Big food businesses are making a lot of money from the crisis

Big food businesses are making a lot of money from the crisis

Nick Dearden explains the rise of ‘food billionaires’, and what we can do to challenge their power.

Food prices have really increased. Supermarket shelves are empty. The number of people going hungry has also increased. But the cost of living crisis has not affected everyone. The big food companies – like their friends in the oil and gas industry – are making a lot of money.

Oxfam says that there were 62 new ‘food billionaires’ between 2020 and 2022, while billionaires in the food and energy industry saw their fortunes increase by a billion dollars every two days.

‘We have to have good profits so we can produce new products for our customers’ one food boss told his investors.

But they are not using the profits to make better products and they are not using them to lower prices for shoppers. They are passing the profits to rich shareholders and owners.

As Oxfam says, ‘Companies are passing increased input costs on to consumers, and they are also capitalizing on the crisis, using it to charge even higher prices.’ US President Joe Biden calls them ‘war profiteers’.

We have enough food

The simple fact is we have a deeply broken food system. But that isn’t because we don’t produce enough food. In fact, the world produces more food than it has before, more than enough to keep up with growing populations. Even Russia’s invasion of Ukraine did very little to stop global food supplies.

The food system is the problem. A smaller and smaller group of businesses control the food system. With no need to keep prices low, these businesses put up prices and push down costs. This hurts farmers and consumers. Oxfam says the big businesses cause 50 per cent of the price rises by putting up prices.

Tech researchers, the ETC group, have a report called ‘Food Barons’. It shows between four and six very big businesses control many parts of the agriculture and food.

Shoppers are feeling the rise in food costs. VIKI MOHAMAD / UNSPLASH

Companies get bigger

‘The most powerful and least-transparent companies in the industrial food chain control agricultural commodities, including grains, meat, and sugar. The top 10 commodity businesses made more than half a trillion dollars in 2020. Cargill, the biggest, is one of four companies controlling between 75 per cent and 90 per cent of international grain.

Over sixty years, these businesses have accumulated hundreds of small companies. Cargill bought 113. These businesses are now speculators on financial markets. More and more they make money not from producing food, but gambling on the price of food. This can also increase food prices.

Commodity trading made $115 billion in 2022 for food, energy, and financial businesses. They are making profits from the problems for producers and consumers.

25 years ago, 10 businesses controlled 40 per cent of the seed market, today it is just two big businesses. And more and more these businesses control other industries, too. Mergers mean just four businesses – Bayer, Corteva, Syngenta and BASF – control more than half of the global seed market and more than 60 per cent of the world’s agrochemical market. This is a nightmare for farmers.

In the US four companies control 85 per cent of corn seed sales, four firms control over 80 per cent of meat processing, and soon just three supermarkets will control 70 per cent of the grocery market in 167 cities. Krista Brown is from the American Economic Liberties Project. She says, ‘We’re at a point in our market that we haven’t seen before.’

Growing power of the big food companies

There isn’t a big marketplace, where one authority makes the decisions, and everyone goes about their business. The reality is that big players use their finance to buy smaller businesses and are then more powerful.

These businesses tell us what we’ll eat, they tell farmers what they’ll grow or rear, and they control what they’ll sell their product for, and what we’ll pay for it.

We think that we have lost about 75 per cent of plant diversity since the 1990s as businesses encourage farmers to grow similar crops. Around three-quarters of the food we eat now comes from only 12 kinds of plants and 5 kinds of animals.

Businesses rule the world

Of course, we find these problems in other areas. Powerful businesses control our lives from the medicines we take to the media we read, to the technology we use to work and connect with friends.

Research from the US finds that the top 1 per cent of businesses there control 81 per cent of business sales and 97 per cent of business assets. The top 0.1 per cent control 88 per cent of business assets and 66 per cent of sales. We see the same across Europe. Here too, there is very little action against the growth of big business power. Of 8,000 proposed business mergers, only 30 were blocked.

But perhaps we’re at a turning point.

In the US, a new anti-monopoly movement is growing quickly. President Biden regularly criticises these businesses.

In an executive order in July 2021, he promised ‘full and aggressive enforcement of our antitrust laws.’ He said, ‘We’re now 40 years into letting giant big businesses gain more and more power...I believe that this has failed.’ He also appointed antitrust expert Lina Khan to chair the Federal Trade Commission, one of the world's most powerful economic regulators.

Putting anger into action

These steps are a break from neoliberalism. But we will need to push much further and build a bigger movement around the anger about big energy, big food, big pharma, and big tech.

The first step is to form this bigger movement to completely change the economy.

NOW TRY THE ORIGINAL:

https://newint.org/features/2023/03/17/food-profit-crisis

(This article is in easier English so it is possible that we changed the words, the text structure, and the quotes.)