Global food systems being hijacked by corporate interests

Food shop. Photo courtesy of Gabriella Clare, Unsplash

Penang, 23 Sep (Kanaga Raja) — Corporate power in food systems is highly concentrated, allowing a relatively small group of people to shape what is grown, how it is grown, labour conditions, prices and food choices in a way that serves the ultimate goal of profit maximization and not the public good.

This is one of the main conclusions highlighted by the UN Special Rapporteur on the right to food, Mr. Michael Fakhri, in his latest report (A/80/213) to the UN General Assembly in New York.

In his report, the Special Rapporteur examines how a relatively small number of corporations have amassed so much power within the world’s food systems and how this phenomenon is violating human rights.

Corporations have grown so large and powerful over the past several decades that they now globally dominate food systems, he said.

“Many transnational agrifood companies are more in the business of selling edible commodities rather than good food. Moreover, corporations are increasingly influencing how policy decisions are being made within national Governments and the United Nations.”

The rise of corporate power in food systems correlates with the increasing trend of the industrialization of food production, the UN expert noted.

As a result, corporate-led industrial food systems have increased rates of greenhouse gas emissions, biodiversity degradation, pollution and systemic human rights violations, Mr. Fakhri pointed out.

He also said today, agrifood corporations are turning more towards new digital technologies and large amounts of data processing, through the use of digitalization, which creates new human rights challenges in food systems.

The Special Rapporteur said the problem of corporate power in food systems stretches back centuries as a part of imperial rule.

However, “what is unique today is the expansion of corporate power into all aspects of the food system and the consolidation of corporate power over the past decades.”

Beginning in the 1960s, the food and agriculture sector in developed countries became increasingly dominated by corporations. As a result, developed countries’ agricultural subsidies were in effect corporate subsidies, he said.

He said at the World Food Conference held in 1974, some national delegates raised concerns that multinational corporations had too much power as both buyers of developing country products and sellers of necessary inputs, much like the core debates around the Food Systems Summit held in 2021.

During the COVID-19 pandemic, industrialized agriculture and food production sites became breeding grounds for pathogens, he added.

Moreover, Mr. Fakhri said that by prioritizing economic growth and efficiency, industrial agriculture drives a constant demand for more territory and large-scale monocrop farms that pollute land, air and water and debase animal life.

“It also encourages employers to prioritize profits over workers’ rights and treat people like replaceable units.”

He said the recent increase in food prices reflects the high concentration of suppliers’ market power. Globally, food inflation rates are at record highs.

“Food inflation is principally caused by transnational corporations raising prices at rates that exceed increased costs and risks.”

Corporations have been falsely attributing price hikes to various crises to hide their profiteering, Mr. Fakhri said.

CORPORATE FOOD SYSTEMS

Elaborating on the political economy of corporate food systems, the Special Rapporteur said corporations in food systems have increased and consolidated their market power primarily through mergers and acquisitions. Market power refers to the capacity of firms to influence supply and/or demand elements of a market in ways that enable them to control prices and generate profits that exceed normal return on capital.

“Corporations may engage in horizontal strategies such as mergers, acquisitions and joint ventures to reduce competition and expand market share.”

They may also engage in vertical strategies and use mergers, acquisitions or contractual control over suppliers, distributors, retailers and ancillary industries (e.g. transportation and storage) to dominate the supply chain and gate-keep market access, the UN expert observed.

Against this backdrop, the Special Rapporteur provided some examples in the agricultural input and processing sectors:

* Seeds and pesticides: Four firms (Bayer, Corteva, Syngenta and BASF) control 56 per cent of the global commercial seed market and 61 per cent of the pesticide market. These companies increasingly rely on genetically modified organisms and artificial intelligence to drive seed development;

* Fertilizers: Five firms – OCP (Morocco), the Mosaic Company (United States of America), ICL (Israel), Nutrien (United States) and Sinofert (China) – control 25 per cent of the phosphate fertilizer market;

* Farm machinery: Four companies – Deere and Company (United States), CNH Industrial (Kingdom of the Netherlands), AGCO (United States) and Kubota (Japan) – dominate 43 per cent of the global market and are heavily investing in artificial intelligence-driven precision agriculture;

* Animal pharmaceuticals: The top 10 firms control 68 per cent of the market, with the top four holding nearly 50 per cent;

* Poultry genetics: Three corporations – Tyson Foods (United States), EW Group (Germany) and Hendrix Genetics (Kingdom of the Netherlands) – dominate the sector. In the United States, they supply 98 per cent of the breeding stock for broilers. Similar market control is replicated in Brazil, China and Africa. Evidence of price manipulation and market coordination has emerged in Zambia and the United States, leading to investigations and penalties.

Corporate power becomes problematic when corporations have the ability to increase their profit by raising prices (especially for inputs) and/or lowering wages; that power gives corporations control over inflation and employment, thereby limiting people’s power to determine how to live with dignity, said the UN expert.

He said corporations also gain control over material conditions such as technology, labour conditions, processing practices and food environments, thereby limiting choices for consumers and workers.

Furthermore, corporations are shaping food policy because of their growing political influence, which weakens democratic participation.

In Argentina, civil society organizations and Indigenous Peoples were reportedly sidelined in public discussions regarding seed law reform, unlike the biotechnology corporations concerned, Mr. Fakhri noted.

“In the European Union, 162 corporations and trade associations spend at least 343 million euros annually on lobbying to weaken green policies, a one-third increase since 2020.”

The Special Rapporteur said that transnational corporations are increasingly exploiting workers across the food system in order to keep production costs low and increase returns for shareholders.

“Workers are often paid less than a living wage, forced into long working hours, lack contracts and social or maternity protection, are subjected to sexual harassment and/or abuse, exposed to harmful substances without adequate protection and have their right to organize curtailed.”

The UN expert reiterated that industrial intensification was also designed to make farmers dependent on the expensive inputs provided by agrochemical companies.

“Such market concentration means that a small number of companies will unfairly control the price of seeds, which are the origins of life itself. Any increase in seed prices will increase the cost of farming, making it harder for farmers to turn a profit.”

Moreover, said the UN expert, the “Big Four” in the seed sector produce most of the agrochemicals correlated with genetically modified seeds.

“Those agrochemicals reduce biodiversity, which in turn lowers agricultural resilience, making farms more vulnerable to climate change shocks.”

In this regard, Mr. Fakhri said whereas countries such as Bolivia (Plurinational State of), Ecuador, Guatemala, Mexico and Venezuela (Bolivarian Republic of) promote the conservation of native seeds, Ecuador recognizes the political and social elements of farming and supports initiatives to enable small and family farmers to more easily access consumers.

IMPACT ON HEALTH & ENVIRONMENT

In his present report, the UN expert cited a recent report by the Special Rapporteur on the right to health which explained how corporate production and marketing strategies for unhealthy foods and beverages detrimentally influence dietary decisions.

For example, he said many companies specifically target lower-income countries with unhealthy products, while often pushing healthier foodstuffs in wealthier countries.

“Many food and beverage corporations market or repackage their products in a way that creates the perception that they are altering their business practices to address social, economic, environmental and health problems.”

The UN expert said such strategies can be highly deceptive, luring consumers into believing that certain products are more sustainable or nutritious than they actually are.

Corporations are also creating an increase in demand for ultraprocessed products through advertising, promotions and other marketing strategies that disproportionately target racial and ethnic minorities and people from socially disadvantaged backgrounds.

For example, he said that between 2000 and 2013, the consumption of ultraprocessed products in Latin America increased by more than 25 per cent and the consumption of fast food by 40 per cent. Similar trends were seen in parts of Africa as well.

The Special Rapporteur said most alarming is the disproportionate targeting of children. Food and beverage marketing is pervasive, with the majority of food types marketed to children as part of an approach aimed at influencing their preferences, requests, purchases and eating behaviours, and increasing the risk of childhood obesity.

In this regard, he said that despite the prohibition on advertising and other forms of breast-milk substitutes, some industry tactics include marketing practices that spread false health and nutrition claims, the cross-promotion of milks and associated brands for infants, toddlers, older children and adults, as well as lobbying and the use of trade associations and front groups.

“Ultraprocessed products rely on cheap, easily exchangeable ingredients, have a long shelf life, cause addiction and overeating, pose a great risk of obesity and non-communicable diseases, and can be sold at a much higher price than their production cost. The result is that corporations are driving the homogenization of diets.”

Encouragingly, said the Special Rapporteur, several States have adopted or are undertaking efforts to adopt front- of-package warning labelling to foster healthier lives.

For instance, Chile, Peru and Uruguay have implemented front-of-package warning labels, while Brazil, Canada, Colombia and Uganda, among others, are in the process of considering or adopting similar systems. Mexico has passed one of the most effective front-of-package labelling systems.

“Such positive measures notwithstanding, the food and beverage industry continues to strongly and extensively oppose front-of-package warning labelling regulations.”

The UN expert also said the exponential growth of supermarkets and fast-food chains is displacing smaller, informal fresh food markets that sell locally sourced food. The spread of supermarkets often coincides with increased imports and sales of ultraprocessed foods.

He said between 1990 and 2000, supermarkets’ share of all retail food sales in Latin America increased from 15 per cent to 60 per cent, with similar transitions occurring in Asia, parts of Europe, Western Asia and urban parts of Africa.

This shift in food environments favours larger-scale suppliers, often multinationals, that can meet supermarkets’ needs and requirements more easily than smaller-scale suppliers, which in turn reinforces the power imbalances throughout the food system, Mr. Fakhri pointed out.

“Brazil counteracts the above-mentioned trend through various programmes, such as a food basket programme that prioritizes local fresh food and a procurement programme for schools that prioritizes family farms, especially those that are held by land reform settlements, Indigenous Peoples, people of African descent and women.”

Unhealthy diets are linked to an unhealthy environment. Businesses are responsible for the damage caused by industrial agriculture because of input-heavy monoculture plantations, intensive livestock operations, land- and water-grabbing, deforestation and overfishing, thus exacerbating the global environmental crisis, he said.

“In fact, the leading cause of biodiversity loss is agriculture. Agriculture and aquaculture are listed as major threats for 85 per cent of the species identified by the International Union for Conservation of Nature on its Red List of Threatened Species. Moreover, food systems are responsible for between 21 and 37 per cent of global greenhouse gas emissions.”

The Special Rapporteur also said that industrial food systems rely heavily on plastic packaging. Inadequate waste management systems cause plastic to enter air, water and soil, where it breaks down into micro-particles that harm wildlife, affect plant growth and ultimately contaminate food. Gear abandoned by industrial fishing fleets is a major source of marine plastic pollution.

Agriculture is also responsible for surprisingly large contributions to air pollution, the largest environmental risk factor for premature death. Over 90 per cent of global ammonia emissions come from agriculture, constituting a major source of fine particulate matter, which has significant health impacts, he added.

“Industrial agricultural practices are the leading cause of water pollution and the largest threat to the drinking water supply of hundreds of millions of people due to the extensive use of industrial pesticides and fertilizers and to slurry from intensive livestock farming.”

Rivers and aquifers are increasingly contaminated by heavy metals, metalloids and other toxins originating from mining or industrial discharges, but also, more and more, by pesticides used in agriculture.

All of those pollutants not only severely affect the drinkability of water but also contaminate food chains, since these are toxins that progressively accumulate in living tissues, Mr. Fakhri pointed out.

In addition, he said that the excessive withdrawals for large irrigation schemes in lakes and basins have led to large-scale disasters.

For example, in the Aral Sea basin, the irrigation of almost 10 million hectares, using flows from the Syr Darya and the Amu Darya rivers, decreased the surface of the Aral Sea by one-sixth. As a result, 40,000 tons of fish were lost.

In his report, the UN expert said that without fertile soil, the world cannot eat – to abuse soil is a violation of the right to life itself.

“Yet, approximately 33 per cent of land is classified as degraded because of erosion, salinization, compaction, acidification and chemical pollution.”

He said land degradation has intensified over the past decades as a result of mounting pressures from industrial agriculture and livestock operations, including over-cultivation, overgrazing and forest clearing.

These aspects are further compounded by rapid urban expansion, deforestation and climate-related events such as prolonged droughts and coastal flooding, which contribute to soil salinization and reduced land productivity.

According to the report, soil erosion washes away between 20 billion and 37 billion tons of topsoil each year, reducing the soil’s ability to store water and, consequently, increasing water irrigation needs.

“The loss of soil is practically irrecoverable, since regenerating 2 to 3 cm of soil can take up to 1,000 years.”

The report also said that in the past decades, large transnational corporations have been acquiring community or community-used lands on a large scale, with the active collaboration of governments.

It said that the top 10 institutional landowners control over 400,000 sq km globally, approximately the size of Japan; just 1 per cent of the large industrial farms now control 70 per cent of global farmland, while 84 per cent of farms (smaller than 2 hectares) manage only 12 per cent.

“These land grabs are coupled with the appropriation of water rights. This land- and water-grabbing, carried out in the name of increasing agricultural productivity, has harmed Indigenous Peoples and rural communities by disrupting their way of life, limiting their access to good food and water and depriving them of the vital resources on which their livelihoods depend.”

DIGITALIZATION

According to the Special Rapporteur, agrifood and technology corporations are quickly promoting the use of digital technologies across all aspects of food systems.

He said digital technologies now feature in the creation of inputs (e.g. predictive plant breeding and financial technology (fintech) credit services); farm operations (on-farm robotics and management platforms); trade (digital commodities marketplaces); processing (robotics in food packaging and processing); transport and storage (digital logistics); food retail (e-commerce platforms, mobile-based food delivery); and traceability across the supply chain (blockchain analytics).

“Over the past decade, digital technologies have become an increasingly important tool for corporate actors to expand their reach and control over food systems. Indeed, digital data and the intelligence derived from them are becoming increasingly important resources, while digital technologies increasingly shape access to services and control over resources and goods.”

Consequently, the Special Rapporteur said the ability to collect, store, process, analyse and use data increasingly determines the profit, prospects and power of companies and other actors.

“That trend is reflected by the entry of big tech companies into agriculture and food, as well as in partnerships between agribusiness and big tech.”

Corporations are telling farmers that sensors, robots, digital farming platforms and other new digital technologies will improve their decision-making.

However, that same technology is designed to help corporations to accumulate data and undermine peasant food production and agroecology, the Special Rapporteur cautioned.

“What is needed is not more data, but better governance systems that ensure the power of data generation and dissemination is in the hands of the people generating those data, which in turn is used to realize the human rights of communities and Indigenous Peoples.”

The Special Rapporteur also underscored that competition law can play an important role in keeping markets fair and stable by disallowing the creation of market dominance, monopolies, oligopolies or monopsonies.

For example, in Germany, cartel practices among seven agrochemical wholesalers between 1998 and 2015 led to fines of nearly 155 million euros for coordinated price fixing.

Nevertheless, Mr. Fakhri said that competition law needs to be reformed or better enforced.

For instance, he said that in Australia, the poultry sector is dominated by two companies, Baiada and Ingham’s, which control approximately 70 per cent of the national poultry market.

He said under this system, much like in the United States, contract farmers bear the cost and risk associated with infrastructure, while the corporations retain ownership over the birds and feed.

In Yemen, where 17.1 million people are food insecure, the country heavily depends on food imports, with over 90 per cent of staple foods such as wheat, rice and sugar sourced from abroad.

A small number of intermediaries and large importers reportedly dominate food distribution channels, especially for staple foods. Such concentration facilitates price manipulation, limits market competition and restricts access to affordable, culturally appropriate foods, the Special Rapporteur pointed out.

ACCOUNTABILITY

According to the Special Rapporteur, the challenge in holding corporations liable is that they not only have the resources to outspend victims in terms of legal fees but are also legal persons that can exist in perpetuity (barring bankruptcy or personal choice), thereby outlasting the victims.

Legal damages that result from human rights violations can be budgeted for as “operating costs”, he said, adding that transnational corporations are especially difficult to hold liable because of the complex web of subsidiaries and contracts they use across multiple jurisdictions.

“Voluntary guiding principles have proven inadequate to tackle the rise of corporate power and human rights violations.”

The Special Rapporteur said corporations may sometimes concede to incentives in lieu of regulation; corporate incentives to abide by human rights law, however, are in effect corporate subsidies and might sometimes reward bad behaviour by paying human rights violators to change their ways.

The UN expert said that the European Union is an example of how corporate concentration has led to an unjust distribution of agricultural subsidies. Approximately 80 per cent of Common Agricultural Policy funds go to the largest 20 per cent of farms, typically meat and dairy producers. As a result, the European Union lost 5.3 million farms between 2005 and 2020 (a 37 per cent decline), primarily small-scale farmers.

The Special Rapporteur said some viable international methods of holding corporations accountable for human rights violations include international criminal law; the proposed international legally binding instrument to regulate the activities of transnational corporations and other business enterprises; and the proposed international tax treaty.

Individual corporate executives can be prosecuted by the International Criminal Court for genocide, war crimes, crimes against humanity and the crime of aggression. Corporations cannot be prosecuted at the Court and in fact there is no international forum with clear international criminal jurisdiction over legal persons, it said.

Nevertheless, corporations may still be held liable under international criminal law. There is a growing argument that corporations as legal persons may face international criminal liability as a matter of customary international law, it added.

Moreover, the UN expert said a number of treaties hold corporations criminally liable for specific crimes in areas including genocide, apartheid, financing terrorism, organized crime, corruption and financial fraud.

He said for the past 10 years, under the auspices of the Human Rights Council, States have been negotiating an international legally binding instrument to regulate the activities of transnational corporations and other business enterprises, which has the support of a number of States.

“There is a growing international consensus over the importance of mandatory due diligence obligations for businesses, which is reflected in the expansion of such practices in several jurisdictions.”

Yet the proliferation of national and regional models could entail fragmentation of practices across jurisdictions.

The legally binding instrument could help to avoid fragmentation by adopting a multilateral standard for such an obligation, the Special Rapporteur suggested.

“Due to the profit-driven nature of corporations, the proposed business and human rights treaty cannot rely only on due diligence. The legally binding instrument should enable international cooperation and enhance corporate legal liability across jurisdictions.”

Indeed, Mr. Fakhri said that corporate power is dynamic and therefore the treaty should ensure that reforms in international human rights law (and international environmental law) are continuously incorporated into business and human rights practice.

Finally, the legally binding instrument must take a systemic perspective, and therefore recognize the inalienable, indivisible, interdependent and interrelated nature of all human rights, he added.

At the time of writing, there is a historic opportunity to rebuild the architecture of the global tax system, he said.

In 2024, the United Nations finalized the terms of reference for a United Nations Framework Convention on International Tax Cooperation, which is set to be finalized by the end of 2027.

The aim is to establish an international tax system for sustainable development. This global tax deal is needed to end the exploitation of the public purse and the environment by multinational corporations, the ultra-rich and the polluters, said Mr. Fakhri.

“At the same time, this global tax deal can enable a coordinated approach towards surcharging the profits of companies that systemically violate human rights.”

Such a top-up tax on the industries’ profits will disincentivize the business-as-usual approach, shift investments and thus catalyse a just and equitable transition to a food system that realizes human rights, he emphasized. – Third Woeld Network