(February 16, 2017) The approval by the European Union of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) makes the world safer for the global agricultural cartels and much less pleasant for Canadian farmers and the consumers in both jurisdictions.
Industry friendly farm groups, like the Alberta Wheat Commission, are accentuating the positive while closing their eyes to the reality of the giant global cartels setting themselves up to profit even more from farmers and food consumers.
The EU’s Parliament also ignored a very useful examination of the global agricultural cartel called The Corporate Atlas 2017 from Germany’s Heinrich Boell Foundation and co-published with Oxfam Deutschland and the ultra-prestigious French newspaper Le Monde Diplomatique, among others. It contains some astounding information about global agricultural business. Unfortunately, the report itself is only available in German, but with thanks to their good graphs, Google translate, and a little patience, I can provide a summation of some of its findings.
Their report says that in agro-chemicals and seed 7 corporations currently hold dominant positions. Soon there will be only 4. Just 3 of them, the report says, will control over 60% of the global seed and chemical markets.
Also on the input side for farmers are the fertilizer manufacturers. The top ten identified last year include two Canadian firms, Agrium and Potash Corporation, who are in merger talks.
Like grain, fertilizer is one of those bulk commodities that is very sensitive to transportation costs. So the merger of Agrium and Potash Corp will create an effective monopoly fertilizer seller leaving prairie farmers as a captive market.
It will be no surprise to prairie farmers that “In wheat, maize, and soy beans there are only 4 international companies that dominate 70% of the market” – they’ve known about the ABCD group for decades, but what may be a surprise is that COFCO, the Chinese government and private food agency now ranks as number three.
Effectively there are only 6 farm equipment manufactures with CHN and John Deere holding about 70% of the global market with Mahindra and Kubota tied for a distant third, and Agco and Claas bringing up the rear.
This grim trend continues with animal genetics which have effectively been cornered by just 7 global corporate giants.
As these giant global corporations consolidate their power around the world, it is easy to see the coming attack on supply management of dairy, eggs, and chickens in Canada taking shape and following the model used to destroy the farmer-controlled Canadian Wheat Board.
Ratification of CETA by the rubber stamp Parliament in Ottawa will seriously injure the dairy sector, one of the few Canadian farm sectors that is successful without government subsidies and huge farm debt loads.
CETA will also place further pressure on Ottawa to continue privatizing the cereal grains’ genomes which farmers and the public have paid for over the years. We know from the miserable Canadian experience with the privatized canola model that private seed research costs more and delivers sub-standard yield increases. This also makes the Harper government’s destruction of Federal agricultural research libraries take on new significance.
Farmers find themselves surrounded by giant cartels on all sides and it certainly doesn’t help farmers’ bottom line to be stuck in the middle without the collective bargaining power they once had in grain handling and marketing. Prairie farmers are already feeling the pinch of exploitation by the private grain trade having seen a third or more of the value of their production taken from them by the agents of the grain companies of the ABCD group.
Canadians are learning about an economic rule of thumb known as the “iron law” of prices and wages: once a handful of corporations control the majority of the money in any sector, free markets are deader than door nails and without counter balances like marketing boards and labour unions, prices and wages are driven to subsistence levels.
The increasing debt burden in the farming sector since the Harper government killed the Canadian Wheat Board demonstrates just how quickly this can happen. Food consumers, facing extortionate grocery prices and falling real wages, will only be fooled for so long by bogus claims taxes are the cause of rising food prices as they see farmers getting less and less for the commodities they buy in the grocery store every day.
Given the reality of the giant cartels dominating essentially all the high ground of the global economy labelling treaties giving those corporations more power as “progressive” will not fool many people for long. Ratification of CETA will simply further empower our giant corporate feudal overlords to take more money from farmers and consumers.