Global food companies have grown too powerful and are undermining the fight against poverty in developing countries. They are draining wealth from rural communities, marginalising small-scale farming, and infringing people’s rights. Urgent action is needed to re-govern agricultural markets so they benefit poor people, and to make companies legally accountable for their impacts on human rights and the environment.
Transnational corporations (TNCs) such as Monsanto, Cargill, Nestlé and Wal-Mart have come to dominate supply chains for food and agricultural goods, from seed to supermarket shelf. Two decades of economic liberalisation have enabled ‘agrifood’ TNCs to expand enormously in size, power and influence in developing countries; as a result, they now deal more directly with small-scale farmers. A wave of mergers, acquisitions and business alliances in the agrifood industry has concentrated enormous market power amongst these corporations:
- the top 30 food retailing corporations account for one-third of global grocery sales
- one TNC controls 80% of Peru’s milk production
- five companies control 90% of the world grain trade
- six corporations control three-quarters of the global pesticides market.
Agrifood TNCs are rapidly transforming agricultural systems in developing countries, which play a vital role in reducing poverty and promoting food security. Seventy per cent of the world’s poor people live and work in rural areas, and the majority will continue to do so until well into the 21st century. But instead of helping to generate vibrant farm economies, TNCs are having anti-development impacts on rural communities, and are undermining poor people’s basic rights.
This report marks the beginning of ActionAid International’s engagement with governments and civil society on agrifood industry regulation.