7-Misc.: New RAFI report on corporate control of food, farming and health
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-------------------------- GENET-news ---------------------------
TITLE: Corporate Control of Food, Farming and Health
SOURCE: P A N U P S (Pesticide Action Network Updates Service)
DATE: April 25, 1999
----------------- archive: http://www.gene.ch/ ------------------
Corporate Control of Food, Farming and Health
The pace of corporate concentration within the "life industry" is accelerating according to a new report by the Rural Advancement Foundation International (RAFI). "Life industry" is a term used by the giant transnational enterprises that basically control production and sales of commercial products for agribusiness, food and pharmacy. The report warns that market dominance by these giant corporations combined with monopoly patents results in unprecedented corporate control over the biological basis for commercial food, farming and health.
"The Gene Giants: Masters of the Universe?" is RAFI's third annual report on the transnational enterprises that dominate commercial sale of pesticides, seeds, pharmaceuticals, food and animal veterinary products. As traditional boundaries between the pharmaceutical, biotechnology, agribusiness, food, chemicals, cosmetics and energy sectors disappear, transnational firms are using complementary technologies--such as high-throughput screening, combinatorial chemistry, transgenics and genomics--to become the primary players in all of these industrial sectors.
According to RAFI, a radical transformation of the global economy is well underway. Many of the world's largest chemical corporations are shifting out of commodity petrochemicals into biology--changing from industrial chemicals to agribusiness, pharmaceuticals and food. For example, as recently as 1996, Monsanto was the fourth largest chemical company in the United States. In a dramatic shift to biotechnology, Monsanto spun off its US$3 billion industrial chemicals business as a separate company in 1997. Since 1996, Monsanto has spent over US$8 billion acquiring seed and agricultural biotechnology companies.
In 1998, Hoechst (Germany) spun off Celanese, its U.S. chemical subsidiary, in order to meet its goal of getting out of the industrial chemical industry by the end of 2000. In December, Hoechst and France's Rhone-Poulenc merged to form Aventis--"the world's biggest life science company." With combined sales of US$20 billion per year, Aventis becomes the world's top ranking firm in sales of pharmaceuticals, agrochemicals and veterinary medicines. The combined research and development budget for Aventis will reach US$3 billion--roughly the equivalent of 40% of all funding for agricultural research in the private sector.
Food and beverages
The food and beverage giants, however, are the "true titans" of the "life industry." The total retail value of global food sales is estimated at US$2,000 billion--over six times larger than pharmaceutical sales. Put another way, the 1997 revenues of the world's largest food and beverage corporation (Nestle, US$45.3 billion) surpassed both the entire commercial seed industry (US$23 billion) and the entire agrochemical industry (US$31 billion). As genetic engineering and related technologies become more widely used to alter the function and performance of plants, animal and common ingredients, the food and beverage industry is likely to enter into strategic alliances, mergers and acquisitions with seed, biotech and agro-chemical and pharmaceutical firms.
The top 10 seed companies control over 30% of the US$23 billion commercial seed market. However, corporate market share is much higher in specific seed sectors and for certain crops. For example, 40% of U.S. vegetable seeds come from a single source and just four companies control 69% of the North American seed corn market. Following DuPont's March 1999 announcement that it would acquire the rest of Pioneer Hi-Bred International for US$7.7 billion, the Wall St. Journal said the deal "effectively divides most of the U.S. seed industry between DuPont and Monsanto."
The commercial market for genetically engineered seeds has expanded dramatically in scale and geographic scope. From 1986 to 1997, approximately 25,000 transgenic crop field trials were conducted in 45 countries on more than 60 crops and 10 traits. Of this total, nearly half (10,000) were conducted in the last two years. According to the International Seed Trade Federation, the world market for genetically engineered seed is expected to reach US$2 billion by the year 2000 and will triple to US$6 billion by 2005.
RAFI states that unchecked corporate power coupled with the vanishing role of public sector research will affect all areas of global health, agriculture and nutrition. Neglect of the public good is inevitable when the research agenda is determined by the private sector in pursuit of corporate profits. Access to food, health and nutrition--once considered a fundamental human right--is now subject to the whims of the free market system.
Source: "The Gene Giants: Master of the Universe?" RAFI Communique, March/April 1999, available at www.rafi.org.
Contact: Rural Advancement Foundation International Publications, P.O. Box 68016 RPO Osborne, Winnipeg MB R3L 2V9, Canada.
-| Hartmut Meyer
-| The European NGO Network on Genetic Engineering
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