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On April 23, 2020, with the world in the grips of the Covid-19 pandemic and the FAO warning of a looming global food crisis, Nestlé’s shareholders and executives awarded themselves a record dividend payout of US$8 billion. In a time of a global health and food crisis, this handout is worth more than the entire annual budget for the UN’s World Food Programme and would be enough to cover the average annual expenditures on health care for more than 100 million people in Africa.
Nestlé’s massive 2020 dividend payment was, in fact, just a fraction higher than the previous year’s. Such large payouts for shareholders and executives is standard practice for the company— as it is for all the big transnational food and agribusiness companies, even at times of global health catastrophes. Other notable shareholder dividends, announced in April this year, include a US$2.8 billion payout by the world’s largest seed and agrochemical company Bayer AG, a US$600 million payout by the world’s largest poultry producer Tyson and a US$500 million payout by the world’s largest pork company, the WH Group. Cargill, the word’s largest agribusiness company, is on track to top last year’s record payout of US$640 million, which it makes to just a small number of Cargill family members. Increased e-commerce, particularly of food items, during the Covid-19 crisis increased the net worth of Jeff Bezos, the founder of e-commerce giant Amazon, by a shocking US$24 billion. It is even a rich time for the shareholders of smaller players in the industry, like the oil palm and rubber plantation company SOCFIN. The two French and Belgian families that essentially own the company, received EUR20 million (around US$22.5 million) in dividends and remunerations from SOCFIN’s group operations while communities where it operates in Nigeria, Ghana and Cameroon cannot access clean or safe water.
All this greed at the top leaves devastation and little to trickle down to the bottom, where its consequences are deadly.
A powerful industry in the midst of a “perfect storm”
The labourers in the corporate food system, those who are quite literally dying on the frontlines to sustain the lifestyles of shareholders and executives, are not faring well. The supply chains of the big food companies, which have always been dangerous places for workers, have now become hotspots for Covid-19 infections and transmission. Across the world, there have been deadly outbreaks in meat plants, port facilities, warehouses, fish canneries, oil palm plantations, fruit farms, supermarkets and all other points along the chains that these companies command— with the exception of their office towers, of course.
The big meat companies have perhaps been the worst offenders. With the Covid-19 pandemic in full bloom, they aggressively sped up their assembly lines to ramp up exports to China, where meat prices are unusually high. This decision was taken in full knowledge that these increases in processing made social distancing impossible and put their workers and the surrounding communities at risk of mass virus outbreaks. By the end of May, the results in the biggest meat exporting nations were horrific: hundreds of migrant meat plant workers sick with Covid-19 in Germany and Spain, thousands of cases of workers ill with Covid-19 in Brazil’s meat packing industry, and over 20,000 workers infected with Covid-19 in US meat packing plants, with at least 70 deaths. Meanwhile, hundreds of thousands of animals are being culled, under atrocious conditions because these massive plants have had to shut production down, and the small abattoirs that could have taken in the livestock, have long since been forced out of business.
The carnage in Latin America, the new epicentre of the Covid-19 pandemic, has been particularly severe. With the global economy at a near standstill, agribusiness in the region has continued functioning with total impunity, deepening its impact and harm on communities and ecosystems. In almost all the countries in the region, agro-industrial activities have been exempted from quarantine, as they are considered “essential”, even though their focus is on exports, not on providing food to local people.
For example, Ecuador’s government issued a state of emergency decree paralysing the country, but ensuring that “all export chains, agricultural industry, livestock [industry] … will continue to function.” As a result, workers in the banana and palm plantations, seafood factories, flower farms, and many more, were forced to continue working as if the country was not under a health emergency, thereby exposing themselves to the risk of contracting Covid-19.
Similarly, the Bolsonaro government in Brazil declared that the production, transport and general logistics of export food chains were essential activities that must continue functioning without restrictions. In this context, exports of meat, soybeans and other commodities
Commodities
The goods exchanged on the commodities market, traditionally raw materials such as metals and fuels, and cereals.
are surging – as are the numbers of people exposed to Covid-19 along the export chains. In the Brazilian state of Rio Grande do Sul, a meat export hub, more than a quarter of the confirmed novel coronavirus cases in May were among meat plant workers. Labour prosecutors are now fighting to close infested plants and force companies to implement even basic measures to protect and care for their workers during the pandemic.
Brazil’s soybean exports, which are up 38 percent from last year, are another potential hotspot for Covid-19, especially at the ports where trucks and workers are constantly circulating. When the local government of the port town of Canarana in Mato Grosso tried to take action by issuing a decree to pause the export of soybeans and other grains in the absence of proper health and safety conditions, the agribusiness giants Louis Dreyfus and Cargill intervened and were able to reverse the decree within a few days. Canarana is now, in early June, seeing a surge in Covid-19 infections.
All this export frenzy has a tremendous impact on the ground. According to Deter, the real-time detection system of the Brazilian national space research institute, deforestation of the Amazon in Brazil has increased by more than 50 percent in these first three months of 2020 – at the height of the coronavirus pandemic, in comparison to the previous year’s first quarter. Taking advantage of the pandemic smoke screen, with fewer inspection agents able to carry out inspection, agribusiness and mining operations are advancing on protected areas and indigenous territories, increasing the contagion of Covid-19 in indigenous populations. Many observers fear a genocide as a result of these reckless advances of agribusiness and mining operations during the pandemic.
Amidst the national quarantine in Argentina, soybean exports and forest clearings have not ceased either. In one of the most preserved forests in the entire Gran Chaco ecosystem, an area of 8,000 hectares is being prospected for clearing. Furthermore, based on monitoring with satellite imagery, Greenpeace denounced that almost 10,000 hectares were cleared in the North of the country since the lockdown began.
Such brazen corporate profiteering is creating a legitimacy crisis for the corporate food system. Although the lockdowns make it difficult to measure, the ground appears to be shifting: we see workers in the food industry speaking out, organising and getting more support and solidarity from others; we see increasing interest
Interest
An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set.
among consumers in healthy, local foods and the well-being of food producers and farmers; and there’s been an undeniable boom in community-oriented efforts to get food to where it’s needed through solidarity, mutual aid, volunteer work and cooperatives. There’s even been some victories at the policy level, such as the German government’s recent decision to ban sub-contracted labour in meat plants and another to prevent companies taking public aid from paying out dividends.
But this is a powerful industry, with ample amounts of cash and political connections at its disposal, and there is no doubt that it will do everything it can to use this moment of confusion and lockdowns to advance its interests. We have already seen this with the executive order that US President Trump issued at the behest of JBS, Tyson, Cargill and other meat corporations to keep their Covid-infested plants running. We have also seen it in Brazil where the Bolsonaro government approved a record 96 new pesticides in the first months of 2020, more than all the approvals for 2019. The same government deliberately used the cover of the pandemic to try and pass a law that would legalise land grabs and deforestation covering 80 million hectares in the Amazon and Cerrado regions. The pandemic has also been used as an opportunity to rapidly expand e-commerce in food retail and push ahead with Genetically Modified Organisms
Genetically Modified Organisms
GMO
Living organisms (plant or animal) which have undergone genetic manipulation in order to modify their characteristics, usually to make them resistant to a herbicide or pesticide. In 2000, GMOs were planted over more than 40 million hectares, three quarters of that being soybeans and maize. The main countries involved in this production are the USA, Argentina and Canada. Genetically modified plants are usually produced intensively for cattle fodder for the rich countries. Their existence raises three problems.
The health problem. Apart from the presence of new genes whose effects are not always known, resistance to a herbicide implies that the producer will be increasing use of the herbicide. GMO products (especially American soybeans) end up gorged with herbicide whose effects on human health are unknown. Furthermore, to incorporate a new gene, it is associated with an antibiotic-resistant gene. Healthy cells are heavily exposed to the herbicide and the whole is cultivated in a solution with this antibiotic so that only the modified cells are conserved.
The legal problem. GMOs are only being developed on the initiative of big agro-business transnationals like Monsanto, who are after the royalties on related patents. They thrust aggressively forward, forcing their way through legislation that is inadequate to deal with these new issues. Farmers then become dependent on these firms. States protect themselves as best they can, but often go along with the firms, and are completely at a loss when seed thought not to have been tampered with is found to contain GMOs. Thus, genetically modified rape seed was destroyed in the north of France in May 2000 (Advanta Seeds). Genetically modified maize on 2600 ha in the southern French department of Lot et Garonne was not destroyed in June 2000 (Golden Harvest). Taco Bell corn biscuits were withdrawn from distribution in the USA in October 2000 (Aventis). Furthermore, when the European Parliament voted on the recommendation of 12/4/2000, an amendment outlining the producers’ responsibilities was rejected.
The food problem. GMOs are not needed in the North where there is already a problem of over-production and where a more wholesome, environmentally friendly agriculture needs to be promoted. They are also useless to the South, which cannot afford such expensive seed and the pesticides that go with it, and where it could completely disrupt traditional production. It is clear, as is borne out by the FAO, that hunger in the world is not due to insufficient production.
For more information see Grain’s website : https://www.grain.org/.
(GMOs) in Ethiopia and in Bolivia, where the de-facto government claimed that the Covid-19 health emergency made GM seeds a necessity for the country.
Agribusiness as big winner from new wave of structural adjustment
Structural Adjustment
Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).
IMF : http://www.worldbank.org/
Worse is yet to come. Many governments are employing global consulting firms, like McKinsey, to shape their plans to open their economies back up. These secretive firms which are deeply connected to the world’s largest corporations, including those from the food and agribusiness sector, will no doubt influence who emerges as winners and losers from the pandemic responses— workers or bosses, farmers’ markets or e-commerce giants, fisherfolk or the trawling industry.
When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.
As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).
The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
It consists of several closely associated institutions, among which :
1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;
2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;
3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.
As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.
use their Covid-19 emergency funds to push countries into implementing agribusiness-friendly reforms. In the Ukraine, for example, a law privatising farmland was implemented despite the opposition of a majority of Ukrainians. In the coming months, such pressures will escalate. Dozens of countries are heading for defaults, and those debts will have to be negotiated not only with the IMF and bilateral lenders, but also with private creditors who have already indicated that they are not interested in even delaying debt and interest payments during this health crisis. A new wave of structural adjustment is on the way that will focus heavily on increasing foreign agribusiness investment and exports of agricultural commodities to pay off the vultures.
This time, however, governments are going to find it incredibly difficult to impose a new round of agro-imperialism on populations that have already had more than enough of it, and that are increasingly hungering for the alternatives that social movements have been advancing for decades.
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