BigAg
BigProfits
BigProblems

Dateline: 28 June 2008
Updated: 26 April 2013

As the price of gas and diesel fuel soars ever higher, there is a lot of discussion about the huge profits being made by big oil companies. People are angry with the oil companies. People are angry with government. They are angry with oilman politicians like George Bush and Dick Cheney. There is a lot of anger going around.

Well, of course there’s a lot of anger. After all, the traditional American expectation of perpetual prosperity is gradually turning into an economic nightmare. But, unlike a bad dream, this is reality, and a harsh reality at that.

Personally I am far more concerned with the huge profits currently being made by big agricultural industries (BigAg) than I am with BigOil. Food is an absolute necessity for every human on earth. Oil is not.

Food production and distribution is, of course, intertwined with fossil fuels, but not inextricably, Believe it or not, civilization can (and will) survive without an overabundance of crude oil. We have around six thousand years of pre-oil human history to prove that. People are resourceful. They can adapt to such changes. At least some can.

But food is another story. There are currently millions of people in the world facing significant hardship, malnutrition, and even starvation over this matter of food. Why? Because they and their countries are dependent on BigAg’s food, the cost of which is rising at alarming rates. And all the while, the BigAg corporations are making record profits.

Please don’t make the mistake of thinking that industrialized farming and food production is all about feeding the world. That is a serious misconception. The large global corporations that manage the vast majority of food production and the flow of food to markets are not humanitarian agencies. These behemoth corporations exist for the sole purpose of making money. Everyone needs food and the Industrial Providers do not give it away.

Cargill, a major player in the global food oligopoly realized a $2,340,000,000 profit in 2007. That was a 36% increase over the previous year. Cargill has its tentacles on many links of the food chain but receives its greatest portion of profit from commodity trading. In the first 3 months of this year Cargill reaped 86% higher profits over 2007 from its global trading in agricultural commodities. It’s hard to lose money in commodity trading when you have almost monopolistic control over a huge portion of the world’s food supply.

Record profits were also raked in by another BigAg corporation, which also happens to be the second largest grain trader in the world. US based ADM had 2,200,000,000 in profits in 2007, up 67% from 2006. This year’s profits are even higher.

BigAg’s game plan has been to consolidate their control over global food markets by destroying the centuries-old indigenous agricultural systems of every nation, and to make those nations dependents of BigAg. They have done this in recent years through NAFTA, the WTO, and World Bank collusions. To an alarming degree, this takeover of global production and distribution has been successful.

The BigAg corporations have usurped the food sovereignty and security of Mexico, as I wrote about in this essay. They have done it in Haiti, the Philippines, Western Africa, South America, and elsewhere. Through devious manipulations over many years, a cartel of corporations has gained global food control.

Now, as people in these nations can hardly afford to buy food from the Industrial Providers, the food corporations are bringing in their greatest profits. But it isn’t just people in developing nations that are hurting. People in this country are also finding it increasingly difficult to afford food. You already know that.

People the world over are clamoring for governments to help them deal with the food crisis. What will governments do? In many instances, they, and numerous sincere humanitarian agencies, will buy food from the Industrial Providers to give to needy people. But that’s only a temporary expedient, not a lasting solution.

My whole point here (aside from ranting) is to point out that the so-called “green revolution” of industrial farming that so many people look upon with praise and admiration has not been all about feeding the world, as some claim. That’s hogwash.

The “green revolution” which created an agricultural system dependent on big machinery, high debt, pesticides, genetic chicanery, synthetic fertilizers, and massive amounts of fossil fuel, is about the corporate food oligopoly getting maximum control and making maximum profits.

And global food shortages, whether real or manipulated (I’m not entirely sure which it is—probably a combination of both), are being utilized by BigAg to increase their profits. It’s all about BigMoney.

In response to the current world food crisis, some people are calling for a new “green revolution.” Their definition of which is more industrialization, more control by the industrial providers, more dangerous dependency on the cunning Food Masters. This is foolishness to the point of even more extreme dangerousness.

In the final analysis, industrialized agriculture has no viable solution to the problems of world food security. That’s because industrialized agriculture is, itself, the most significant part of the problem. True solutions are not found in predatory and destructive paradigms. Lasting solutions can only be found by going outside the industrial box.

I plan to have more to say about “feeding the world” in an upcoming essay.

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Note: America’s second largest oil company, Chevron, took in 18.7 billion dollars in profits in 2007. The company will make even more this year. I realize that far surpasses the profits of BigAg. But that doesn’t diminish the fact that BigAg makes it’s BigBucks through morally corrupt business practices, and wields far too much power and influence in the world

5 comments:

Andy & Kelli said...

I'm not sold. Profit just isn't a dirty word - it's not a bad thing. Striving for larger profits - if a market will deliver them - is a fundamental component to how free markets operate.
Now - I'll agree that things like confined feedlots, monoculture ag and massive destruction of habitat are bad things that shouldn't continue unchecked... But I also think these BigAg companies can manage the change - it's up to the consume to dictate the terms and direction.
The idea of a corporate moral compass is based solely on the existence of a societal moral compass - which the consumer dictates. The company - no matter how big the profit - still exists in the context of the society.
If you have ever been around a food distribution hub - and seen the quantity of goods that move through - the scope of variables needed to consider to find a solution becomes overwhelming.
Is the system perfect - nope. Should it be refined / adjusted / changed - sure, all systems should be part of a cycle of continuous improvement. Is the system fundamentally flawed - and in need of complete reform - I don't know... but I can tell you in a year where the heartland of this country is underwater (literally) and the reports suggest that this will still be a good year for a corn harvest - someone - somewhere - is doing something right.
Visit us at Bluebird Meadow farms

Clint said...

Part of what I do is grow corn and soybeans, most of which is sold to an ADM riverterminal and ADM processing facility. I sell to whomever is offering me the most money. I would be happy to sell to a smaller, more local manufacturer or direct consumer if they were willing to even buy whole grain from me at all.

Very few people buy whole grain to grind for themselves or the public. Therefore, ADM will keep buying it, and either milling it or shipping it around the world.

There are some exceptions. I grind grrain for my personal use and I know a few more people who do also. And there is a little private hydro-powered mill on a creek in Tennessee that bought 6 bushels from me to grind and sell to the public.

http://www.tennessean.com/apps/pbcs.dll/article?AID=2008806010308

Herrick Kimball said...

andi & kelli-
Yeah, I used to think that about making a profit and free markets too. But we aren't talking about some small scale business here. We're talking about something extremely huge, predatory and destructive. The global food corporations have monopolistic control over the food supply system to the world. That's not a free market. You speak glowingly of this global corporate elite because you are not feeling the effects of their subterfuge like the masses of poor people in the rest of the world. The poor consumers facing malnutrition and starvation in the Phillipines, Haiti, Mexico and other underdeveloped nations do not dictate anything to these Industrial Providers. And neither do you. Do you understand what I wrote about these corporations making their greatest profits from commodity trading? They are not producing or creating or distributing a good or service when they trade commodities. They are speculating and driving the price up and pocketing massive profits. They have monopolistic control and play the market and they can't lose. The only people who lose are the people who have to pay more for the food. This is not ethical business. It is playing with people's lives. It matters not to me if you "buy it." But I guarantee you that if you were a poor Mexican farmer, displaced by BigAg's devious market strategies and dependent on its ever-more-expensive corn to feed your family, you would not feel the way you do.

Anonymous said...

The Distributists had it right. Belloc and Chesterton... Fr. Vincent McNabb... I know most here are not Traditional Roman Catholics (I am), and this economic system was spawned from those roots... But is was meant to be universal, for all Christians... regardless of denomination... It could work... The current economic models are certainly questionable, if one looks at them through the ministry of Christ and His Word.... Gospel Poverty... is not part of this world system... nor is it pro-family... Christian... in many respects... Herrick - your response is spot-on. I know you have brought up Distributism before. Worth a closer to look to all readers... Great blog. God Bless you and your family. You are living my dream. I hope to "Flee to the Fields" soon... God-willing... to protect my family from the madness of secular materialism.... Take a look at the pseudo-porngraphy at the check out tills of your local grocers next time you go shopping... Why do we expose our children - ourselves - to this rubbish?? Again... Flee to the Fields.... Suburbia is not the best place to raise children... Just my two cents, from the Great White North!

Anonymous said...

Something to consider. "BigOil" pays 40-50% in corp. income tax plus the tax/gallon we pay to buy it. BigAg gets gov't subsidies to continue their uninsured, inconsiderate practices. We (the US gov't) subsidies what we can provide, and tax what we can't. Our taxes allow the commodities from "BigAg" to be sold/speculated on the world market at below cost values. We are all getting (what is the moral word to use?) who pay taxes AND buy grocery food. UGH!

Sickening to me my friends. After seeing things from this summer, I wish my garden wasn't so filled with weeds. Time, wish there was more. And Ethonal = Wasteful gov't supply depreciation.

Troy,
Dexter, MN