Earlier this year, the food chain commodity giant, Cargill, got in bed with the organic movement by partnering with the Non-GMO Project. For many in the science-agricultural world, the embrace of this particular pack of green zealots from the organic food lobby is both irrational and incomprehensible. From a cold, hard business perspective, it makes perfect sense (wither social responsibility or ethical standards).
The organic food market is growing rapidly and facing a supply chain crisis that will lead to rapidly increasing prices. You just can’t grow nearly enough organic to feed the bellies of hungry liberals. This is why the American organic lobby are salivating at trade with agriculturally backward countries like Cuba: why European greens are fighting to deny Africa agri-technologies. At the same time:
- most western consumers are frightened to death about imminent cancers from conventional foods (following years of relentless smear campaigns from NGOs and fake journalists funded by Big Organic marketers). They would gladly eat non-GMO/organic if it were a little cheaper and more accessible.
- The main food manufacturers would switch to non-GMO/organic if they could negotiate access to reliable supply at high volumes.
- Food commodity traders are in a tight market environment and would welcome larger categories to speculate on.
This market situation is indeed ripe for exploitation by the first corporate raider with cash on the balance sheet and no shareholders to be accountable to. Enter Cargill!
To make it an even easier exploitative move, the organic food supply chain is presently being managed by a scattered group of ideological hippies with little business capacity and an anti-market, anti-globalist prejudice. Organic lobbyists are locked in a medieval mindset of a farmer bringing his or her food directly to the consumer’s plate. While this dream of rooftop community gardens feeding the homeless is romantic, this is not the trading structure that will allow the organic industry to grow their market segment or even meet present demand (where large-scale cheating with organic labels is occurring).
Cargill has the unique opportunity of being able to enter into the non-GMO/organic food chain, clean up the inefficiencies, harmonise the certifications, impose a global network of organic commodity traders and exchanges, pushing prices down (removing the weak competition) and supply up (widening the market and client base). In the process, this global food conglomerate will also probably dilute the strict organic standards and requirements (something that should have happened decades ago).
For Cargill, this is a no brainer – they will cash in and the affluent western consumer can enjoy “organic” food at a little less of a premium. What’s not to like about this? OK, they will also likely wipe out the African village smallholder agricultural structure, leading inevitably to massive food vulnerability across the developing world. (Cargill is not responsible for cleaning up that mess!)
The activists are right. The present food supply chain is broken and no longer sustainable. The reason for this is that it cannot cope with any further sudden abandonment of agri-technology. Most pesticides on the market are calibrated at such a low, precise dose as to just be able to resist pests and outbreaks. As we have seen with the sudden removal of neonicotinoids, the rise of the cabbage stem flea beetle in some areas like the UK has made it almost impossible now to defend oilseed rape from infestation.
Modern agri-technology has become so precise as to deliver crop safety while avoiding unnecessary inputs or risks and with the coming rise of NBTs and precision farming, it will get even more refined. While this technology is impressive, I can understand how many activists feel vulnerable and wish to move back to the 18th century pre-Malthusian conception of agriculture (or as they call it today: “agroecology”). Any minor disruption to agriculture via weather, removal of technology, infestation or shift in markets and populations can create uncertainties that those who inherently do not trust science and humanity will want to resist.
While agroecologist flower children dream, the opportunists in Cargill scheme!
The organic food distribution revolution Cargill is likely planning is more than a minor disruption – it has the potential to be a nuclear bomb on the present global agricultural model. This will create chaos. As a hedging and commodities trader, Cargill has always profited in times of market uncertainty and price volatility. Their market dominance and capital flow increased impressively during the last wave of famines and food price spikes in 2007-08 (brought about by the folly of the NGO-driven biofuel disruption to the food chain and subsequent land-grabs).
As a privately-held company with cold-hard capitalist-driven objectives, what (and who) would stop Cargill from manufacturing a few famines and price instabilities to increase their market dominance? Certainly not the organic food lobby – those narcissistic zealots would gladly munch on African smallholder seed-corn if it allowed them to flout their socialite superiority.
500 million smallholders vs one company
There are reportedly 500 million smallholders eking out a living in the developing world. The numbers are unreliable but a smallholder is largely a subsistence farmer cultivating a plot of around one hectare which is most often rented or without title. If we assume at least two children and a spouse, then there are at least two billion people or one quarter of the world’s population that live from crop to crop at levels of extreme vulnerability. According to the FAO, four-fifths of the worlds farmers are smallholders in developing countries and most of the developing world’s food supply is provided by them. In cases of disruption (drought, flood, conflict, removal of ag-tech tools), the smallholders are the first to face the crisis and once they leave the land, social, economic and health crises rapidly follow. Frighteningly, smallholders are generally one crop failure away from missing the rent and leaving the land.
Whatever the affluent West can do to improve the smallholders’ condition (better seeds like the brinjal or eggplant, access to effective insecticides, a fair trading system, irrigation and soil management …) will have an immediate positive effect on the local economies, education and social cohesion. Africa did not enjoy the World Bank driven green revolution in the 1970s that helped lift the Asian economies to where they are now. With over a billion people undernourished today, any improvement in the agri-technologies will have both immediate and long-term stabilising effects.
Instead, the organic food lobby is proposing medieval technologies on one quarter of the world’s population … and Cargill is its willing accomplice! This disgusts me!
What Cargill is planning to do to the African smallholder structure will likely decimate a large number of rural communities. Rather than helping agriculture develop, pushing larger farms into strict organic production methods will have a completely opposite effect, creating a disruption that could plague Africa in proportions never seen before.
Role of trading or farming
We are not just talking about a land grab (which Cargill’s planned disruption of the food chain balance will lead to) similar to that of the last eco-folly tied into the African food crises and famines in 2007-2008. This will be a commodity trading disruption where speculators buy and sell futures in various food commodities. This is where Cargill excels and will be able to take dominance should there be a speculative market bubble for organic commodities in times of food crisis. With much lower yields from organic farming, this speculative bubble should not be too difficult to engineer!
In volatile markets, as seen in the last food crisis, speculation exacerbates supply. This is not about farming, feeding communities or providing nutrition to populations; this is not about forward contracts; this is about trading houses, shorts and hedges (but not on corporate debt, minerals, fuels or stock prices). When prices are determined by speculators, and not farmers and consumers, we are no longer talking about agriculture. The livelihoods of hundreds of millions will not be held to the trials of the weather but rather the whims of risk managers in Chicago and Minneapolis.
It strikes me as a bit precarious to have such a global entity as Cargill have such a strong presence in the food production, manufacturing, transportation and trading businesses. In times of crisis, their influence on the levers at various stages in the food chain can easily exacerbate vulnerabilities for their benefit. This is more than just a monopoly of one segment – this is systemic control of a vital global resource – food.
Now Cargill is cosying up to the loudest, strongest food lobby (Big Organic) with Age of Stupid social media campaign tools and weak regulators. That this privately held global corporation is accountable to no one does not reassure me of its responsibility towards the weakest and the poorest communities. Cargill has identified a profitable sweet spot (the organic food market), how to profit from these elites, and by embracing the worst of the worst (The GMO-Free Project), they seem open to the idea of putting stresses on the most vulnerable.
Who is responsible?
At the moment nobody is responsible … and that scares the shit out of me!
Cargill is not beholden to shareholders’ demands for ethical behaviour or corporate social responsibility. As a monster money machine, it is representative of unbridled capitalism which harkens back to the golden age of the industrial revolution (also when William Wallace Cargill set up his first operations).
Policymakers only respond to pressure put on them, and the only ones doing that today are environmental NGOs. These activist zealots want Cargill to make organic cheaper and mainstream – if a couple hundred million Africans starve in the process, that is merely collateral damage in their “war” against the chemical industry.
Big Organic – the retailers and food manufacturers (many now owned by food giants like Danone and General Mills) are not going to get in the way. A high-margin market of loyal, rich consumers in love with their labels … what’s not to like about a cheaper, guaranteed supply chain.
The only people who could maybe stop this madness are western farmers (who see how despicable Cargill has become), African human rights groups and maybe a blogger in Brussels – none of these have any influence as there is no accountability or structure to the global trade in food commodities. Due to its sheer size, Cargill has a virtual monopoly in most markets where they operate.
Therein lies the only route I can see to prevent the looming food crisis catastrophe. Because of their global dominance, Cargill has worldwide contracts with multinational food giants like McDonalds or AB Inbev. I wonder how McDonalds’ clients would feel about their Happy Meal contributing to famines in Africa. Cargill will not listen to reason, conscience or integrity … maybe the threat of the loss of profits from a global client would make those pricks adopt some moral decency.
But seriously, only activists are capable of organising a successful anti-corporate campaign … and these satisfied hippies and flower children have no problem with the situation. I suspect the activists are waiting for McDonalds to come out with an all organic menu – the Big OrganMac. At that point the Risk-Monger is going to take a page out of the José Bové playbook and start firebombing their outlets.
I cannot believe this is happening and all that reasonable people can do is watch!
Does Cargill have an alternative?
Yes but it won’t be profitable (which in Cargill’s world means it won’t be possible).
- campaign for more scientific literacy in the food chain, communicate on the safety and benefits of agri-tech;
- become open champions on expanding GM technology and best crop protection practices among their supply chains (including, especially, developing countries);
- try to use their cosy relationship with Big Organic as a means to demand reasonable thinking and dialogue;
- address the problems African smallholders face from a community-based perspective, and not from a global commodities trading view;
- actually contribute to rural development.
In short, Cargill can adopt a position of integrity.
Until I see some commitment to science and corporate social responsibility, I will consider that 1870s private corporation in the same category as the fundamentalist organic zealots they have chosen to get in bed with.