Market

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Showing posts with label third world countries. Show all posts
Showing posts with label third world countries. Show all posts

Thursday, February 21, 2013

THIRD WORLD COUNTRIES-THE NEW TARGET OF GLOBAL FOOD GIANTS

Is the experience of consumers in rich countries like the US of any guidance to developing countries and emerging economies in the realm of processed food and its relation to citizen's health? One single lesson that may have very high relevance will be to keep away processed foods as being churned out in wealthy countries like the US as much as possible if consumer health is not to be compromised. If over weight, obesity, CVD, cancer, blood pressure and other life debilitating illnesses are any indication of the health of a nation, developing countries are much better off, probably because of relatively low intake of commercial foods from the industry as a part of their diet. It is now being reported that giant food companies that control almost in fifth of world market for processed foods are feeling the pinch in expanding their business in most wealthy countries with practically zero population growth and almost saturated markets. To overcome the present business stagnation, multinational companies are targeting countries like China, India and other neo-economic powers to make their over riding presence in the coming years. Here is a take on this disturbing development which must concern all those interested in safeguarding their health.

Moodie and colleagues say that the food and drink industries should be treated like the tobacco industry - as companies with too much of a vested interest in the sale of unhealthy products to help curb the epidemic of disease. They must have no role in the formulation of national or international policy, they say. "Regulation, or the threat of regulation, is the only way to change these transnational corporations. The industry must be put under pressure if it is to change." The researchers were unable to find any health benefit to industry involvement in voluntary regulation or public-private partnerships. Industry documents, they say, reveal how companies shape public-health legislation and avoid regulation. They build "financial and institutional relations" with health professionals, non-governmental organisations, and national and international health agencies, says the paper. They distort research findings and they lobby politicians to oppose health care reform. Huge multinational companies dominate sales worldwide. "The frequently used term 'competitive market' suggests a wide variety of traders; however, the most powerful corporate sectors of the world's food system are increasingly concentrated to the point of oligopoly. "For example, in the USA, the 10 largest food companies control more than half of all food sales. Worldwide, this proportion is about 15% and is rising rapidly. More than half of global soft drinks are produced by large transnational companies." The multinationals are now moving in on the developing world, the researchers say. "Saturation of markets in high-income countries has caused the industries to rapidly penetrate emerging global markets, as the tobacco industry has done. Almost all growth in the foreseeable future in profits and sales of these unhealthy commodities will be in low-income and middle-income countries [where consumption is currently low]."

Recent aggressive action of multinationals like Walmart and others in gaining entry to India is primarily due to the above perception and it is sad that pliable governments are succumbing to this strategy without realizing the long term consequences of allowing these predators into their country. In theory there is no harm in providing a free environment to all players engaged in food manufacture but in practice food ventures need large investments and gestation periods to become viable. Most local entrepreneurs with limited resources are bought out eventually creating a virtual monopoly shared by a few foreign players. With weak kneed safety policing regime in countries like India, these MNCs become "Lord of all they purvey" with no control on them! It is time people hold the government and the governing class responsible for such unhealthy policies and bring some sanity in promulgating consumer friendly policies.





V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

Friday, January 13, 2012

CAN GLOBAL FOOD "GIANTS" HELP REDUCE POVERTY IN THE THIRD WORLD?

The 21st century is expected to be dominated by the poor and famished farmers of the third world because many global food processors need precious raw materials for their manufacturing programs which cannot be met entirely from their patrons in the wealthy nations. While country to country exports do involve many developing countries which are strong in some agricultural produce, the new initiative by some of the internationally strong branded products manufacturing companies to tie up with farmers and farmer organizations for direct access on a long term is a welcome development. Whether it is due to supply compulsions or genuine desire on the part of these MNCs to help the farmers of the third world countries is immaterial as long the latter is benefited. Many developing countries in Asia, Africa and South America are expected to benefit from the new perception on the part of the big food industry players. One can only hope that the new relationship will be of longer duration based on mutual respect and appreciation rather than the old colonial mindset. 

"While governments and non-profits have a critical role to play in reducing poverty and hunger around the world, it is becoming clear that the global food and beverage companies may have an even stronger hand to play. The sector is powerful and highly concentrated with a just a few companies controlling thousands of brands around the world. Nestle, once a mere chocolate company, is now the world's largest food and beverage company with 6000 brands including coffee (Nescafe), breakfast cereals (Cheerios), and nutrition bars (PowerBar). Kraft Foods sells snacks in 170 countries, including brands such as Nabisco and Cadbury. PepsiCo is now a larger "food" company than a "beverage" company with global brands like Frito-Lay and Quaker Oats. These global companies are buying the ingredients (corn, rice, wheat, cocoa, etc.) for food products on an enormous scale, but not from small farmers in the developing world who make up the majority of the world's poor. They turn, instead, to farmers in Australia, South Africa or the U.S. -- rather than their counterparts in Ethiopia, Haiti or South Sudan. Thus, poor farmers lack dependable buyers that could give them fair prices and a consistent market, helping them and their families out of poverty. Given that subsistence farmers comprise 70 percent of the world's poor, improving their income is our best strategy for reducing global poverty".

The new trend in leasing of land in the third world countries for agricultural activities is like a double edged sword that can be dangerous or beneficial depending on the conditions of lease. While using the land in third world countries exclusively for 100% export may attract criticism if the local population is starved of food, it can be a boon in raising the land productivity to unimaginable levels by using modern techniques of cultivation. The contract system of engaging farmers to raise particular crops for dedicated use by the industry giants on a long term basis can be another route for boosting farmer incomes in the lessee country besides receiving high quality inputs and training for producing crops of particular specifications required by the manufacturers. It is imperative for western nations that they engage the developing countries in genuine partnership through mutually beneficial organizational linkages on a long term basis.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

Friday, November 6, 2009

AGRICULTURAL SUBSIDY-BARRIER FOR FREE TRADE


Agricultural subsidy is often being blamed for the distortions in the global trade with heavily subsidized western farmers offering many commodities at ridiculously low prices in the international market affecting the exports of third world countries. The WTO negotiations for a truly free world trade without barriers are stalemated because of the reluctance of developed nations to withdraw the subsidy regime to provide a level playing field for all the countries for equitable and fair system of trading that transcends national boundaries. The relative insensitivity on the part of many rich countries to this issue is reflected by continuing plans to protect their farmers through more subsidies to overcome the economic recession.

The butter 'mountains' and milk powder 'mounts' that characterized the European agricultural scenario in the last millennium are set to return if the latest proposal by EU for extending economic protection to the dairy producers in the constituent countries does materialize. "Europe's agriculture commissioner today bent to pressure from a majority of EU states and agreed to create a €280 million fund to be used to help dairy farmers cope with the impact of low prices".

Waiving of the rules for direct national subsidy enabling the individual governments to give cash relief of Euro 15000 to each dairy farmer is a move fraught with some serious implications. If these proposals are put into practice, over production of butter and milk powder is a sure possibility and such an action will further destabilize world trade in dairy products for decades to come with grave consequences to the fate of third world countries. Flooding these countries with cheap dairy products is bound to depress market prices in the importing countries and local producers will be the sufferers due to non-remunerative prices for their product. WTO must step in to stop this "atrocity"!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com