota Valley Canning Company in Le Sueur, Minnesota, in 1903. The company grew steadily through the 1940s and in 1950 changed its name to Green Giant. Although the canned and frozen vegetable business stagnated in the 1950s, the 1960s civic agriculture [50] civic agriculture Table 4.1. Ten Largest Food-Processing Corporations: 2001 Company Headquarters Sales ($ million) Nestlé Switzerland 46,628 Kraft Foods USA 38,119 ConAgra USA 27,630 PepsiCo USA 26,935 Unilever UK 26,672 Archer, Daniels, Midland USA 23,454 Cargill USA 21,500 Coca Cola USA 20,092 Diageo* UK 16,644 Mars USA 15,300 Source: Prepared Foods, December 2002, p. 83. * Diageo sold off its Pillsbury Division to General...