Agribusiness Downstream From the Third World Farm: Anything They Can Do We Can Do Better
When we looked at the US food system we saw that the part of the chain between the farm gate and the consumer is the one where the most value is added and the most money made. Space even for a short history of the multinationalization of US national food firms that has taken them from Canada to Europe to the UDCs is lacking here but is not necessary since it has been well done by others.74
People interested in the current geographical distribution of agribusiness may refer to Who Owns Whom or other standard company directories. The UN Center on Transnational Corporations is also doing valuable work on food processing firms set up in the Third World and has established a classification system for situating their activities. A company may begin with sales in a UDC of processed foods manufactured elsewhere and imported; it may then move on to the procesing in UDCs of imported raw materials. The "mature" stage will involve processing of the host country's own raw materials for local sale but especially for export.
Brazil and Mexico are invariably the first targets US agribusiness picks in the Southern hemisphere because of proximity to Northern markets, the existence of prosperous middle and upper classes able to compete with consumers in the rich countries and a long tradition of warm welcome for US capital. After Latin America, US MNCs generally proceed to Asia and, much later, to Africa—the continent with the least multinational investment. European and Japanese food firms tend to head first for their former colonial areas.
As noted in the last chapter, the trend is toward the ‘satellite’ project in which local farmers furnish the agricultural raw materials to a central shipping or processing point. They may be supplying fresh, airfreightable produce (e.g. the House of Bud in Senegal); traditional cash crops (Gulf & Western sugar operations in the Dominican Republic; the tea-growing Rwandans); or non-traditional cash crops (LAAD-sponsored vegetable or beef processing projects in Central America). Depending upon the affluence or the poverty of the local market, greater or lesser parts of the satellite-processed produce will remain on the spot or be disposed of on the world market.
Here I prefer to concentrate on aspects of the chain "downstream" that are perhaps less well known; readers are again referred to my book and to other sources listed in the notes for examples of agribusiness processing activities. The essential point has already been made—money is the magnet that draws food. Either land once devoted to cheap staple food for people is converted into land producing animal feed crops, or local farmers are induced to grow not for local consumption or even for self-provisioning, but for the national or international market. Food becomes nothing but merchandise, and the surprising thing is not that so many people are undernourished but that farming still actually feeds as many people as it does. From present trends, it seems fair to state that agriculture will continue to feed a minority of people better and better with more expensive calories and that concomitantly more and more non- participants in the system will go hungry.