Small farmers versus oligopolies: No contest
Third-world agriculturists are increasingly at the mercy of large international buying organizations that play off the poor of one country against another. We've seen that happen in bananas, in coffee, and cocoa, and the trend is getting stronger, as documented in a New York Times article today ("Supermarket Giants Crush Central American Farmers", 12/28/04).
The article begins with the sad situation of a cooperative of Guatemalan farmers who managed to sell its produce to Dutch supermarket multinational Ahold (which owns the Stop & Shop and Giant chains in the US among over 5,000 worldwide holdings). But the agreement was a double-edged sword. Ahold demanded tomatoes grown to their specifications, something that the Guatemalan farmers, with no capital to invest in high-end agricultural technology, could satisfy.
Unable to fulfill First World demands in terms of manufactured, standardized food produced in predictable quantities, the farmers were dropped by Ahold, which went shopping elsewhere.
Much as Wal-Mart and Intel set the standards for manufacturing in Asia, keep alive the threat to move to an even lower-cost producer, yet offload risk onto their suppliers, Big Food has done the same to Third World farmers.
But the pressure from the multinationals is growing. According to the Times article:
"Across Latin America, supermarket chains partly or wholly owned by global corporate goliaths like Ahold, Wal-Mart and Carrefour have revolutionized food distribution in the short span of a decade and have now begun to transform food growing, too."
The social impact is great. And the supermarket chains, including Ahold, are not just exporting to other nations; they are also taking over food retailing in the poorer countries, subjecting traditional small-seller markets with standardized products at large supermarkets. This movement is furthest along, notes the article, in Mexico, Brazil, Argentina, and Costa Rica, but it is spreading even to the poorest Latin American countries.
As the article notes:
"In Guatemala, the number of supermarkets has more than doubled in the past decade, as the share of food they retail has reached 35 percent."
What this means that small, subsistence farmers in these countries are being driven out of even the domestic market by larger and larger farms that have the ability to invest and work with some relative parity with the big oligopolies. Even worse, foreign growers now get into the markets of small, poor countries, so that big producers from neighboring countries can push the local farmers of the shelves. The lowering of trade barriers in no way benefits the locals, rather it makes it easier for big companies to ship in "apples from Washington State, pineapples from Chile, potatoes from Idaho and avocados from Mexico." All this is to the detriment of local growers, who are now competing against super-efficient and often subsidized mass producers.
WTO treaties, which were sold as opportunities for small producers from countries with low labor costs to get their products on the world market, have become the means of unloading surplus food production from other countries to poor.
As the article saya, "The changes would not be so troubling if the region's economies were growing robustly and generating decent jobs for globalization's losers." But in fact, it is directing money to local elites, while small landowners get more and more desperate. The US can count own more Central American economic refugees to add to the hordes of illegals already coming in.
Only the big can serve the big; the small need not apply. And global companies wipe our local distinctions in establishing a level economic playing field.
