Fight Racism! Fight Imperialism! No.110, December/January 1992
In September 1990, Dr Maurice King wrote in the medical journal The Lancet that children dehydrated from diarrhoea in the Third World should be denied medical treatment and left to die. Curing them was pointless, he argued, when there was not enough food to feed them. His view was supported by an editorial which observed that even if an atom bomb was dropped every day on the Third World, the rate of population growth meant that problems of malnutrition would recur.
So members of the British medical profession, who take the hypocratic oath to save life, would give up on the four million children who die from diarrhoeal disease every year. The same arguments would condemn the 150 million children who suffer severe malnutrition. Their choice of imagery is horribly appropriate: the toll on human life from scarcity of water and food in the Third World is equivalent to a Hiroshima every three days. SARAH BOND examines the hunger trade.
The millions of deaths from hunger are needless. Our highly productive and scientifically advanced civilisation is quite able to sustain life for all human beings. In past periods the privileged minority could argue that they lacked the means to eliminate the hunger of the majority: not so now. Today amidst the scarcity abundance has never been so overflowing.
The problem is no longer food production itself but who controls it. That power lies with a handful of multinational corporations who determine what gets produced where and who gets to eat it. These companies’ sole interest in food is not the life it supports but the profit it yields. It is they who have reaped the benefits of abundance, while the poor still suffer scarcity. This summer while famine in Somalia claimed 300,000 lives, the International Wheat Organisation announced a bumper harvest. Between 1950 and 1986, world grain production increased a massive 260 per cent, far out-pacing population growth. World grain production is currently sufficient to provide 3,000 calories per day to every human being, one and a half times their basic requirements of 2,000 calories per day. Yet 400 million people consume less than 80 percent of this basic amount.
Meanwhile, the 20 per cent of the world’s population which lives in the wealthy capitalist countries consumes over 50 per cent of the world’s food. Here the average calorie consumption is 30-40 per cent more than the basic requirement, leading to obesity and related diseases. The processed food which makes such healthy profits for the food companies provides an unhealthy diet for the working class families who eat it. In the post-war period there has been a steady increase in new forms of malnutrition amongst the working class. It is the growth of the food monopolies that has caused this increase. Big business’ control over food has become the key obstacle to solving the problems of hunger and malnutrition.
Down on the Farm
‘If one attempted to feed the world’s 4,000 million people on an American diet using US agricultural production technologies (assuming oil was the only energy source) all known petroleum reserves would be exhausted within eleven years.’ (Susan George, Ill Fares the Land)
Control the production of wheat and cereals and you have control over the lives or – probably more appropriate in this context – the deaths of the poor majority. Today US agriculture has that control, most of the world depending upon it for cereal imports. US cereal farming is the most productive in the world and has become so by the rapid concentration of its farmland and the replacement of labour with mechanisation. In 1900 there were 5.7 million farms in the USA, with an average acreage of 146. In 1975 there were 2.7 million on an average acreage of 404. By this time, 2,000 farms a week were going bankrupt: in 1979, 20 per cent of farms raised 80 per cent of all grain and animals; by 1986, the largest 6 per cent of farms controlled 60 per cent of the total value of crops produced.
The result is enormously intensive farming, which requires high inputs of machinery, fertilisers and pesticides: to create one job in US agriculture costs $400,000 in capital investment. But its enormous productivity means its produce has fetched a cheaper price on the post-war market than any other country’s. When the world grain trade increased 250 per cent between 1970 and 1980, the USA was able to capture 75 per cent of the new market.
Other farmers cannot possibly compete with this sort of production. In the oppressed nations, they are wiped out. For the rich countries who can afford it, protectionism is the only defence: all the notions of a free market melt into the air. European agriculture has been protected by the Common Agricultural Policy (CAP). Agreed in 1962, the CAP has restricted imports to Europe via levies, tariffs and quotas. In addition it has subsidised domestic production by guaranteeing prices to farmers regardless of demand and, when this policy produced the inevitable surpluses, by subsidising the export of the surpluses at the low prices necessary to compete with US produce.
Such a policy has meant higher prices for the consumer and unemployment for farm workers replaced by machinery: between 1960 and 1985, 1,300 farm jobs were lost every day in the EC. But for the big farmers, it has rewards. European farming has become increasingly productive, the average wheat yield rising 50 per cent between 1973 and 1985. These developments have seen the EC move with the USA and other capitalist countries from net-importers to net-exporters of food in the post-war period. And their exports share in the domination of world wheat production; in 1986-7, the USA produced 32 per cent, Canada 23 per cent, the EC 18 per cent and Australia 16 per cent.
The growth of monopolies: the death of the free market
‘The food producer’s monopoly exceeds the oil monopoly.’ (US Assistant Secretary of State, 1974)
In a rational world these sorts of advances in productivity would have wiped out hunger. But driven by profit, they have only increased the control of a small group of capitalists over world food. Today just five companies control 90 per cent of the whole of the world’s wheat trade: Cargill (USA), Continental Grain (USA), Louis Dreyfus (France), Bungy Born (Brazil) and Andre-Garnac (Switzerland). The two US companies control more than 50 per cent. The biggest, Cargill, is a private company run by two families. In 1986 its sales were £32.3 billion and its assets $11.1bn. It is the largest single contributor to the US balance of payments. It operates in 36 different countries through its Geneva based subsidiary, Tradax. It has offices in Manila, Tokyo, Panama, Buenos Aires, Amsterdam and London and employs 46,000 people. It owns 500 barges, 5,000 rail trucks and 14 ocean-going vessels. Former US Secretary of Agriculture Bob Bergland said its intelligence apparatus on world agriculture was more effective than the CIA’s.
These sorts of monopolies exist not just in cereal but in almost every other area of food production, including ‘agribusiness’ which supplies the necessary inputs. 25 per cent of the trade in pesticides is controlled by three companies: Bayer (Germany), Ciba-Geigy (Switzerland) and Monsanto (USA); 80 per cent of the trade in bananas is also controlled by three companies and so is 83 per cent of the cocoa trade. Four companies control 90 per cent of the tea trade.
Many of these companies practise ‘vertical integration’, moving into all aspects of production from the supply of the seeds and inputs to the processing and marketing of the products. As the Chairman of Del Monte put it, ‘We literally begin with the seed and end at the grocer’s shelf.’ Cargill has expanded into beef slaughter and packing in Canada, oilseed processing in Asia, poultry and pet-food processing in South America and seed research in South Africa. Many of them have turnovers that dwarf the economies of the poor countries in which they operate. A decade before the Bhopal tragedy, the company responsible – Union Carbide – was selling its products in 125 countries, 75 of which had smaller economies than the corporation. Such companies can shift operations at will to more profitable sites: the Philippines became the world’s largest pineapple exporters after workers in Hawaii became unionised; US company Dole found it could pay workers in the Philippines 10-15c an hour so it sacked its 6,000 US workers and moved there.
Big corporations also monopolise the extremely profitable business of processed food. This area of the food industry has really grown up with the monopolies in the post-war period. Today in the USA 1,200 new products appear on the supermarket shelves every month. Because these products are all just slightly different processed versions of the same basic foods, massive sums must be spent on their advertising to convince shoppers they want them. Only those companies which can afford such sums can survive. So most well-known brand names are owned by just two or three companies. Recognise these? PG Tips, Brooke Bond, Lipton, Batchelors, John West, Wall’s, Mattessons, Birds Eye, Flora, Krona, Stork, Blue Band. The Anglo-Dutch giant Unilever owns them all. Unilever is the biggest advertiser in the world. In 1989, it bought 55 businesses costing £3 billion. Its chair, Sir Michael Angus, said the following year that the company was acquiring ‘something like three businesses a month around the world.’
The big bonus of food processing is the price mark-up. Farmers see the raw produce bought from them for a tiny sum and then hundreds of per cent added to the final price: cheap maize becomes expensive cornflakes. As the business magazine Fortune observes: ‘The evidence shows an industry competitive in every respect but price.’ The families who live on these companies’ processed rubbish suffer high prices and, as numerous health studies have noted, low nutrition. But the companies make a mint. Unilever has around 500 operating groups in 75 countries. Its sales in 1991 were over £23 billion, its profits nearly £2 billion.
David v Goliath: the food companies in the oppressed nations
‘This is one hell of a profitable business.’ (US agribusiness executive, Business Week, 13 January 1975)
If the small capitalist in the industrialised countries cannot withstand the might of these monopolies, what chance has the poor peasant of Africa and Asia? In the post-war period, as the monopolies have gained strength, they have turned the food trade balance of the oppressed nations from a surplus of nearly $6 billion in 1961 to a deficit of around $2 billion in 1984. Their domestic production destroyed, these countries have no alternative but to import food from the multinationals which only a minority can afford.
What agriculture remains must be aimed almost solely at the export market, to earn hard currency to pay for the imports. Today the top exports from the Third World are: coffee; tropical fruits, vegetables and nuts; animal feeds; wood; cocoa. And who dominates the export market? The same multinationals who control the imports. The governments of the capitalist countries also impose tariffs to prevent anyone but the multinationals processing the raw produce. Raw soya beans from Latin America and Asia, imported to Europe mainly for animal fodder, have no tariff imposed, whereas soymeal has a 7 per cent levy and soya margarine 25 per cent. While fresh pineapples have a 9 per cent tariff, canned pineapples have 32 per cent slapped on and pineapple juice 42 per cent.
This subordination of agriculture in the oppressed nations to the needs of the rich is of course nothing new. Colonisation paved the way for the multinationals, wiping out the indigenous methods of food production in Africa and Asia. Trading companies like Britain’s East India Company organised their own armies to secure their conquests. One historian describes how in the Congo, these companies, ‘mercilessly crushing the old African agrarian system… proceeded to make gigantic expropriations, seizing millions of hectares, burning villages, tracking down the population far from rivers, displacing and deporting them, forcing them to gather plantation crops at gunpoint.’
Some of the food giants owe their very existence to such plunder and destruction. In 1911 Unilever’s founder William H Lever acquired 750,000 hectares of palm-bearing land in the Congo, naming it Leverville. He wrote of the African on whose labour his wealth was to be built, ‘He was a child and a willing child but he wants training and handling with patience.’
Other companies benefit from the subordination which in many cases has survived independence. For example, ex-colonies are relied upon for Europe’s supplies of bananas: Britain, via the Anglo-Dutch company Geest, gets its supplies from the Windward Islands, Italy’s come from Somalia; France’s come from the Cameroon, the Ivory Coast and the French Carribean. Around 15 per cent of the value of these products goes to the countries that produce them. The rest goes to make up profits of the multinationals – which in Geest’s case were £26 million last year.
The banana crop which Geest buys from the Windward Islands (St Lucia, Dominica, St Vincent and Granada) is their main source of jobs and income. Yet it is now under threat from the EC’s 1992 free market agreement, which would lift import quotas on cheaper bananas from Central America. Geest’s chief executive David Sugden describes as ‘unthinkable’ the consequences of any departure from Europe’s ‘legal and moral commitments’ to its traditional banana producers. But just in case, Geest has bought 3,000 hectares of land in Costa Rica, investing £46 million to develop new plantations. In 1991 Geest’s turnover was nearly twice the total 1987 gross national product for all the Windward Islands put together.
The oppressed nations simply have not the means to fight such economic might. They cannot afford the investment necessary to compete with the cheap produce exported by the food companies, who have price-subsidies and food-aid as levers to prise open reluctant markets. Even tariffs to protect domestic produce are too expensive for these debt-ridden economies. Nigeria, one of the wealthier African states, has put up trade barriers to try and break from a dependence on US wheat imports which cost it $2 billion in 1984. But local produce costs two and a half times more than imports, and with pressure on from the USA and the banks it is probably only a question of time before the barriers come down.
On the other hand crops for export can be profitable – a Mexican farmer can earn 20 times more producing tomatoes for the US market than he can growing food for Mexicans. So governments and big farmers act as pimps, profiteering from the sale of their land and their people. A prime example is found in Costa Rica. A third of the Costa Rican rainforest has been cut for cattle-grazing since 1960. As a result, beef exports soared 7-fold. But intake per Costa Rican of beef fell by 50 per cent to less than a cat eats in the USA.
Costa Rica is also one of the world’s main banana exporters. Banana plantations now cover 33,000 hectares of land. These plantations replace rainforest with what is known as green desert: they use more than 3,000 tonnes of pesticides annually, which kills off all plant life except the banana crop. In July 1990, half a million fish were found floating belly up in the Marina River, poisoned by the phosphate which is used in large quantities on the plantations. And a lawsuit has been brought against the Standard Fruit Company and the petro-chemical multinationals Shell and Dow after 3,000 plantation workers were sterilised by the pesticide DBCP.
Where there has been any development of agriculture it has only served to strengthen the position of the multinationals. The Green Revolution, for example, was heralded as the answer to world food problems. Introduced first in Mexico by the US Rockefeller Foundation, it brought new strains of crops to a select group of countries, including Brazil, India, Turkey and Argentina. These crops were a new high yield variety which it was claimed would enormously increase crop yields. And this they did. But they also enormously increased these countries’ dependence upon imports of technology. As Rockefeller consultant Lester Brown openly admitted: ‘The multinational corporation has a vested interest in the agricultural revolution.’ In 1973, Massey-Ferguson announced that tractor sales were up 80 per cent in Argentina.
Supplying such inputs has been kept the sole preserve of the multinationals. India was developing a domestic fertiliser industry until the famine of 1965-6 made it dependent on US food shipments. Suddenly an end to the food imports was threatened: the conditions for their resumption? Mainly that India allows greater freedom for US investment, particularly in its fertiliser industry.
Let them eat Coke
‘…feeding the hungry will be an important part of our business strategy in the future… Of course we expect that we will obtain a return in an exchange for our efforts.’ (Helmut Maucher, head of Nestlé)
It is their activities in the oppressed nations that bring the food corporations their biggest profits. In 1983, while returns on Unilever’s investments in the EC were 9 per cent and in North America 14 per cent, in Africa they were 27 per cent and in South America 54 per cent. But for the poor, these hunger merchants reap nothing but misery and suffering.
The weather may bring drought, but it is the multinationals that cause famine. In Africa’s 1984 drought, Zimbabwe and Kenya depended upon maize imports to feed their populations, which the poor could not afford: meanwhile, Zimbabwe announced record harvests of tobacco, soya beans and cotton for export; and while their children starved, Kenyan peasants had to export strawberries and asparagus to Europe. The same is true of the current drought in southern Africa.
The control of the multinationals also drives the poor off the land. The same concentration of agriculture which drove out the small farmers in the capitalist countries has, in the oppressed nations, dispossessed thousands of poor farmers, who make up the majority of the population. The Green Revolution has served only to concentrate more land in the hands of fewer big landowners. In India, 47 per cent of rural dwellers now own less than one acre of land: 22 per cent own none at all. In Latin America, 93 per cent of farmland is owned by 7 per cent of the population. In South Africa, 85 per cent of the population was designated the worst 14 per cent of the land. 800 million rural dwellers in these countries have no land at all. Every day, thousands leave the land to join the sprawling shanty towns that house the urban poor.
And the multinationals’ control of food causes disastrous changes in the already inadequate diets of the poor. In Mexico Coca-Cola is seen as a health drink and the family will go without food to buy it for the father. In the shanty towns around Lima, many poor Peruvians live exclusively for a substance called Nicoveta, produced for export to feed chickens. Processed from fishmeal in filthy conditions, it is partly responsible for the local infant mortality rate of 50 per cent.
In Africa Nestlé has created a new syndrome of infant malnutrition, through the sales of its baby food. Dressing up saleswomen as nurses, it sent them round maternity wards to persuade mothers to give up breastfeeding. The consequence was that poor families spent up to half their income on formula food for their babies, which they eked out by overdiluting it with unsafe water in unsterile bottles. A large number of babies inevitably died from the diarrhoea this caused. A boycott forced Nestlé to stop using the nurses gimmick, but it still gives out free packs of the formula to discourage breastfeeding. And now it is developing a new product to sell to mothers as a cure for the diarrhoea its despicable practices have helped to cause.
The revelations of such criminal acts, such blatant profiteering should condemn these organisations to ignominy and ruin. The men who run them should be reviled as the epitome of all that is most loathsome in society. No moneylender after his pound of flesh, no vulture picking over the bones of the dying can practise a more deadly parasitism than they. Yet they occupy positions of power and respectability. William Lever was honoured for his activities no less than three times: he was made a baronet in 1911, a baron in 1917 and a viscount in 1922. Today his grandson Lord Leverhulme is one of Britain’s biggest landowners, with 99,000 acres.
And governments kow-tow to their interests. As Carla Jill, US GATT negotiator, put it to a Senate committee, ‘Think of me as the US Trade Representative with a crowbar… prying open markets, keeping them open so that our private sector can take advantage of them’. As for the victims, some doctor can always be found to argue that their deaths are inevitable, because they breed too much.
‘And now it is developing a new product to sell to mothers as a cure for the diarrhoea its despicable practices helped to cause.’
We must declare that it should be the vultures of the food business, not their victims, which have no place on this earth. This is not a question of charity: here, in the imperialist countries which have spawned them, the food companies are also malnourishing the poor. This problem can only increase as the economic crisis deepens. It is in the interests of the working class in these countries, as well as the poor masses in the rest of the world, that we expose the profit-hungry barons of the food business.
