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«edited by Jennifer Clapp and Doris Fuchs The MIT Press Cambridge, Massachusetts London, England © 2009 Massachusetts Institute of Technology All ...»

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Corporate Power in Global Agrifood


edited by Jennifer Clapp and Doris Fuchs

The MIT Press

Cambridge, Massachusetts

London, England

© 2009 Massachusetts Institute of Technology

All rights reserved. No part of this book may be reproduced in any form by any

electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher.

This book was set in Sabon by SNP Best-set Typesetter Ltd., Hong Kong. Printed and bound in the United States of America on recycled paper.

Library of Congress Cataloging-in-Publication Data Corporate power in global agrifood governance / edited by Jennifer Clapp and Doris Fuchs.

p. cm.—(Food, health, and the environment) Includes bibliographical references and index.

ISBN 978-0-262-01275-1 (hardcover : alk. paper)—ISBN 978-0-262-51237-4 (pbk. : alk. paper)

1. Farm produce—marketing. 2. Agricultural industries. 3. International business enterprises. 4. Globalization. I. Clapp, Jennifer, 1963– II. Fuchs, Doris A.

HD9000.5.c67 2009 382'.41—dc22 Agrifood Corporations, Global Governance, and Sustainability: A Framework for Analysis Jennifer Clapp and Doris Fuchs Fundamental changes have taken place in food systems around the world over the past century. We now have a globally integrated food system that affects all regions of the world. The recent volatility in food prices has illustrated the global nature of this food system, highlighting the ways developments in one part of the world can have multiple and wideranging impacts. Transnational corporations (TNCs) have been central actors in the development of this global food system. They dominate the production and international trade in food and agricultural items, and are also key players in the processing, distribution, and retail sectors.

Indeed, it is unlikely that the current global food system would exist as it does today without the participation of TNCs. Many of these firms operate in numerous countries and at more than one level along the global food chain. As food systems around the world become increasingly affected by the corporate-dominated global food system, we must pause to consider the consequences of this fundamental change in the provision of our food.

The international governance of the food system is geared toward providing some degree of regulation to put in place safeguards from potential negative socioeconomic and ecological consequences of a globalized food system. In many ways these rules govern activities of agrifood corporations, because these actors are pivotal agents in the globalization of the food system. But at the same time, these corporations play a key role in the establishment of the very rules that seek to govern their activities. This includes influence over state-based and intergovernmental mechanisms of governance, as well as privateforms of governance. This situation raises important theoretical and policy questions about the impact of corporate influence on the sustainability—environmental as well as economic and social—of the global food system and the rules that govern it.

2 Jennifer Clapp and Doris Fuchs This book examines several key questions about the role of corporate actors in the global food system. First, we ask what role corporations are playing in the formation of the norms, rules, and institutions that govern the global food system. In answering this question, we examine the various facets of power that corporations exercise in an attempt to influence rules by which they themselves must ultimately play, including both state-based and private forms of governance. Second, we ask about the wider implications of corporate power in global food governance for the sustainability of the global food system as well as for societal debates over sustainability in the global food system. In particular, we examine the ways corporations use and influence the definition of the concept of sustainability in their exercise of power in global food governance in relation to other actors and other interpretations of the concept.

This book sits at the intersection of two emerging literatures on TNCs.

Recent years have seen a growing body of scholarship on transnational corporations as actors in global governance (Fuchs 2007a; Cutler, Haufler, and Porter 1999; Cutler 1999; Sklair 2002). Grounded primarily in political science and international political economy, this work examines the political role of corporate and business actors in the establishment and implementation of norms, rules, and institutions governing international political and economic interactions. Power, authority, and legitimacy are central themes to this work. At the same time, a literature has emerged on the role of TNCs in the global agrifood system (see, for example, Glover and Newell 2004; McMichael 2005; Lang and Heasman 2004; Magdoff, Foster, and Buttel 2000; Heffernan 1998; Bonanno et al. 1994). Grounded primarily in sociology and political ecology, this literature examines the implications of growing corporate activity in the food system. The impacts of corporate concentration and market domination on society and the environment have been key themes in this literature.

Both of these literatures have been important in advancing our understanding of TNC activity in the global sphere. Yet while both focus on TNCs as actors in the global political economy, there has been little cross-referencing between these two literatures. As such there has been little academic work that specifically examines the political role that corporations play in efforts to govern the global food system. The literature on corporate actors in global governance has not yet examined the food and agriculture industry in any significant depth. The literature on TNCs in the food sector has focused on market power, with an implicit Agrifood Corporations, Global Governance, and Sustainability 3 assumption that economic dominance translates into political clout.

Market power is certainly important, but it does not capture all of the facets of power that corporations can exercise in their bid to shape the rules of the game. Given the current instability in the global food system and the central role TNCs play in it, there is an urgent need for much more systematic and comprehensive analysis of the political role that corporate interests play in global food governance.

The framework we develop here identifies different channels through which corporations influence global food and agriculture governance and examines the implications of that influence. By focusing on the intersection of TNCs and global food governance, the book aims to build on the existing literature on TNCs and the global food system, as well as on the conceptual literature on the role of corporations in global governance more broadly. A crucial contribution of this book is to unpack the complex relationship between the exercise of power and the use of the concept of sustainability in the governance of the global food system.

Following a discussion of the rise of TNCs in the global food system more broadly, this introductory chapter presents a conceptual framework to help explain the role and implications of transnational corporate involvement in the global governance of food and agriculture. The case studies presented in this book have been selected to allow as comprehensive an understanding of corporate involvement in global agrifood governance as possible. They include investigations of corporate influence with respect to standard setting by retail corporations, international food safety standard setting, food aid policy, regulation of genetically modied organisms (GMOs), global biosafety governance, and trade-related intellectual property rights rules. With this theoretically founded and empirically comprehensive approach, this book seeks to make significant progress in our understanding of global agrifood governance and the role of corporations in it.

Corporate Actors and the Rise of a Global Food System

The international trade in certain food and agricultural items has characterized food systems for centuries. But the truly global scale of production, trade, and marketing of food and agricultural products that we have today really only developed in the past fifty years (e.g., Busch and Juska 1997; Magdoff, Foster, and Buttel 2000; McMichael 2000, 2005;

4 Jennifer Clapp and Doris Fuchs Weis 2007). National food economies are increasingly integrated into a global food system founded on ever-growing volumes and value of agrifood trade. Although the share of agricultural trade in world merchandise trade declined between 1980 and 1997 from 17 to 10 percent (Ingco and Nash 2004, 5), the markets for global food and agriculture products have grown markedly in absolute terms, and have become much more globally integrated. There was a significant increase in the value of global agricultural trade overall during this period as well. The FAO reports that international agricultural trade is expanding more rapidly than world agricultural output (FAO 2005, 12).

At the same time that international trade in agricultural products has grown, there have been shifts in its makeup both in terms of countries and products. Over the 1971–2001 period, the growth in food imports was most marked in developing countries, which saw a rise of 115 percent, compared to developed countries with a rise of 45 percent (FAO 2004, 16). Developing countries were net agricultural exporters in the 1960s, but now are net agricultural importers (FAO 2004, 14).

Since the early 1980s, trade in processed food also has grown more quickly than trade in bulk commodities. Today, trade in processed food products accounts for some 66 percent of agricultural trade (FAO 2004, 26).

Parallel to the growth in agricultural trade has been a growing participation of TNCs in the food and agriculture sector (Heffernan 2000;

Murphy 2006). Indeed, global trade in food and agricultural products takes place largely among TNCs (FAO 2003). In the mid-1970s, there was heightened concern over the increasingly global scope of the grain trade and the power of corporate players in that trade (Morgan 1979).

Since that time, corporations have diversified into multiple facets of the food sector, including commodity trading, food processing and retailing, as well as seed and agricultural chemical production (FAO 2003). TNCs have been central players in the global integration of the food system.

They have stretched their operations both vertically and horizontally, to the point that it no longer makes sense to speak of national food systems because the agrifood TNCs are so globally integrated in their operations (Heffernan 1998). As part of this globalization process, agriculture and food have become commodified through complex and global production chains dominated by TNCs, which demand durable products and thrive on distance, both social and physical, between the production and consumption of food (Friedmann 1993, 1994; Kneen 1993).

Agrifood Corporations, Global Governance, and Sustainability 5 In the industrialized world—and increasingly in the less industrialized world as well—a growing proportion of the food people eat has an international and corporate dimension. At least one of the steps in the food chain– from production, trade, processing, and packaging to retailing—is typically overseen by a major food corporation (see Lang and Heasman 2004). Moreover, the liberalization of foreign direct investment rules in developing countries in recent decades has facilitated the rapid expansion of supermarkets in the global South, most of which are owned by major international retail corporations. This shift toward truly global supermarket retailing has meant more concentration in the procurement and distribution of foods in both rich and poor countries (FAO 2005, 21–22; Burch and Lawrence 2007; Konefal, Mascarenhas, and Hatanaka 2005).

Indeed, corporate involvement at all stages along the food production chain (inputs, production, commodity trade, processing, and retailing) has become much more concentrated in recent years (Heffernan 2000).

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