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Transnational Corporations & the Globalization of the Food System

Transnational Corporations & the Globalization of the Food System. Hefferman & Constance. Commodity Systems Approach. Focus on particular commodities Labor relations involved in production Technological factors (inputs, mechanzation) State policies The “World Steer” Agri-Food Complex

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Transnational Corporations & the Globalization of the Food System

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  1. Transnational Corporations & the Globalization of the Food System Hefferman & Constance

  2. Commodity Systems Approach • Focus on particular commodities • Labor relations involved in production • Technological factors (inputs, mechanzation) • State policies • The “World Steer” Agri-Food Complex • Created by TNCs as they source beef from Costa Rica, Honduras, etc. • Nation states no longer control commodity trade, rather companies sell to other companies

  3. 3 PHASES OF RESEARCH • 1. Vertical Integration following WW II • Control of commodities from seed to market • WW II rationing of pork & beef; government subsidized broiler production • Broiler Industry: shift from women’s independent production to confinement operations • Shift to corporate production on Factory Farms, integration of feed production, broiler production, & assembly-line processing

  4. Contract Farming • Contracts: • Firm provides feed, chicks, vet services • Grower provides building, labor, utilities • Firm maintains title to birds • Some growers resisted incorporation • The broiler industry moved South where boll weevil devastated the cotton crop • Desperate farmers signed contracts in order to keep their farms • Workers are often non-union, female, or ethnic minorities

  5. Shift from Independent to Contract to Corporate Control

  6. 2. Conglomerate Integration • Cross-Commodity Conglomerate Analysis • Late 1980s, Crisis of capital accumulation & failing U.S. hegemony • Reagan deregulation: Merger mania • Large conglomerates survived • Ex: ConAgra bought out 56 companies • (Armour, Swift, Banquet, Eckrich Meats, Hunts, Wesson, Orville Redenbacher) • Oligopoly control of inputs & product markets • Family Farms faced a Cost-Price Squeeze • ConAgra, Cargill, ADM, Tyson, etc. dominated market across many commodities

  7. 3. Global Integration • Analysis of TNCs • Global Agrifood Complex Based on Global Sourcing • Ability of TNCs to obtain inputs & market outputs at various sites around the globe • Cargill (HQ in Minneapolis) trades 103 commodities in 49 countries

  8. Tyson-Japanese Joint Venture • Breast meat is removed for the U.S. fast food industry • Chicken legs shipped to Mexico for processing (deboning) where labor is $4/day • The chicken is then exported for Japanese consumption

  9. “New Globalization” • TNC vision: Global Food System • New “World Managers” are not accountable • Source from “Have Not” nations to feed “Have Nations”

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