GENTECH archive


World food output seen dominated by food 'clusters'

As I was saying ....
   WASHINGTON, Feb 11 (Reuters) - A handful of food "clusters' --
   alliances of producers and processors -- will dominate world food
   production in the future, deciding who eats and reducing farmers to
   day laborers, a U.S. farm group said on Thursday.
   The agribusiness goliaths of today will grow ever-bigger and
   intertwine to direct each step of the food chain from seed to the
   grocery shelf, the activist National Farmers Union said.
   Three clusters already were apparent, it said -- Conagra,
   Cargill/Monsanto and Novartis AG/Archer Daniels Midland. 
   "The trend to a privately centralized food system puts our food
   security in great jeopardy,'' NFU president Leland Swenson said, in
   urging a moratorium on large-scale mergers in the agricultural sector.
   NFU unveiled its study, written by a University of Missouri professor,
   at a House Agriculture Committee hearing on concentration in farming.
   There is concern in farm country that mergers give too much power to
   big firms and make it harder for farmers to get a fair price for their
   crops and livestock.
   "They (farmers) are going to find themselves having to go out and be
   contract growers,'' Swenson said, which would mean following orders on
   what to grow and when.
   At the same time, the report said, the food "clusters'' "are in a
   position to decide which people in the world will eat'' by owning a
   sizable part of the food supply and wanting to profit from it.
   According to the report, four or five "clusters'' will develop with
   numbers limited by access to biotechnology rights. The "clusters''
   would form through joint ventures, partnerships, acquisitions,
   contracts and side agreements.
   It used the existence of such links, even if they involved
   comparatively small operations, in sketching the clusters.
   Cargill Inc, the world's largest grain exporter, and Monsanto Co, a
   biotech leader, were grouped based on a joint venture set in 1998 on
   seed marketing.
   "There are a host of major players in the food system which are not
   included in our three food chain clusters,'' the report said. "Most
   likely, some of them will join together to form new food chain
   clusters, while others may join the clusters we have identified.''
   For example, it said, seed companies Pioneer and Mycogen could anchor
   new clusters, or Bunge, one of the world's leading grain traders, could
   align itself with a meat processor like Tyson Foods. 
   Conagra was listed as a food cluster by itself because it is the No 2
   food processor as well as a leader in meatpacking and grain milling.
   ADM, a miller and processor that bills itself as "supermarket to the
   world,'' and Novartis, a seed and pesticide giant, were cited as a
   "cluster'' because of a joint venture to develop specialty corn
   hybrids for food and feed uses.
   A Kansas City Federal Reserve Bank economist, Mark Drabenstott, said
   the nation was seeing the development of "supply chains'' that linked
   farmers with processors to produce lower-cost, higher-value foods.
   Unlike the NFU, he said farmers and consumers could benefit, farmers
   by getting paid more for specializing their output and consumers by
   getting desirable foods.

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