IntroductionFood has gone global. Farming hasbecome increasingly intensive, largescale and globalised in the drive forcheaper food. Advances intechnology and communicationshave combined with falls in the costsof transport to transform the way inwhich food is sourced. The additivesindustry is finding ever moreingenious ways to cutmanufacturers’ costs and increasetheir profits. The concentration ofpower in retailing and foodprocessing has affected those at theother end of the scale, namelyfarmers in LEDCs and small farmersin MEDCs. Increasingly, modernfarming methods are having anegative impact on the environmentand on the trafficking ofpopulations.

In the last 50 years a revolution hastaken place in the food industry.Every step of food production – howit is grown, harvested, processed,distributed, retailed and cooked –has changed. Until the SecondWorld War farmers were the majorplayers in the food industry. Afterthe war they were given grants andsubsidies, but these were merely tostop them going out of business.They were supported as long as theyrestructured. Many thereforeintensified, increased efficiency andadopted labour-saving technologiessuch as agro-chemicals, machineryand high-yielding varieties (HYVs)of plants.

Fifty years later some of thesubsidies are being cut. While‘farmer power’ has decreased in thelast 50 years, the power of retailersand food processors has increased.The rise of large food processingcompanies has been phenomenal.The market share of the top 20 USfood manufacturers has doubledsince 1967. Just 100 companies nowaccount for 80% of all value addedi.e. the increase in price over andabove the raw farm food prices.

The level of manufacturingconcentration is also remarkable, atregional, national and global levels.In the mid-1970s the top four USbeef packers controlled about 25% of

the US market. Today just fourfeedlots feed half the cattle in theUSA and these are directlyconnected to the four processingfirms that control over 80% of beefprocessing. It is a similar tale withagro-chemicals. In the late 1980s thetop 20 firms accounted for 90% ofsales. By the late 1990s 10 firmscontrolled 90% of sales.

Economic impactsIn the 1950s, of every £1 spent onfood and drink 50-60% went to thefarmer. Today, just 9% of every £1spent on food and drink goes back tothe farmers. Britain’s food market isdominated by five big supermarketgroups: Tesco, Sainsbury’s, Asda,Morrison’s and Somerfield (Figure1). The combined profits of the topfour supermarkets was £2.1bn in2000. Approximately half of theUK’s food is now sold from just 1000giant stores. The top 20 food brandsin the UK spend over £100 million ayear on marketing. In the USA $30billion is spent on advertising by USfood industries. The world’s topglobal food retailers have hugeturnovers (Figure 2). Despite theincreasing power of manufacturersand retailers, it is likely to beconsumers that drive the food‘chain’ in the future.

Food and drink is the largestmanufacturing sector in the UK. Itaccounts for over 14% ofmanufacturing output and has anannual turnover of over £66 billion.Some 470,000 people are employedin food and drink manufacturing.

In the USA, over 13,000 new fooditems are launched each year to addto the 300,000 already available. InEurope over 10,000 new products arelaunched each year but over 90% failto survive a year. Only a minority offood brands and products willbecome global products and join theranks of Nestle, Pepsi, Coca-Cola,Kelloggs, Heinz and Mars (Figure3). Of all the world’s top 50consumer brands, food accounts fora fifth.

The global food industry has amassive impact on transport. Fooddistribution now accounts for

between a third and 40% of all UKroad freight. The food system hasbecome almost completelydependent on crude oil. This meansfood supplies are vulnerable,inefficient and unsustainable.

Between 1978 and 1998, the distancefood was transported increased by50%. Transporting animals longdistances to slaughter has made italmost impossible to contain

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Globalisation of food production

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Tesco 25.5%

Sainsbury 17.4%

Morrison’s 16.1%

Asda 15.8%

Somerfield 5.7%

Figure 1: The top 6 UK food retailers

(Adapted from Taylor Nelson Sofres)

1 Wal-Mart (US) €199 billion

2 Carrefour (EU) €86 billion

3 Ahold (EU) €53 billion

4 Kroger (US) €51 billion

5 Metro (EU) €47 billion

6 Albertson’s (US) €39 billion

7 Kmart (US) €39 billion

8 Rewe (EU) €36 billion

9 Tesco (EU) €34 billion

10 Aldi (EU) €33 billion

Figure 2: The world’s top ten global foodretailers

(Source: Cap Gemini Ernst and Young)

Figure 3: The top 10 global foodmanufacturers (total food sales US$billion)

1 Nestle 46.6

2 Philip Morris (Kraft) 38.1

3 Con Agra 27.6

4 Unilever 26.7

5 PepsiCo 25.1

6 ADM (corn milling) 23.5

7 Tyson (meat processing) 23.4

8 Cargill 21.5

9 Coca-cola 20.1

10 Mars 15.3

(Source: Global Food Markets Leatherhead FoodInternational)

outbreaks of serious diseases such asfoot and mouth. Journeys of 200-400miles to slaughter are not unusualfor animals today The averagejourney to abattoir has beenestimated at 100 miles. In order to betransported long distances food mustbe heavily processed, packaged, orchemically preserved.

Unfair tradeIn 2002 Wal-Mart, the world’slargest retailer, which owns Asda inthe UK, renegotiated its bananabuying. It invited the biggestdistributors to bid for a global

contract to supply its stores inseveral countries. Del Monte,sourcing in Latin America, won alarge chunk of the contract andbecause of the scale, agreed a dealwhich enabled Wal-Mart to slash itsprices. Bananas fell from £1.08p perkilo in August 2002 to 81p at the endof March 2003.

The event illustrates some of theglobal forces that have transformedthe food chain. By the end of the1990s, three-quarters of worldbanana trade was in the hands of justfive companies: Chiquita (26%),Dole (25%), and Del Monte, Fyffesand Noboa, (8% each). Between 1990and 2000 the value of banana exportsfrom the Windward Islands fell from$387m to $161m.

Since the Second World War, aseries of trade talks sought to removebarriers to trade by lowering tariffs.From 1947 to 1994 the GeneralAgreement on Tariffs and Trade(GATT) was the forum for globalnegotiations. The World TradeOrganisation (WTO) was establishedin 1995, at the end of the UruguayRound of GATT talks, which wereheld between 1986 and 1994. It isnow the forum for negotiatinginternational trade rules. Agriculturewas included in the original GATTtalks, but the Uruguay Round’sagreement on agriculture specificallycommitted countries to lift traderestrictions and abolish distortingsubsidies within food production.This has not happened.

LEDCs have been forced to open uptheir markets while rich western

countries have kept their quotas andcontinued to subsidise theiragriculture. The terms of trade areunfair - poorer countries are paidlower prices for their productsrelative to their imports. Richcountries spend over $300 bn a yearsubsidising their farmers. The EU’sCommon Agricultural Policy, whichsubsidises farmers in the EU, costseach family of four in Britain £16 aweek in higher taxes and food prices.These subsidies have a devastatingeffect on developing economies.They encourage over-supply, whichleads to low prices and dumping.

Changing suppliers: the riseof VietnamIn 1990 Vietnam produced very littlecoffee. In the 1990s, encouraged bythe World Bank and InternationalMonetary Fund to restructure itseconomy, open up its markets andinvest its energies in generatingforeign exchange, Vietnam began anaggressive programme to encourageits farmers to move out of domesticproduction of rice (the price ofwhich was volatile, thanks in part todumping of subsidised harvests fromthe US) and into growing cash cropsfor export, particularly coffee.

Vietnam is not ideally suited tocoffee production and nearly all itscrop is of the lower quality robustatype used for instant coffee, ratherthan the arabica beans which fetchtop prices. But with the heavy use offertilisers and pesticides, by 2000 ithad turned itself into the secondlargest coffee-producing country inthe world. It was so successful, infact, that it flooded the market justas the Brazilians were also increasingtheir yields as a result of increasedintensification and mechanisation.

From rainforest to chickennuggetsAccording to a report byGreenpeace, a small number of theworld’s largest food companies andcommodity traders, includingMcDonald’s in the UK, are drivingillegal and rapid destruction of theAmazon rainforest.

The report, a six-year investigationof the Brazilian soya bean industry,investigated a 7,000 km chain thatstarts with the clearing of tropicalrainforest by farmers and leadsdirectly to Chicken McNuggets

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Figure 4: Geography of a Christmas dinner

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ThailandPoultry

17,000 km

ZambiaRunner beans

8,000 km

SpainCarrots

1,600 km

UKSprouts200 km

Italy Potatoes 2,400 km

ZimbabweMange tout8,000 km

The wastefulness of a Christmas dinner

The ingredients of a traditionalChristmas meal bought from asupermarket may have cumulativelytravelled 24,000 miles, according to areport, ‘Eating Oil’. Buying theingredients for Christmas dinner in aLondon supermarket, the report foundthat poultry could have been importedfrom Thailand and travelled nearly17,000 km, runner beans came fromZambia (nearly 8,000 km), carrotsfrom Spain (1,600 km), mangetoutfrom Zimbabwe (over 8,000 km),potatoes from Italy (2,400 km), andsprouts from Britain, where they weretransported around the country beforereaching the shop (200 km) (Figure4). By the time trucking to and fromwarehouses to stores was added, thetotal distance the food had movedwas over 38,000 km, or the equivalentof travelling around the world once.Transporting ingredients such greatdistances makes food suppliesvulnerable.

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being sold in British and Europeanfast food restaurants. It also allegedthat much of the soya animal feedarriving in the UK from Brazil is aproduct of ‘forest crime’, and thatMcDonald’s and Britishsupermarkets have turned a blindeye to the destruction of the forest.

The Greenpeace report detailed howthe world’s largest private company,the £40 bn a year US agribusinessgiant Cargill, built a port and 13 soyastorage works in the Amazon region.In two years, deforestation ratesdoubled to 28,000 hectares (69,000acres) a year, land prices rocketedand soya took off as farmers from allover Brazil arrived to take advantageof guaranteed markets. Cargillprovides farmers with seeds andagrochemicals to grow hundreds ofthousands of tonnes of beans a year,which the company then exports toLiverpool and other European ports,mainly from Santarem, on theAmazon river.

From Liverpool, much of the high-protein soya, which is used as animalfeed, goes to Hereford-based SunValley, a wholly owned Cargillsubsidiary that rears chickens. Thecompany provides McDonald’s, thelargest fast food company in theworld, with up to 50% of all thechicken it serves in Britain andacross Europe.

According to Greenpeace, public andindigenous land is being seized byfarmers using bulldozers and evenslave labour. In 2005 more than25,000 sq km of Amazon forest werefelled, largely for soya farming.

Social impactsThe food and farming industry inthe UK is dependent on migrantlabourers. 25,000 people are allowedto come to the UK under thegovernment’s seasonal agriculturalworkers scheme. However, 50,000are needed, according to thegovernment’s policy commission onfood and agriculture. The need forlabour is no longer confined toseasonal peaks, but is year-round.Sunday trading, long opening hoursand constantly changing ordersmeans that workers are needed atshort notice and for unsocial hours.

In parts of Kenya, for example,many of the labourers on theintensive vegetable farms and in thepacking factories producing food for

export to the UK are women whohave migrated for work. They canwork more than 12 hours a dayharvesting and grading beans,carrots, baby corn and other produceto fill the crates destined for MEDCsupermarkets.

Improved yields andenvironmental impactsIn the last 50 years, wheat yields haveincreased from 2.6 to 8 tonnes perhectare, barley from 2.6 to 5.8 tonnes,and each cow produces twice as muchmilk.

Cleaning up the chemical pollution,repairing the habitats and coping withsickness caused by industrial farmingcosts up to £2.3 billion a year (Figure5). It now costs water companies£135m-£200 million to removepesticides and nitrates from drinkingwater.

Food processors usually want largequantities of uniform quality produceor animals at specific times. This isideally suited to intensive farmingmethods which favour syntheticchemicals, land degradation andanimal welfare problems.

Animals are reared on productionlines. About 750 million broilerchickens are reared and slaughtered inBritain each year, 98% of themintensively. They spend the last weekof their lives in a space the size of anA4 sheet of paper. The spread ofdisease is a problem In two decades,new production methods haveincreased a dairy cow’s average yieldfrom 4,000 to 5,800 litres a year.

The UK now imports four out of everyfive pears consumed. Cox’s apples

receive an average of 16 pesticidesprays. Lettuces can come from Spain,Turkey, Zimbabwe and Mexico aresprayed on average 11.7 times.

Air pollution and greenhouse gasemissions from farming cost morethan £1.1 bn annually. About 10% ofthe UK’s greenhouse gas emissionscome from the methane fromlivestock digestion and manure andnitrous oxide from fertilised land.

• Contamination of drinking water by

pesticides £120 million

nitrates £16 million

cryptosporidium £23 million

phosphates and soil £55 million

• Damage to wildlife, habitats, hedgerows

and drystone walls £125 million

• Emission of gases £1,113 million

• Soil erosion £106 million

• Food poisoning £169 million

• BSE £607 million

Total £2.3 billion

Figure 5: The hidden cost of farming

Water problems and global farmingin Kenya

The shores of Lake Naivasha in the‘Happy Valley’ area of Kenya are nowblighted. Environmentalists blame thewater problems on pollution frompesticides, excessive use of water onthe farms, and deforestation caused bymigrant workers in the growing shantytowns foraging for fuel.

British and European-owned flowercompanies grow vast quantities offlowers and vegetables for export butthe official Kenyan water authority,regional bodies, human rights anddevelopment groups as well as small-scale farmers have accused flowercompanies near Mount Kenya of‘stealing’ water which would normallyfill the river. Kenya’s second largestriver, the Ngiro, is a life-sustainingresource for nomadic farmers, but italso sustains big business for flowerfarms supplying UK supermarkets.

According to the head of the waterauthority, the twelve largest flower firmsmay be taking as much as 25% ofwater normally available to more than100,000 small farmers. Locals andcampaigners say the river now petersout 60 miles short of where it used to,and the overuse of water wascontributing directly to conflict betweensmall-scale farmers.

In the last 60 years farmers haveripped up about 190,000 miles(304,000 km) of hedgerow, destroyed97% of meadows, 60% of ancientwoodland, and farmland birds havesuffered a catastrophic decline. Birdsthat depend on agricultural fieldshave fallen in numbers by as muchas 50% since 1970.

Since 1945 Britain has lost 65% of itsfarmers. Now just 1.2% of thepopulation work on the land. It isnot just in MEDCs. India, with over700,000 small farmers, expects tolose 50% by 2026.

It is estimated that a kilogram ofblueberries imported by plane fromNew Zealand produces the sameemissions as boiling a kettle 268times. Intensive farming in the UKhas led to soil erosion and soil lossand increased the risk of flooding insome areas by 14%. This has addedup to £115m to insurance bills.

Sudan 1 crisisGlobalised farming also has animpact on human health. The recallof hundreds of productscontaminated with the cancer-causing dye Sudan 1 caused thebiggest food scare since BSE. Sudan1 is normally used to colour petrol,solvents and boot polish. The FoodStandards Agency has said thatwhile Sudan 1 could increase therisk of cancer, the risk is ‘generallylikely to be very small’. Nearly halfof the world’s spices come from

India. In 2005 500,000 tonnes ofspices were exported to 120countries at a value of $1.5 billion(£780m).

The 2005 Sudan 1 Crisis related toone batch of contaminated chillipowder containing the Sudan 1 dye.In 2002 Volga Spice, an Indian foodcompany, sold five tonnes of chillipowder coloured with Sudan 1 toGautam Export, also based in India.Gautum Export shipped thecontaminated powder to Harwich inEssex. From there it was sold to EastAnglian Food Ingredients based inEssex, and then on to Unbar Rothonin Essex. The powder was sold toPremier Foods Oldham, who in turndistributed it to more than 200 otherfirms across a dozen countries inEurope (Figure 6), and also to NorthAmerica and the Caribbean. Over500 food products had to be recalled,which revealed just how vulnerablethe food chain was to a rogue batchof contaminated powder.

ConclusionThe consolidation andinternationalisation of the food retailand manufacturing industry can beexpected to continue. In the nearfuture, four out of five large retailorganisations will operate on aworldwide scale. There will also be anumber of dominant local andregional operators. A similarsituation is likely among the foodmanufacturers. About 10 foodmanufacturers will operate globally,with 20 to 25 global brands, alongwith a number of consumer goodscompanies that will be dominant inparticular countries or regions.

ReferencesAtkins, P., and Bowler I., 2001 Foodin Society, Arnold.Daniels, P., et al., 2005, Anintroduction to Human geography –Issues for the 21st century, Pearson.Robinson, G., 2003, Geographies ofAgriculture, Pearson,

April 2007 no.541 Globalisation of food production

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1. Explain what is meant by the ‘globalisation of food supply’.

2. Suggest ways in which some farmers lose out as a result of globalisedfarming.

3. Outline the environmental impacts of intensive farming.

4. Discuss the social and economic impacts of the globalisation of foodproduction.

F o c u s Q u e s t i o n s

Figure 6: The spread of Sudan 1

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NELSON THORNES PUBLISHINGArtist: David Russell Illustration

a

1

2

c

d

gh

i j k

lm

n

ef

b

1 Source = Mumbai

2 UK

3 from UK to:

a USA

b Canada

c Bermuda

d Bahamas

e Antigua

f Grenada

g Spain

h France

i Belgium

j Netherlands

k Denmark

l Austria

m Switzerland

n Italy, Greece and Malta

Key