Corporate Control of Food, Farming and Health
April 25, 1999
The pace of corporate concentration within the "life
industry" is accelerating according to a new report
by the Rural Advancement Foundation International
(RAFI). "Life industry" is a term used by the giant
transnational enterprises that basically control
production and sales of commercial products for
agribusiness, food and pharmacy. The report warns
that market dominance by these giant corporations
combined with monopoly patents results in
unprecedented corporate control over the biological
basis for commercial food, farming and health.
"The Gene Giants: Masters of the Universe?" is RAFI's
third annual report on the transnational enterprises
that dominate commercial sale of pesticides, seeds,
pharmaceuticals, food and animal veterinary products.
As traditional boundaries between the pharmaceutical,
biotechnology, agribusiness, food, chemicals,
cosmetics and energy sectors disappear, transnational
firms are using complementary technologies--such as
high-throughput screening, combinatorial chemistry,
transgenics and genomics--to become the primary
players in all of these industrial sectors.
According to RAFI, a radical transformation of the
global economy is well underway. Many of the world's
largest chemical corporations are shifting out of
commodity petrochemicals into biology--changing from
industrial chemicals to agribusiness, pharmaceuticals
and food. For example, as recently as 1996, Monsanto
was the fourth largest chemical company in the United
States. In a dramatic shift to biotechnology,
Monsanto spun off its US$3 billion industrial
chemicals business as a separate company in 1997.
Since 1996, Monsanto has spent over US$8 billion
acquiring seed and agricultural biotechnology
companies.
In 1998, Hoechst (Germany) spun off Celanese, its
U.S. chemical subsidiary, in order to meet its goal
of getting out of the industrial chemical industry by
the end of 2000. In December, Hoechst and France's
Rhone-Poulenc merged to form Aventis--"the world's
biggest life science company." With combined sales of
US$20 billion per year, Aventis becomes the world's
top ranking firm in sales of pharmaceuticals,
agrochemicals and veterinary medicines. The combined
research and development budget for Aventis will
reach US$3 billion--roughly the equivalent of 40% of
all funding for agricultural research in the private
sector.
Food and beverages
The food and beverage giants, however, are the "true
titans" of the "life industry." The total retail
value of global food sales is estimated at US$2,000
billion--over six times larger than pharmaceutical
sales. Put another way, the 1997 revenues of the
world's largest food and beverage corporation
(Nestle, US$45.3 billion) surpassed both the entire
commercial seed industry (US$23 billion) and the
entire agrochemical industry (US$31 billion). As
genetic engineering and related technologies become
more widely used to alter the function and
performance of plants, animal and common ingredients,
the food and beverage industry is likely to enter
into strategic alliances, mergers and acquisitions
with seed, biotech and agro-chemical and
pharmaceutical firms.
Seeds
The top 10 seed companies control over 30% of the
US$23 billion commercial seed market. However,
corporate market share is much higher in specific
seed sectors and for certain crops. For example, 40%
of U.S. vegetable seeds come from a single source and
just four companies control 69% of the North American
seed corn market. Following DuPont's March 1999
announcement that it would acquire the rest of
Pioneer Hi-Bred International for US$7.7 billion, the
Wall St. Journal said the deal "effectively divides
most of the U.S. seed industry between DuPont and
Monsanto."
The commercial market for genetically engineered
seeds has expanded dramatically in scale and
geographic scope. From 1986 to 1997, approximately
25,000 transgenic crop field trials were conducted in
45 countries on more than 60 crops and 10 traits. Of
this total, nearly half (10,000) were conducted in
the last two years. According to the International
Seed Trade Federation, the world market for
genetically engineered seed is expected to reach US$2
billion by the year 2000 and will triple to US$6
billion by 2005.
Conclusion
RAFI states that unchecked corporate power coupled
with the vanishing role of public sector research
will affect all areas of global health, agriculture
and nutrition. Neglect of the public good is
inevitable when the research agenda is determined by
the private sector in pursuit of corporate profits.
Access to food, health and nutrition--once considered
a fundamental human right--is now subject to the
whims of the free market system.
Source: "The Gene Giants: Master of the Universe?"
RAFI Communique, March/April 1999, available at
www.rafi.org.
Contact: Rural Advancement Foundation International
Publications, P.O. Box 68016 RPO Osborne, Winnipeg MB
R3L 2V9, Canada.
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