Many key industrial agrifood sectors are now so “top heavy” that they are controlled by just four to six dominant companies. This enables these firms to wield huge influence over markets, agricultural research and policy-development, thus undermining food sovereignty and driving high food prices, new analysis has revealed. A report published by the international research collective “ETC Group” in September shows that new technologies are enabling the biggest players in the industrial food and agriculture chain to further consolidate their wealth and control, especially via the digitalization of agriculture. The report “Food Barons 2022” is an update of ETC Group’s previous reports about corporate concentration and was researched over the last two years. Drawing on 2020 data and sales figures from 11 food sectors, it names and ranks the largest food corporations dominating each link of the 8-10 trillion dollar commercial industrial food chain. The authors also outline the latest corporate maneuvers that make the food system more vulnerable to shocks and disruptions. “We have to remember that structural inequality and corporate concentration drive high food prices. This report highlights the startling consolidation that has enabled profiteering around climate, conflict and COVID-19. It names the culprits who are fuelling growing hunger,” commented Veronica Villa from ETC Group’s office in Mexico City.

The report looks at so-called “food barons”, the world’s leading corporations in the food chain, including giant traders, food processors, grocers, technologists and financiers. The authors examine 11 key industrial “agrifood” sectors: seeds, agrochemicals, livestock genetics, synthetic fertilizers, farm machinery, animal pharmaceuticals, commodity traders, food processors, Big Meat, grocery retail and food delivery. Their rankings and the infographics in the report are mainly based on 2020 sales figures. They find that our food system has already tipped well into oligopoly. Economists typically speak of an oligopoly if at least 40% of a market or sector is controlled by just a few firms. The report shows that just four firms (ChemChina/SinoChem, Bayer, BASF and Corteva) control 62.3% of the world agrochemical market. The top six companies even control 78% of the market. The global market for agrochemical products was US$62,400 million in 2020. ChemChina and SinoChem (Syngenta Group) alone account for one-quarter of the global pesticide market – a share that is likely to expand rapidly following the 2021 merger of ChemChina and SinoChem. The global market for commercial seeds and traits reached $45,000 million in 2020. The top 2 companies (Bayer and Corteva Agriscience) control 40% of this market. The top 6 companies (the former two plus ChemChina/Syngenta, BASF, Groupe Limagrain/Vilmorin and KWS) control 58% of the seed market. Globally, just three companies (EW Group, Hendrix Genetics and Tyson Foods) control commercial poultry genetics, making it the most concentrated sector in the industrial food chain.

The report also looks at three critical, multi-sectoral trends that increase the ability of the Food Barons – Big Ag, together with Big Tech and Big Finance – to maintain control over the industrial food chain. The first of these is the digitalization of food and agriculture. Tech giants are becoming prime players in food, handling the data, networking and artificial intelligence that undergirds the newly digitized food chain. “The Food Barons are introducing a suite of new technologies and “techno-fixes” that are conceived and designed to entrench corporate control over food and agriculture even further,” says the report. ETC Group’s research reveals that every sector of the Industrial Food Chain is in the process of transforming into a digital enterprise. “The vista of new digital initiatives in food and ag is dizzying. On the farm, it includes concerted attempts to impose digital agriculture, weaving in drone sprayers, Artificial Intelligence-driven robotic planters and automated animal-feeding operations tricked out with facial recognition for livestock. Big Ag giants such as Bayer, Deere & Company, Corteva, Syngenta and Nutrien are restructuring their entire businesses around Big Data platforms.” The authors name Bayer’s ‘Field View’ digital platform as an example: It extracts 87.5 billion data points from 180 million acres (78.2 million hectares) of farmland in 23 countries and funnels it into the cloud servers of Microsoft and Amazon to generate new business strategies. The authors fear that these systems will displace farm workers, erode farmer’s rights and manipulate consumers. They also point to the fact that Deere, the world’s largest farm machinery company, now employs more software engineers than mechanical engineers.

The second trend is the rising power of Asian (especially Chinese) and Brazilian food barons. “In decades past, industrial agriculture was overwhelmingly dominated by corporations based in North America and Europe, and focused primarily on meeting market demand in those regions. Today, corporate players in the global South, especially China, Brazil and India are reordering the Industrial Food Chain, while adopting the same extractive model as their Northern counterparts,” the report finds. The authors highlight that the pace and scale of China’s hyper-industrializing agrifood system is without precedent. “Chinese Food Barons are catering to colossal domestic as well as global markets: China’s state-owned Syngenta Group is now the world’s largest agrochemical input firm (seeds, pesticides, fertilizers); and China’s newly consolidated COFCO is second only to Cargill as the world’s largest agriculture commodity trader.” The third trend is horizontal integration, including the increasing involvement of asset management companies in food and agriculture sectors, which creates the semblance of competition, but diminishes actual competition. In sectors such as grocery and food processing, giant asset managers Blackrock, State Street and Vanguard maintain the largest ownership stakes across many of the top firms, showing real competition to be an illusion. For example, these three large asset management firms collectively control more than one quarter of all institutional shares of agribusiness corporations such as Pepsico (20.51% of shares held collectively by the Big Three), Tyson (25.13%) and ADM (23.92%).

ETC Group warns that the extreme market power of a tiny number of firms documented in this report enables and drives high prices. The authors write: “The year 2020 was a horrific year for food security and health – but a bonanza for Big Food and Big Ag. In the midst of a global pandemic – combined with climate shocks, supply chain gridlock, price spikes, increasing hunger, food and energy shortages, civil strife, racial violence and wars – these Food Barons made the most of the converging crises in order to tighten their grip on every link in the Industrial Food Chain. In doing so, they undermine the rights of peasants, smallholders, fishers and pastoralists to produce food for their own communities and many others.” The report makes clear that policymakers and antitrust regulators haven’t developed the tools or the teeth to clamp down on 21st century oligopoly power – including the opaque power of tech giants and asset management firms. “It can be daunting to imagine taking on the Food Barons - They are backed by the titans of capital, have their claws in around 10% percent of the global economy and are ruthlessly buttressing the Food Chain with new technologies and false promises,” said Jim Thomas, ETC Group’s Research Director based in Canada. “But their power is illegitimate and not inevitable,” he added. The report also underlines that agribusiness is currently in a moment of significant transformation. “Agribusiness has failed to feed even a third of people on the planet, while wrecking ecosystems, economies and society along the way. As the food chain becomes more top-heavy these companies become more exposed and vulnerable. It’s time to topple, defund and divest the food barons of their power,” says Jim Thomas.

The authors outline three key proposals for action. The first is to support food sovereignty. According to ETC Group, it is urgent to recognize the vital importance of non-industrial food systems. Food Barons are not feeding the world and it is not in their interest to do so. In direct contrast, feeding people is recognised as a real need and is the core concern of peasants’ and grassroots organisations which have set a very clear path to be able to feed the world and rebuild the planet: food sovereignty and agroecology. The second proposal is to divest from the chain. “Institutions under pressure from civil society have already succeeded in partly directing funds away from tobacco, arms and fossil fuels on moral grounds. Grassroots climate movements have successfully named fossil fuel majors as the obstruction to meaningful climate action. Food movements should follow suit: it is a logical next step to demand divestment from the Industrial Food Chain,” says the report. Schools, universities, pension funds, local authorities and other public institutions holding investments in the identified companies should withdraw their funds from specific Food Barons and even from the entire industrial food chain. Third, powerful new technologies such as blockchains, drones, ag robots, AI platforms, RNAi, alt-proteins, designer microbes and gene drives should be closely monitored. “The participatory assessment of technologies based on precaution, as well as the development and support for the implementation of socially and ecologically useful technologies, should be a top priority for governments, multilateral communities or fora, and civil society,” the authors demand. Food governance bodies such as the Committee on World Food Security should prioritize horizon scanning, technology assessment and monitoring of new technologies that impact food systems. (ab)