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Food Supplies In A Globalised Economy

Food Supplies In A Globalised Economy






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    Food Supplies In A Globalised Economy Food Supplies In A Globalised Economy Presentation Transcript

    • Food supplies in a globalised economy The role of TNCs
    • Introduction – Food chain
      • Small number of agribusinesses now dominate each part of the food chain in MEDCs.
      • Chemical companies that produce seeds are increasingly linked to grain traders & food processors in the production chain.
      • The same companies buy, ship & mill the grain and then feed it to the livestock or turn it into cereal.
      • Horizontal integration – When small no. of firms control a given market = increasing power & profits.
    • Case study: Agricultural markets in the USA - Cargill
      • Terminal grain handling facilities – Cargill, ADM & General Mills.
      • Corn exporters – Cargill, ADM, Zen-Noh
      • Beef packers – Cargill, ConAgra, Tyson
      • Flour Mill facilities – AGM, ConAgra, Cargill, General Mills.
      • CARGILL – largest grain exporter; dominant in wheat, soya beans, corn & cotton; ranked in the top 10 for food & beverage; major player in beef packaging, ethanol & fertiliser production.
    • Global Scale
      • 3 companies control 90% of world coffee exporters - their turnovers are larger than the GNP of some countries.
      • Vertical integration – One company either owns or controls through joint ventures multiple stages of the production chain. For example, Dole – owns plantations, canning facilities and has the marketing power to bring pineapples from plantations in the Philippines to the whole world.
    • Cereal crops
      • While farmers growing cereal crops ear, negative returns, breakfast cereal companies reap the profits.
      • Bushel of corn sold for $4 in 1989, while a bushel of corn flakes sold for $136.
      • In the same year cereal companies made 186 to 740 more profitable than the farms.
    • Contaminated video – You Tube
      • 5 Agrochemical industries control the food market. They control everything from seed to table.
      • Companies such as Monsanto have created seeds with traits, that are desirable to them.
      • They have created seeds resistant to a specific pesticide – their purpose to sell more of their own pesticide ‘Round up’.
      • They have also patented the seeds, so farmers are not allowed to save or develop them.
    • Extracts from Battle of the food chain article
      • Manufacturers have gained the most, from the post war food settlement, of government subsidies. The subsidies ensured the manufactures had a secure supply of raw materials.
      • Nestlé – biggest food manufacturer - $46bn worth of food in 2001. This is largely due to mergers & acquisitions – Kit Kat & Rowntrees are now owned by Nestlé.
    • Battle of the food chain extracts continued
      • Mergers & acquisitions have also occurred in the agrochemical industry, as these companies have moved into GM crops.
      • Similar situation in regards to supermarkets – Walmart owning Asda.
      • Retailers Vs Manufactuers.
      • Food industry lobby huge in Britain – Lord Sainsbury.
    • Problems associated with agribusinesses
      • Global operations give agribusinesses a political voice in many countries – impose policies which reflect their own interests.
      • Allocate labour intensive problems to low wage economies & environmentally damaging processes, where environmental regulations are lenient.
      • Use high amount of pesticides & fertilisers, which contaminate water supplies. Production of one crop also leads to soil erosion & loss of biodiversity.
    • Problems associated with agribusinesses 2
      • Destroyed traditional agricultural communities.
      • Undermine long term sustainability in some parts of the world.
      • Many products grown in lEDCs are not aimed at the local needs but MEDC demands – food shortages.
      • Some promote GM crops
      • Dumping.
    • Top six UK food retailers Grocery market share, 12 weeks to March 30 2003. 1 Tesco 25.5% 2 Sainsbury's 17.4% 3 Asda 15.8% (Source: Taylor Nelson Sofres) Top 10 global food retaliers Global sales in Euros, 2002. 1 Wal-Mart (US) 199bn 2 Carrefour (Europe) 86bn (Source: Cap Gemini Ernst & Young) Top 10 global food manufacturers Total food sales in US$, 2001-2002. 1 Nestlé 46.6bn 2 Philip Morris (Kraft) 38.1bn 3 ConAgra 27.6bn 4 Unilever 26.7bn 5 PepsiCo 25.1bn 6 ADM (corn milling) 23.5bn 7 Tyson (meat processing) 23.4bn 8 Cargill 21.5bn 9 Coca-Cola 20.1bn 10 Mars 15.3bn