Trade and food giants A report in January 2005 by Action Aid charged large global food companies…

Trade and food giants

 A report in January 2005 by Action Aid charged large global
food companies with aggravating poverty in developing countries by dominating
markets, buying up seed firms and forcing down prices for staple goods
including tea, coffee, milk, bananas and wheat. Some 30 companies now account
for a third of the world’s processed food, five companies control 75% of the
international grain trade and six companies manage 75% of the global pesticide
market. The report finds that two companies dominate sales of half the world’s
bananas, three trade 85% of the world’s tea
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Trade and food giants

 A report in January 2005 by Action Aid charged large global
food companies with aggravating poverty in developing countries by dominating
markets, buying up seed firms and forcing down prices for staple goods
including tea, coffee, milk, bananas and wheat. Some 30 companies now account
for a third of the world’s processed food, five companies control 75% of the
international grain trade and six companies manage 75% of the global pesticide
market. The report finds that two companies dominate sales of half the world’s
bananas, three trade 85% of the world’s tea and one, Wal Mart, now controls 49%
of Mexico’s retail food sector. It also found that Monsanto controls 91% of the
global GM seed market. Household names including Nestle, Monsanto, Unilever,
Tesco, Wal Mart, Bayer and Cargill are all said to have expanded hugely in
size, power and influence in the past decade directly because of the trade
liberalisation policies being advanced in the US, Britain and other G8
countries. The report accuses the companies of shutting local companies out of
the market, driving down prices, setting international and domestic trade rules
to suit themselves, imposing tough standards that poor farmers cannot meet and
charging consumers more. Many food giants are wealthier than the countries in
which they do their business. Nestle recorded profits greater than Ghana’s GDP
in 2002, Unilever profits were a third larger than the national income of
Mozambique and Wal Mart profits are bigger than the economies of both countries
combined. Retailers such as Tesco, Ahold, Carrefour and Metro are buying
increasing volumes of fruit, vegetables, meat and dairy products in developing
countries, but their exacting food safety and environmental standards are
driving small farmers out of business, says Action Aid.

Question

How might this case be used in the free trade versus
protectionism argument?

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