Wednesday, August 22, 2012


"Small is beautiful" is a famous saying that set the policies of many countries in promoting small and micro enterprises during the last millennium. But the world seems to have turned on its head with the emergence of "oligopoly" that controls the food market in countries like the US. The Americans boast that theirs is a country with unlimited choices of foods to the consumers who can pick and choose from over 50000 products offered in big and well organized super market outlets, may be literally true but a close critical look will reveal that these products are made by a few players with deep pockets and political power to sabotage any well meaning policies considered good for the consumers. The very fact that more than two thirds of the 300 plus million population in the US are either obese or overweight tells its own story regarding the track record of these handful of giant transnational companies. Fast disappearing breed of small and family farmers because of the onslaught of powerful corporate players further limits the choice of the consumer who is forced to "eat" what is offered and not necessarily what is good for him. Here is a critical commentary on this disturbing trend which is spreading across the world with unabashed capitalism spreading its wings.   

"Just five companies account for almost half of supermarket food sales in the United States. And what about the food those companies offer us? Let's take meat. A meal is not a proper meal without it, at least for 97 out of 100 Americans. Just four companies provide us with 79 percent of our beef, 65 percent of our pork, and 57 percent of our poultry. So, no matter what kind of meat we have for dinner, most likely it comes from the same handful of companies: Tyson,JBS, Cargill, Smithfield. You can never decide which bacon to bring home? Armour, Eckrich, Farmland, Gwaltney, John Morrell, Smithfield – all owned by Smithfield. So, market power is consolidated in the hands of a few multinational corporations. What does this mean for the food we eat and the people who produce it? They explain: Control of our food supply has been wrenched from independent farmers and ranchers in the corporate boardrooms of agribusiness giants. Since 1980, four out of 10 farmers who raise cattle and nine out of 10 who raise hogs have gone out of business.Under this Darwinian survival of the fittest model, control of most production is now in the hands of large corporations. But farmers still raise cows, and pigs, and chickens, right? Yes they do, say the professors, who recently also co-authored Slaughterhouse Blues: The Meat and Poultry Industry of North America, but "most of them don't really own the animals they raise. Virtually all the chickens sold in the United States are grown under production contracts to a handful of companies, who own the birds from egg to supermarket."

It has to be conceded that any investor pumping in money for taking up a manufacturing venture must be assured of a decent return on his capital but this has to happen under an environment where equity is the hall mark with every one, small and big getting equal opportunity. This is not what is actually happening as those with big money invariably buy out the smaller fish with highly tempting terms. Which small investor can resist the temptation of selling his venture if prices offered are 50-150% of the real value? While main stream food production and processing industry has been monopolized by a few giants, it is apprehended that organic food industry, evolved to escape from the risks inherent in most products offered by the modern processing sector, will also be eventually assimilated by the latter through economic aggression. Developing countries must shun such a model and put in place constructive policies and frame works to nurture small enterprises and ensure protection from the marauding poachers. Those countries clamoring for foreign investments in food processing and retailing with open arms, must guard against the transformation of their food sector into the ugly food scenario that predominates in the US where the powerful industry lobby is dictating terms to the government regarding what is good for the citizen!


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