How are food billionaires getting richer in a cost of living crisis? Monopoly power
A farmer holds some wheat in front of a field

How are food billionaires getting richer in a cost of living crisis? Monopoly power

By: Daisy Pearson
Date: 19 January 2024
Campaigns: Food

Our report, Taken, Not Earned, released this week in collaboration with Balanced Economy Project, SOMO and LobbyControl, reveals just how extreme monopoly power is, and how it drives the global wealth and power divide. Six case studies take an in-depth look at how monopoly power affects different sectors: finance, tech, pharma, agriculture, retail and energy. Here we take a look in detail at monopolies in agriculture.

Our food systems are in crisis, around the world, and monopoly power is at the heart of it. While most people in the world are experiencing a cost of living crisis, and small food producers are struggling, the barons of the food industry are enjoying bumper profits. This is no coincidence: there is a causal link between poverty for millions and profits for the few: monopoly power.

Recent figures suggest that well over 50% of recent price rises in the UK, US and Australia have been driven by increases in profits. A 2023 report from Oxfam states that “not only are companies passing increased input costs on to consumers, but they are also capitalising on the crisis, using it as a smokescreen to charge even higher prices.” Its research shows a huge increase in the wealth of food and energy billionaires, with 62 ‘food billionaires’ created between 2020 and 2022.

In this period, billionaires in the food and energy sectors saw their combined fortunes increase by a billion dollars every two days. At the same time, 263 million people were at risk of being pushed into extreme poverty, with rises in the price of food a core driver.

The corporate takeover of our food system

Monopolisation is at the heart of this inflation. Because of the concentration of the market, corporations don’t have to fear being outcompeted, and instead choose to pass price rises on to their shareholders.

And this concentration is increasing like never before. Over three decades, the big players in the food industry have taken over hundreds of smaller companies, part of a broader trend of ‘mergers and acquisitions’ that has been a dominant feature of the neoliberal economy. While 25 years ago, ten corporations controlled 40% of the seed market, a series of mega mergers means that today just four – Bayer, Corteva, Syngenta and BASF – control more than half. Together, they also control more than 60% of the world’s agrochemical market. In fact, many parts of the agricultural and food sectors are effectively controlled by between four and six giants.

Unprecedented levels of concentration are also leading to unprecedented profits for those on top. Sitting on chokepoints in the supply chain, these massive corporations are able to lock in both suppliers and consumers, who have almost nowhere else to turn, and extract money from them, like gatekeepers or tollkeepers. By buying up multiple stages of the of the supply chain, from farm to table, monopolists are able to ruthlessly cut costs, maximise profits and crush smaller businesses.

Cargill

Cargill is one of four agricultural giants who now control between 75% and 90% of international grain trade. They are the biggest food commodity trader and the largest privately-owned company in the US. During the Covid pandemic, against the backdrop of millions of deaths, crop failures and a global hunger crisis that saw nearly a billion people going hungry, Cargill announced its biggest profits in its 156-year history, up 64 percent on the previous year. As a result, the Cargill family, already rich, welcomed four new billionaires to their ranks, making a total of 12.

This should come as no surprise: Cargill’s extreme growth has been enabled by aggressive expansion and exploiting many of the most turbulent parts of the 20th century, from profiteering during World War I, to trying to corner the corn market during the Dust Bowl. Its entire history is littered with scandals and controversies, from fatal meat contaminations, to deforestation, toxic waste dumping, pollution of water, air, and land, accusations of child labour in its supply chains, price fixing, union busting, and lying about its emissions.

To make matters worse these corporations and their associates are often involved in writing the very rules of the global economy, effectively locking their ill-gained and out-sized power into international law. Trade deals, farming subsidy rules and patent laws all overwhelmingly favour big agriculture and rich countries over smaller businesses and poorer countries.

Damaging the health of people and planet

The industrial forms of farming that secure huge profits for the big agrochemical companies have had disastrous effects on our health, the conditions of workers and the environment. The heavy use of pesticides is linked to many chronic illnesses in humans, such as cancer, and heart, respiratory and neurological diseases. Meanwhile, greenhouse gas emissions from food already make up between a quarter and a third of the global total, and they’re rising. What’s more, the monocultural approach favoured by Big Agriculture has led to the loss of around 75% of plant genetic diversity since the 1990s,  leaving us far more vulnerable to climate change or crop disease.

The system isn’t working

While our food system is succeeding at funnelling vast wealth into the banks of the super-rich, it is failing to provide the rest of the world with affordable, nutritious food, with 735 million people facing hunger in 2022.

We are allowing a handful of companies an unprecedented level of illegitimate and private control over one of our most fundamental resources for survival. Huge corporations make the decisions about everything we eat – what we eat and what is grown, and where, and by whom. Decisions that should be democratic, open and transparent are being made by corporations whicho have proved time and time again that they value profits over people and planet, that they’re willing to break the law, cut corners and exploit crises for their own gain.

A food system run by monopolists isn’t working. It’s time to build something new.

Full case study

Read more

  1. Taken, Not Earned: How monopolists drive the world’s power and wealth divide, Global Justice Now, Balanced Economy Project, SOMO, LobbyControl, January 2024
  2. World’s top firms use ‘monopoly power’ to inflate prices, The Times, 17 January 2024
  3. Case Study: Big Pharma, Global Justice Now, January 2024

Top image: Miha Creative/Shutterstock