Threats of corporate concentration in agriculture

Threats of corporate concentration in agriculture

In a report, “Who Owns Nature?”, ETC Group warns of the corporate concentration in commercial food, farming, health and the strategic push to commodify the Earth’s remaining natural resources, particularly via synthetic biology (Item 1). (The full report is available at

The report reveals that:

– From thousands of seed companies and public breeding institutions three decades ago, 10 companies now control more than two-thirds of global proprietary seed sales

– The proprietary seed market (that is, brand-name seed that is subject to exclusive monopoly – i.e., intellectual property), now accounts for 82% of the commercial seed market worldwide

– From dozens of pesticide companies three decades ago, 10 now control almost 90% of agrochemical sales worldwide

– From almost 1,000 biotech start-ups 15 years ago, 10 companies now account for three-quarters of industry revenues

– The top 10 pharmaceutical companies control 55% of the global drug market.

Focusing on the increasing concentration of the livestock sector, another report, “Industrial livestock production and its impact on smallholders in developing countries” tells a similar story (Item 2). Three quarters of the world’s chicken, two thirds of its milk, half of its eggs and one third of its pigs are produced from industrial breeding lines, i.e. genetically similar animals bred for industrial farming. These come from a decreasing number of “livestock genetics” companies, with global market shares of up to 60%. The largest poultry breeder, EW Group GmbH, also owns the largest fish genetics company. The largest cattle and the largest pig genetics company form one corporation, Genus plc. The largest GMO seed producer, Monsanto, is also engaged in pig and cattle genetics.

The report finds that much of the food supply in the hands of a few corporations, livestock epidemics have become more pervasive with decreased genetic diversity and the increased size of industrial farms, and the growth of industrial farming is unsustainable. Furthermore, contract production in corporate value chains has pushed many smallholder farmers out of business despite their important role in sustainable production and poverty alleviation. (The full report is available at


Item 1


New report warns of corporate concentration, commodification of nature; highlights global resistance grounded in “Food Sovereignty

13 November 2008

ETC Group today releases a 48-page report, “Who Owns Nature?” on corporate concentration in commercial food, farming, health and the strategic push to commodify the planet’s remaining natural resources.

In a world where market research is becoming increasingly proprietary and pricey, ETC Group’s report names names, discloses market share and provides top 10 industry rankings up and down the corporate food chain. Not all the corporations identified in ETC Group’s new report are household names, but collectively they control a staggering share of the commercial products found on industrial farms, in our refrigerators and medicine cabinets.

An international advocacy organization based in Canada, ETC Group has been monitoring corporate power in the industrial life sciences for the past 30 years. The report reveals that:

– From thousands of seed companies and public breeding institutions three decades ago, 10 companies now control more than two-thirds of global proprietary seed sales

– From dozens of pesticide companies three decades ago, 10 now control almost 90% of agrochemical sales worldwide

– From almost 1,000 biotech start-ups 15 years ago, 10 companies now account for three-quarters of industry revenues

– The top 10 pharmaceutical companies control 55% of the global drug market

With collapsing systems – eco, climate, food and financial – as the backdrop, Who Owns Nature? warns that, with engineering of living organisms at the nano-scale (a.k.a. synthetic biology), industry is setting the stage for a corporate grab that extends to all of nature.

“About one-quarter of the world’s biomass has already been commodified,” explains ETC Group’s Pat Mooney. “With extreme genetic engineering, we’re seeing new corporate strategies to capture and commodify the three-quarters of the world’s biomass that has, until now, remained beyond the market economy.”

Advocates of synthetic biology – the creation of designer organisms built from synthetic DNA – are promising a post-petroleum future where fuels, chemicals, drugs and other high-value products depend on biological manufacturing platforms fueled by plant sugars. In the 21st century “sugar economy,” industrial production will be based on biological feedstocks (agricultural crops, grasses, forest residues, plant oils, algae, etc.) whose sugars are extracted, fermented and converted into high-value products. Synthetic microbes will become “living chemical factories” that require massive quantities of plant biomass. ETC Group warns that corporations are poised to appropriate and further commodify biological products and processes in every part of the globe – as well as destroy biodiversity, deplete soil and water and displace marginalized farmers.

ETC Group’s report highlights similarities between the current financial and food crises. “Corporate-controlled food systems, suffering from decades of deregulation, have resulted in a cornucopia of calamities making us sicker, fatter and more vulnerable,” says ETC’s Research Director Hope Shand. Ongoing food contamination scandals, the global obesity burden and ocean “dead zones” caused by fertilizer pollution are among the food chain disasters cited in Who Owns Nature? “Unhealthy and hazardous food products are constant reminders of a corporate food chain broken to bits,” adds Shand.

Governments are working hand-in-hand with corporations to deny the root causes of the crises and sidestep structural reforms. “Despite the implications for democracy and human rights, no international body exists to monitor global corporate activity and no UN body has the capacity to monitor and evaluate emerging technologies,” says ETC Group’s Kathy Jo Wetter. “The ongoing food emergency and imploding global economy testify to the need for monitoring and oversight of corporations, as well as social control of powerful new technologies.”

Who Owns Nature? reports on daunting trends in corporate concentration and technology convergence, but it also points to a very different reality and a powerful contrast to the corporate-controlled life sciences. Although a single company – Monsanto – accounts for almost one-quarter of proprietary seed sales, about three-quarters of the world’s farmers routinely save seed from their harvest and grow locally-bred varieties. Wal-Mart may be the world’s largest buyer and seller of retail food, but 85% of global food is consumed close to where it is grown – much of it outside the formal market system.

“There is vast and growing resistance to the dislocation and devastation caused by the agro-industrial food system,” points out Silvia Ribeiro of ETC Group. “In the global struggle for Food Sovereignty, the playing field isn’t level, but the scope of resistance is massive – peasant farmers, fisher people, pastoralists and allied civil society and social movements are fighting for locally controlled and socially just food and health systems.”


Item 2

Susanne Gura (2008): Industrial livestock production and its impact on smallholders in developing countries. Consultancy report to the League for Pastoral Peoples and Endogenous Livestock Development (, Germany


The industrialisation of livestock production has reached most countries in the world. Three quarters of the world’s chicken, two thirds of the milk, half of the eggs and one third of the pigs are produced from industrial breeding lines, i.e. genetically very similar animals bred for high output. This occurs mostly using concentrate feed and frequent chemical veterinary treatments, often on large farms that often are climate controlled, and with increasingly heavy “biosecurity” – measures controlling entrants to factory farms like personnel or visitors, feed, replacement animals – to prevent infections. 

The study describes industrialisation of livestock production and its impact on smallholder producers, and discusses what should be done to improve their situation. Smallholder livestock farmers make up 70 % of the world’s poor, and small-scale family farms hold the key to more productivity, environmental sustainability, and more employment, as shown by e.g. the recent EcoFair Trade Dialogue studies commissioned by German non-governmental organisations.

Over the past decades, high-bred cows, pigs and chicken together with factory farms have been introduced into developing countries, often aided by development cooperation, and supported by measures such as subsidies, veterinary services, local research and animal health regulations. Where environmental conditions were too harsh for the exotic animals to produce or even survive, crossbreeding with local breeds was the approach advocated, as local breeds and production systems were usually considered unproductive and backward. 

Livestock development policies very often resulted in distorting market forces in favour of industrial systems to the disadvantage of smallholder systems which were not only the main providers of products like fertilizer, meat, milk, eggs, wool, hides and skins, but also of essential services, like transport, credit (“banks on hooves”), landscape conservation, environmental protection, and who also formed an important basis of social organisation and cultural identity. Such products and services are still essential in many areas, rural and urban. Productivity comparisons that focus on just milk, meat or eggs quantity and quality, rather than including products and services relevant to smallholders have resulted here in biased evaluations.

The fact that the livestock industry is growing seven times faster than smallholder livestock systems is very likely a result of the heavy support. Not surprisingly, the willingness of the youth to remain in smallholder livestock production is often also decreasing.

In the best case, where there are enough affluent consumers, traditional products can fetch a premium price in a niche market. More generally, however, smallholders tend to become contract farmers or agricultural labourers, or give up livestock raising. 

Value chains that integrate farmers through contracts have been established in livestock production in many countries. A value chain comprises the activities bringing a product from the producer to the consumer. International food corporations nowadays are using the term “value chain” to describe the integration –usually by contract- of producers into the corporations’ procurement of raw material for processing and trade. Smallholder poultry, pig or milk producers often become part of a contract chain. They usually receive most or all major inputs including credits, and usually deliver the products, often at guaranteed prices, to the same company. In some cases, independent veterinary advice is no longer obtainable. The little available data suggest that contract farmers bear the risk involved in agricultural production, are often indebted, and moreover, have no choice but to upgrade technologies, thereby increasing their indebtedness. This is especially severe in view of the increasing animal disease risk, and the growing investments into biosecurity measures necessary to contain the infection risk.

Examples from chicken and pork production in Brazil and Thailand, where local corporations have set up production and export value chains, show that a concentration process is taking place. The factory farms increase in size, while most smallholders have to leave the sector. In Thailand, around a quarter of the poultry population was native and raised in smallholder backyards until Avian Flu regulations eliminated many of them by massive culling. A smallholder pig farming business is surviving in the Philippines until in 2009, further market liberalization is expected to lead to its decrease. In China as well as Vietnam, smallholders as well as investors are being incorporated into large pig production industrialization programmes. 

Poultry and pig factories integrated into corporate value chains are fast growing in Asia and Latin America, and poultry factories are sprouting up in many African countries as well. The four globally active poultry breeders (Erich Wesjohann Group, Hendrix Genetics, Groupe Grimaud and Tyson) have established multiplication and distribution systems for their hybrid lines in all these areas. Farmers cannot breed the hybrid lines, but need replacements for each production cycle, and this dependency – often contractually exclusive – has fostered an extreme concentration. With the help of hybrid pig lines there is a rapid concentration taking place in the pig breeding industry, which is also spreading its multiplication and distribution systems worldwide. The achievable rates of return have attracted seed corporations like Monsanto to invest in livestock genetics. Exclusive access to gene and information technologies is also fostering further concentration, including cattle genetics. The global market leaders of pig, cattle and shrimp genetics all are subsidiaries of one livestock biotechnology corporation, Genus plc.

Food corporations are increasingly looking for lower cost raw materials in the South. For example, the “Dairy Pakistan” plan is a government plan built on Nestlé’s strategy. Pakistan’s millions of buffalo milk producers will, with the help of a new regulation stipulating that all milk sold to consumers has to be pasteurized, be forced into Nestlé’s value chain. Pakistan is the fourth largest milk producer in the world, with the lowest production cost. Nestlé is Pakistan’s most powerful consumer goods company. In order to increase its access to milk, Nestlé is also planning to replace the buffalos with industrial dairy cattle breeds, although buffalos thrive well on local feed, and their milk is highly valued by smallholders and consumers. 

Recent drastic feed price increases may upset many of the plans to further develop industrial livestock production. The competition between food, feed, and agrofuels is expected to only further increase prices. Pressure on the next alternative, locally available feed sources, is very likely to increase. Smallholders, if not protected, may be among those who will suffer most from price increases in local feed resources. 

With liberalization, global trade in livestock products has grown substantially over the past decade, and animal diseases and associated regulations have become its major determinants. They usually respond to the needs of industry, not of smallholders. For example, Avian Flu regulations in developing countries are known to have culled backyard poultry in huge numbers, although the disease problems have increased along with the size and uniformity of the factory farms. Another example are export oriented animal health regulations. They have helped to eliminate smallholders in Brazil, while the country with its low cost feed production has become the world’s main meat exporter. 

While statistics since their beginnings have recorded China as the world’s largest meat producer, it only became an international factor in the past decade. The country is now playing a major role at the global level due to its current imports, political power, and environmental destruction levels. China’s growing pig production is based partly on smallholders, partly on factory farms up to half a million animals as currently run by the US market leader Smithfield. Local food corporations like COFCO increasingly control the world’s largest market. During 2007, a severe outbreak of a respiratory disease (Blue Ear disease, PRRS) contributed substantially to inflation, and lead to new pork production subsidies. China may also increase its influence on international trade standards:

A recent deal to import US pork made Smithfield agree not to use the beta blocker Ractopamine which is outlawed in China and the EU.

Nestlé is heavily investing in China, and after having convinced the government to implement a school milk programme, a huge dairy industry is being developed. Its centre is Hohhot, the capital of Inner Mongolia, while the nomadic livestock herding, the main traditional economic activity of this region, is increasingly restricted. The result is visible in satellite photos. Looking at the border between China and Mongolia, the Chinese area is degraded, whereas in Mongolia, where pastoralists constitute the majority of the population and their movements are unrestricted, there is hardly a desertification problem.

While the social and political problems have not often been a topic, environmental problems associated with intensification of livestock production are being discussed more widely than ever before. Feed grains occupy a far greater area than agrofuels, and methane emissions from ruminants are one of the biggest contributors to global warming. Despite these problems, few countries have sustainable livestock sector policies addressing them. Production increases at almost any price govern policies, without recognizing its limits. Production increases have led to average consumption levels in the South already reaching the maximum levels recommended by nutritionists. They correspond to about half the animal protein levels consumed in the North – levels that are linked to widespread human health problems. Nothing so far has halted the “livestock revolution” where Southern governments cushion the ground for extremely problematic industrial production systems. Consumer and animal welfare organisations all over the world have been advocating on the issue of industrial livestock production, arguing that there is no such thing as cheap meat. 

Market power of the food corporations remains a major problem which has not yet been properly addressed. While one of the most influential development policy documents, the World Development Report 2008, was critical about the role of transnational corporations in developing country agriculture and, particularly, the problem of their excessive market power and resulting market distortions, it kept silent on the crucial question of how to regulate market power. The producer organizations recommended by the World Development Report will hardly balance the unequal power distribution between smallholder farmers and larger traders and processors. The development of smallholder agriculture is often paralyzed by their dependency on one product, on a buyer monopoly, and on a single source of input and credit, and on a market that is dominated by a few countries and corporations. 

With regard to the loss of livelihoods for smallholders, the World Development Report recommended relocating smallholders as a labour force in industrial agriculture. The FAO, however, had warned that this absorbs only a rather small number of people. Movements of smallholder farmers and pastoralists from around the world who met at the Livestock Diversity Forum held in September 2007 in the Swiss village of Wilderswil argue, that not only livelihoods, but also food sovereignty are lost. Parallel to the United Nation’s Food and Agriculture Organisation’s Conference on Animal Genetic Resources in Interlaken, Switzerland, the Forum demanded a radical reorientation away from the risky and high cost industrial livestock production system. They committed themselves to striving towards food sovereignty by defending the collective rights and interests of pastoralists and other small-scale livestock keepers. 

This publication presents many examples of how smallholders and pastoralists have lost out with the expansion of industrial livestock production, but also how their movements and supporting organisations have set out to secure their rights, and continue to develop their breeds, their production systems and their cultures. A series of recommendations for action concludes the study.


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