- Email: [email protected]
Agribusiness and FAO
Agribusiness and FAO A critical view
Brian Bolton
The
author
balance the
seeks
of views
role
of
system.
He
redefinition
to
redress
expressed
industry does of
in
this
the
the about
the
UN
through
links
in
a the
Industry Cooperative Programme of FAO and its perceived role and a critique
of the article
Albright
et al in the
by Kimberley February
1977
issue of Food Policy. Brian at
Bolton
the
Studies, Brighton,
is a Research
Institute
of
University
Associate
Development of
Sussex,
UK.
The views expressed are author and not necessarily organisations he works for.
Critics of ICP those of the those of the
’ Kimberley Albright, J.F. McClelland Ill, and William H. Young, ‘Cooperation between agroindustrv and the UN’ Food Policy, Vol2 No 1, February 1977, pp 4459. See also a letter from Rav Goldberg Food Policy, Vol 2 No 2, May 1977. who coined the word pp 174-l 75, ‘agribusiness’, helped convene two conferences at Harvard for the companies and has made many inputs on his own account, Mention in his letter of PL 480, part of the US ‘Food for Peace’ programme and of Messrs Butz and Bergland brings to light the less savourv side of the company-state links which certainly for the were profitable companies. * FAO Consultation with Trade Unions, Rome 1975. The ICP 4th session, representative said that they would be prepared to discuss matters which they thought were of interest to trade unions!
240
Recent contributions to Food Policy’ have tended to paint a somewhat misleading picture of the principal thrust of agribusiness in the UN, that is through the Industry Cooperative Programme (ICP) of FAO. They obscure some very real anxieties felt by many people. To date, little has been said on behalf of those who are on the receiving end of these endeavours, which tends to heighten rather than diminish the anxieties. This article will, I hope, serve to at least begin to redress the balance, written, as it is, from an equally partisan standpoint: that of those who can with some justice claim to represent a good proportion of those who will be affected by the future development of ICP, the international trade union movement.
Critics of ICP come in two sizes. There are those who are concerned about the way it is operating and there are those who question its very existence. Within FAO, and for that matter within UNIDO, UNDP etc, there are many who feel that the whole philosophy of allowing any privileged access to the UN is moving too far away from the spirit of the Charter. To those who allege that this is an idealistic concept they would answer that the membership of ICP is drawn, in the main, from privileged groups in a privileged part of the world; that ICP is by definition only representative of the business community, or part of it, based in the industrialised over-developed economies. The trade unions while often taking a more pragmatic view nevertheless share some of this general disquiet. But they are speaking from the standpoint of experience. The arrangements which pertain in the tri-partism of IL0 do not pertain in FAO-ICP. The trade unions have had dealings with many of the companies in ICP and feel that these have not always left them with the feeling of benevolence that much ICP propaganda would have us believe is their outlook on the world food problem. When it was suggested that the trade unions should have a voice in ICP the response was less than cordial.’ The principal beneficiaries of ICP effort are supposed to be the developing countries but there are many in the Third World who feel that ICP may be making recommendations which are wholly
FOOD
POLICY
August 1977
Agribusiness and FAO -a critical view
inappropriate to the real needs of the people. Finally there are those who stand outside any of these groups but who question whether the underlying basis of ICP is not likely to preserve, reinforce and indeed worsen the inequalities that exist between the over-developed and under-developed parts of the world. Within ICP there are not a few companies whose contribution to world food supplies, to nutritional levels and to land redistribution has been nil. One has only to consider the case of Gulf and Western in Dominica to see all three aspects countered in a very real way.3 The attitude of the three main banana transnationals in Latin America could be cited as another examp1e.4 Only last year the Government of India began litigation against grain companies relating to contracts going back 15 years, most if not all, of which companies are represented in ICP.5 The widely held view that fertilisers are used in too great a quantity in developed countries is perhaps recognised in ICP deliberations. But their statement that a greater percentage will go to developing countries might carry more conviction if one was not aware of the enormous degree of cartelisation and price fixing that goes on in this area by transnationals who are not only in ICP but part of the fertiliser programme too.6 One could go on making these sort of points to the point of tedium. Given this background however it is hardly surprising that people are, to say the least, sceptical about the contribution ICP is likely to make in furthering the objectives of the World Food Conference.
Contradictions
3 In a survey conducted by Columbia University the 75% of the Dominican peasantry who had been dispossed by Gulf & Western were found to have a calorie intake 21% down on the INCAP recommended levels and a protein intake 38% down. The company has failed to conform to a 1972 decree that it should reduce the amount of land under cane which has, in fact, increased. Corporate Examiner, Nov/Dec 1976. 4 J.F. Sandoval, ‘The Latin American Banana Industry and Multinationals’, Mimeo, Institute of Development Studies, University of Sussex, Latin America, 12/4/74. 10/l/75. ’ International Review Service. Vol XIX No d184, 1976. 6 UNCTAD ‘Restrictive Business Practices’ TD/l3/C/390. NY 1973, p 20. 80-82. ’ ICP Follow-up Mission to Pakistan, FAO-ICP, DDl:GlJ6/54. * W.W. ‘Government-industry Simons, partnership in the Third World: a United Nations experiment beains to oav off’, Columbia Journal of Wo%d Busi/;esi. Fall 1975, p 38.
FOOD
POLICY
August
1977
This scepticism centres on a number of points but one may serve as an example. ICP is not unconscious of the criticism that is aimed at it and it’constantly says that it does not see its role as furthering the interests of companies in general or in particular. However, running through the mission reports is a theme which is expressed most articulately in that on Pakistan .’ This report refers to the desire, which is often phrased so as to imply an a priori need, for a ‘satisfactory investment climate’ including no restrictions on profit repatriation, on royalties or on investment profiles. This sort of attitude squares uneasily with other claims such as that of assisting developing countries to plan and develop. How can a nation plan the essential ingredients of its economy when many of the most important decisions affecting it are being made in a boardroom thousands of miles away? The contention that ICP is not an agent for agri-linked transnationals also contrasts strangely with the evidence of one of its own officers who actually went on the mission to Venezuala in 1972. He cites Heinz in Turkey, Booker McConnell, Shell and Verenigde in Kenya, Ethiopia, Tanzania and Nigeria, Yates in Brazil and a consortia in West African Forestry as cases where ICP has played a ‘catalytic role’ in industry’s involvement in agricultural programmes.a All the companies involved are ICP members and observers could perhaps be forgiven for thinking that the nature of the catalyst was rather more direct than ICP suggest. Of even greater concern is the way in which some of the observations are made. For example, in the follow-up to the mission to Pakistan the ICP special adviser, himself a Nestle employee based in Sao Paula noted that ‘inflation is around 20% but . . . correcting
241
Agribusiness and FAO -a critical view
mechanisms like those used . . . in Brazil do not seem to have been applied’.9 The consequences for individual human freedoms of applying Friedmanite economic policies, as has been done in Brazil and Chile, do not permit their serious consideration by those whose over-riding concern is with democracy, trade union rights and bargaining with multinational companies on an equal footing. It was almost frightening to read in the report of the mission to Sri Lanka that in the opinion of ICP some of the ‘privileges’ extended to labour are too generous.” This is a small country whose people suffered under the crushing burden of exploitation by multinational companies in the tea industry for longer than one would care to remember, yet within a few years of partially redressing this imbalance ICP suggests putting the clock back. It then went on to compound this by asking for abolition of the free rice issue! It was in the context of these glaring contradictions that a recent trade union conference” suggested that ICP, or more appropriately the leading agribusiness concerns that are using their oligopolistic power to dominate ICP’s deliberations, is definitely not the best vehicle for promoting the objectives of the World Food Conference. Considering also the other insidous connections within UN agencies the question was clearly put that agribusiness seemed to be conducting an exercise in ‘taking over the UN in five easy stages’.12 On this basis it would appear that opposition to the continued existence of ICP as an autonomous unit inside FAO is growing and that it will be hard put to amass sufficient evidence to justify such a continuation. If one was looking for this evidence from the article by Albright et a&l3 then here too there are substantial reservations which have to be countered.
A critique
9 Op tit, Reference 8. lo ICP Mission to Sri Lanka,
Rome,
1972,
P 6. ” Attended by elected representatives of the International Confederation of Free Trade Unions (ICFTU), the International Union of Foodworkers (IUF) and the International Federation of Plantation and Workers Agricultural Allied and (I FPAAW). ‘* Comment by one of the participants at the trade union conference. l3 Op cit. Reference 1. is l4 The word agroindustry interchangable with agribusiness. l5 op cit. pp 44-45. ‘= A. foreign Areskoug, ‘Private investment and capital formation in countries’, Economic developing Development and Cultural Change. Vol 24, No 3, April 1976, pp 529-547. showed that using World Bank data countries like Greece and the Philippines had experienced a net drop in fixed capital formation due to the presence of multinationals.
242
It is always necessary to hesitate before formally criticising the work of other writers but given that the three authors all have links with agribusiness then to some degree what follows is as much a demand for a rethink of their part as a questioning of the rationale contained in the glowing report of multinational-company activity in the food and agriculture sectors. For most people on the receiving end of this activity there are some contrasts which have still to see the light of day. Early in the article the authors tell us that business is increasingly involved in agroindustry.14 ‘Companies’, they say, ‘provide and development, capital, equipment, technology, research management expertise, and access to markets . ..‘I5 One would not question the first part of this statement but as to the details there is a real need for qualification. Virtually no R&D is carried out in developing countries, it being concentrated very much at the centre and subject to a whole range of patents and licences all of which in fact prevent access to R&D by developing countries. This is one of the main complaints made by all development students, not just those who would be totally opposed to ICPper se. As for capital provision in developing countries, one is constantly assailed by the fact that less than one third of all new private investment goes to the Third World. A recent study reinforced this point by showing that in some cases the intervention of multinationals had reduced the amount of capital stock, rather than increaed it.16
FOOD
POLICY
August
1977
Agribusiness
and FAO -a critical view
For countries like Ethiopia, Sri Lanka, Khmer, Chad and Gambia where agriculture accounts for over 90% of total export receipts this has to be taken seriously.” Technology The type of technological development which has occurred in developed countries has brought with it societal changes and responses. We have grown accustomed to some of these changes and have created ways of offsetting the worst excesses. But the needs of developing countries are often the reverse of those which we struggle for. There is an over-riding demand for employment opportunities requiring labour intensive industries. Often multinationals fail to appreciate this. The form of technology used often has its effect on the labour market and in developed economies these are usually are high-level technologies highly differentiated where there employed. Yet the last thing most developing countries need today is a stratified society. Quite the opposite, and citing Africa as an example, the tendency is towards creating a more unified civil society. Further on in the article’* reference is made to the cooperation between FAO and the equipment manufacturers to develop appropriate applications of existing technology for developing countries. Nowhere is it suggested that ICP might cooperate in establishing industries in the developing countries themselves to enable them to manufacture their own impliments according to their own perceived needs.
” OECD.
Development
DAC,
operation, 1975 IS op cit. p 47.
Survey, Table
Co-
IV-2,
p 74.
I9 The Assistance Development Committee of OECD lists 25 developing countries where agriculture contributes more to GDP than the ‘all developing country’ average of 27%. For Gambia it is 56% and groundnuts account for 78% of total export revenue. ‘O Op cit. p 52. ” International Fund for Agricultural Development, jointly funded by OECD and OPEC. ** Kenana is the giant sugar project in the Sudan at present run by Lonrho. Ed. note: Since this article was written the Kenana Sugar Company general meeting was held at which the management contract with Lonrho was dissolved.
FOOD
POLICY
August
1977
Market access Market access has largely been channeled via the multinationals and if they are doing this then it is they who will decide what will be produced, and often how, in what quantities, where it will be sold and for how much. The tangible benefits accruing to the developing countries are often hard to find. There are still all-too-many ‘one crop’ economiesi whose vunerability is in many ways increased by increasing concentration at the centre. It is meaningless to talk of market access when the major companies are gaining a yet tighter hold on distribution of many of the processed crops. If the authors are correct, and there is no reason to doubt them, agroindustry is going much further than just not doing anything about the points made above. It is suggesting that the UN agencies assist them in financing adaptation of technologies, to ‘spread risk’ and for the provision of infrastructure. Most of the IPC Mission reports call for government assistance in providing both infrastructure - roads, communications, housing, etc -, and the ubiquitous ‘safe investment climate’. No mention is made of the substantial internal resources which many multinations have at their disposalzO So ‘the large and growing pools of funds for investment’ appear to have been earmarked by agribusiness, which must be a surprise for the administrators of IFAD*’ whose ground rules are implicitly unlikely to be of much benefit to multinationals and, if agribusiness does use them, as at Kenana, ** then relevance to local needs may again be called into question. Food losses A point is made that food losses and waste are problems that need to be tackled. Again, one would like to think that agribusiness could
243
Agribusiness and FAO -a critical view
assist in this process but by its own admission one of the bigger companies in ICP is not prepared to develop ways of processing soya meal, after having extracted the highly lucrative oiLz3 In fact, soya meal can be used for animal feed, among other things, which would reduce the quantity of grain at present eaten by animals in feedlots, thus releasing it for human consumption. Food or cash crops One could quote at length the examples of Cargill, Gulf & Western, United Brands, etc, companies who by their policies have changed agricultural production from food crops to cash crops. The argument that this creates much needed export revenue is to some degree belied by the knowledge that a country like Ecuador which derives 41% of its export revenue from bananas saw the price fall 27% in the period of the first development decade, whilst its earnings were, to no small degree, governed by the policies of Castle & Cook.24
23 Ralston-Purina Annual Report, 1976. *4 J. Sandoval, op cit. Reference 4. 25 Albright, et al, op cit. p 43. 26 Ibid, p 54. 27The Bankers programme has become an integral part of FAO but is linked via the Investment Centre of FAO and is very much under the control of the major western banks. Rome, 281CP Mission to Cameroon, 1973, p 8.
244
Data One of the more damning inditements of ICP attitudes comes out in the section of the article entitled ‘Experience of companies with UN Agencies - FAO’.25 The contradictions are phenomenal. There is a complaint that ICP members are denied access to ‘much usable data’ yet there is ‘an inability of some (FAO) personnel to keep company information confidential’. Confidential from whom one may ask? There is a call for a ‘common ideology’ based on achievement of results. Politics should not be allowed in at working levels, especially ‘anti-business rhetoric’. A ‘pro’ for FAO is apparently the way in which agroindustry has been able to make its voice heard in the ‘political debate’ on multinationals within the UN. On the one hand politics is to be kept at arms length whilst on the other it is obviously of inestimable value. The more generous observers would probably say that ICP supporters were at least confused whilst the more sceptical would ask how far this specious pleading will go. The authors were not without their criticisms of ICP itself.26 There is apparently insufficient co-operation with the Bankers Programme,” ineffective links with other UN agencies to allow yet more sources of profit to be identified and insufficient screening and rationalisation of information sent to member companies. These criticisms were based on a survey of agroindustry firms and one feature that obviously caused much anxiety was the view that some developing country governments invited ICP missions as a cosmetic exercise without any intention of implimenting its recommendations. It is of course possible that the governments’ thought the recommendations ‘loaded’, wrong or inappropriate. It is quite likely that the Cameroon government had other priorities than a tomato concentrating plant.28 The article concludes with a suggestion that there should be ‘obligatory’ inclusion of ICP delegates in all forums of the UN system where ‘problems covered by ICP activities could be discussed’. Not only is this placing agroindustry in a very privileged postion vis-a-vis trade unions, and other labour organisations, and governments but it is demanding advantages that other business sectors would doubtless desire. There is a certain naivety in such a plea but the implicit danger is there to see. What we may be witnessing is some early jockeying for position in what could be the first coup d’etat on the United Nations itself.
FOOD
POLICY
August
1977
Brian Bolton
The
author
balance the
seeks
of views
role
of
system.
He
redefinition
to
redress
expressed
industry does of
in
this
the
the about
the
UN
through
links
in
a the
Industry Cooperative Programme of FAO and its perceived role and a critique
of the article
Albright
et al in the
by Kimberley February
1977
issue of Food Policy. Brian at
Bolton
the
Studies, Brighton,
is a Research
Institute
of
University
Associate
Development of
Sussex,
UK.
The views expressed are author and not necessarily organisations he works for.
Critics of ICP those of the those of the
’ Kimberley Albright, J.F. McClelland Ill, and William H. Young, ‘Cooperation between agroindustrv and the UN’ Food Policy, Vol2 No 1, February 1977, pp 4459. See also a letter from Rav Goldberg Food Policy, Vol 2 No 2, May 1977. who coined the word pp 174-l 75, ‘agribusiness’, helped convene two conferences at Harvard for the companies and has made many inputs on his own account, Mention in his letter of PL 480, part of the US ‘Food for Peace’ programme and of Messrs Butz and Bergland brings to light the less savourv side of the company-state links which certainly for the were profitable companies. * FAO Consultation with Trade Unions, Rome 1975. The ICP 4th session, representative said that they would be prepared to discuss matters which they thought were of interest to trade unions!
240
Recent contributions to Food Policy’ have tended to paint a somewhat misleading picture of the principal thrust of agribusiness in the UN, that is through the Industry Cooperative Programme (ICP) of FAO. They obscure some very real anxieties felt by many people. To date, little has been said on behalf of those who are on the receiving end of these endeavours, which tends to heighten rather than diminish the anxieties. This article will, I hope, serve to at least begin to redress the balance, written, as it is, from an equally partisan standpoint: that of those who can with some justice claim to represent a good proportion of those who will be affected by the future development of ICP, the international trade union movement.
Critics of ICP come in two sizes. There are those who are concerned about the way it is operating and there are those who question its very existence. Within FAO, and for that matter within UNIDO, UNDP etc, there are many who feel that the whole philosophy of allowing any privileged access to the UN is moving too far away from the spirit of the Charter. To those who allege that this is an idealistic concept they would answer that the membership of ICP is drawn, in the main, from privileged groups in a privileged part of the world; that ICP is by definition only representative of the business community, or part of it, based in the industrialised over-developed economies. The trade unions while often taking a more pragmatic view nevertheless share some of this general disquiet. But they are speaking from the standpoint of experience. The arrangements which pertain in the tri-partism of IL0 do not pertain in FAO-ICP. The trade unions have had dealings with many of the companies in ICP and feel that these have not always left them with the feeling of benevolence that much ICP propaganda would have us believe is their outlook on the world food problem. When it was suggested that the trade unions should have a voice in ICP the response was less than cordial.’ The principal beneficiaries of ICP effort are supposed to be the developing countries but there are many in the Third World who feel that ICP may be making recommendations which are wholly
FOOD
POLICY
August 1977
Agribusiness and FAO -a critical view
inappropriate to the real needs of the people. Finally there are those who stand outside any of these groups but who question whether the underlying basis of ICP is not likely to preserve, reinforce and indeed worsen the inequalities that exist between the over-developed and under-developed parts of the world. Within ICP there are not a few companies whose contribution to world food supplies, to nutritional levels and to land redistribution has been nil. One has only to consider the case of Gulf and Western in Dominica to see all three aspects countered in a very real way.3 The attitude of the three main banana transnationals in Latin America could be cited as another examp1e.4 Only last year the Government of India began litigation against grain companies relating to contracts going back 15 years, most if not all, of which companies are represented in ICP.5 The widely held view that fertilisers are used in too great a quantity in developed countries is perhaps recognised in ICP deliberations. But their statement that a greater percentage will go to developing countries might carry more conviction if one was not aware of the enormous degree of cartelisation and price fixing that goes on in this area by transnationals who are not only in ICP but part of the fertiliser programme too.6 One could go on making these sort of points to the point of tedium. Given this background however it is hardly surprising that people are, to say the least, sceptical about the contribution ICP is likely to make in furthering the objectives of the World Food Conference.
Contradictions
3 In a survey conducted by Columbia University the 75% of the Dominican peasantry who had been dispossed by Gulf & Western were found to have a calorie intake 21% down on the INCAP recommended levels and a protein intake 38% down. The company has failed to conform to a 1972 decree that it should reduce the amount of land under cane which has, in fact, increased. Corporate Examiner, Nov/Dec 1976. 4 J.F. Sandoval, ‘The Latin American Banana Industry and Multinationals’, Mimeo, Institute of Development Studies, University of Sussex, Latin America, 12/4/74. 10/l/75. ’ International Review Service. Vol XIX No d184, 1976. 6 UNCTAD ‘Restrictive Business Practices’ TD/l3/C/390. NY 1973, p 20. 80-82. ’ ICP Follow-up Mission to Pakistan, FAO-ICP, DDl:GlJ6/54. * W.W. ‘Government-industry Simons, partnership in the Third World: a United Nations experiment beains to oav off’, Columbia Journal of Wo%d Busi/;esi. Fall 1975, p 38.
FOOD
POLICY
August
1977
This scepticism centres on a number of points but one may serve as an example. ICP is not unconscious of the criticism that is aimed at it and it’constantly says that it does not see its role as furthering the interests of companies in general or in particular. However, running through the mission reports is a theme which is expressed most articulately in that on Pakistan .’ This report refers to the desire, which is often phrased so as to imply an a priori need, for a ‘satisfactory investment climate’ including no restrictions on profit repatriation, on royalties or on investment profiles. This sort of attitude squares uneasily with other claims such as that of assisting developing countries to plan and develop. How can a nation plan the essential ingredients of its economy when many of the most important decisions affecting it are being made in a boardroom thousands of miles away? The contention that ICP is not an agent for agri-linked transnationals also contrasts strangely with the evidence of one of its own officers who actually went on the mission to Venezuala in 1972. He cites Heinz in Turkey, Booker McConnell, Shell and Verenigde in Kenya, Ethiopia, Tanzania and Nigeria, Yates in Brazil and a consortia in West African Forestry as cases where ICP has played a ‘catalytic role’ in industry’s involvement in agricultural programmes.a All the companies involved are ICP members and observers could perhaps be forgiven for thinking that the nature of the catalyst was rather more direct than ICP suggest. Of even greater concern is the way in which some of the observations are made. For example, in the follow-up to the mission to Pakistan the ICP special adviser, himself a Nestle employee based in Sao Paula noted that ‘inflation is around 20% but . . . correcting
241
Agribusiness and FAO -a critical view
mechanisms like those used . . . in Brazil do not seem to have been applied’.9 The consequences for individual human freedoms of applying Friedmanite economic policies, as has been done in Brazil and Chile, do not permit their serious consideration by those whose over-riding concern is with democracy, trade union rights and bargaining with multinational companies on an equal footing. It was almost frightening to read in the report of the mission to Sri Lanka that in the opinion of ICP some of the ‘privileges’ extended to labour are too generous.” This is a small country whose people suffered under the crushing burden of exploitation by multinational companies in the tea industry for longer than one would care to remember, yet within a few years of partially redressing this imbalance ICP suggests putting the clock back. It then went on to compound this by asking for abolition of the free rice issue! It was in the context of these glaring contradictions that a recent trade union conference” suggested that ICP, or more appropriately the leading agribusiness concerns that are using their oligopolistic power to dominate ICP’s deliberations, is definitely not the best vehicle for promoting the objectives of the World Food Conference. Considering also the other insidous connections within UN agencies the question was clearly put that agribusiness seemed to be conducting an exercise in ‘taking over the UN in five easy stages’.12 On this basis it would appear that opposition to the continued existence of ICP as an autonomous unit inside FAO is growing and that it will be hard put to amass sufficient evidence to justify such a continuation. If one was looking for this evidence from the article by Albright et a&l3 then here too there are substantial reservations which have to be countered.
A critique
9 Op tit, Reference 8. lo ICP Mission to Sri Lanka,
Rome,
1972,
P 6. ” Attended by elected representatives of the International Confederation of Free Trade Unions (ICFTU), the International Union of Foodworkers (IUF) and the International Federation of Plantation and Workers Agricultural Allied and (I FPAAW). ‘* Comment by one of the participants at the trade union conference. l3 Op cit. Reference 1. is l4 The word agroindustry interchangable with agribusiness. l5 op cit. pp 44-45. ‘= A. foreign Areskoug, ‘Private investment and capital formation in countries’, Economic developing Development and Cultural Change. Vol 24, No 3, April 1976, pp 529-547. showed that using World Bank data countries like Greece and the Philippines had experienced a net drop in fixed capital formation due to the presence of multinationals.
242
It is always necessary to hesitate before formally criticising the work of other writers but given that the three authors all have links with agribusiness then to some degree what follows is as much a demand for a rethink of their part as a questioning of the rationale contained in the glowing report of multinational-company activity in the food and agriculture sectors. For most people on the receiving end of this activity there are some contrasts which have still to see the light of day. Early in the article the authors tell us that business is increasingly involved in agroindustry.14 ‘Companies’, they say, ‘provide and development, capital, equipment, technology, research management expertise, and access to markets . ..‘I5 One would not question the first part of this statement but as to the details there is a real need for qualification. Virtually no R&D is carried out in developing countries, it being concentrated very much at the centre and subject to a whole range of patents and licences all of which in fact prevent access to R&D by developing countries. This is one of the main complaints made by all development students, not just those who would be totally opposed to ICPper se. As for capital provision in developing countries, one is constantly assailed by the fact that less than one third of all new private investment goes to the Third World. A recent study reinforced this point by showing that in some cases the intervention of multinationals had reduced the amount of capital stock, rather than increaed it.16
FOOD
POLICY
August
1977
Agribusiness
and FAO -a critical view
For countries like Ethiopia, Sri Lanka, Khmer, Chad and Gambia where agriculture accounts for over 90% of total export receipts this has to be taken seriously.” Technology The type of technological development which has occurred in developed countries has brought with it societal changes and responses. We have grown accustomed to some of these changes and have created ways of offsetting the worst excesses. But the needs of developing countries are often the reverse of those which we struggle for. There is an over-riding demand for employment opportunities requiring labour intensive industries. Often multinationals fail to appreciate this. The form of technology used often has its effect on the labour market and in developed economies these are usually are high-level technologies highly differentiated where there employed. Yet the last thing most developing countries need today is a stratified society. Quite the opposite, and citing Africa as an example, the tendency is towards creating a more unified civil society. Further on in the article’* reference is made to the cooperation between FAO and the equipment manufacturers to develop appropriate applications of existing technology for developing countries. Nowhere is it suggested that ICP might cooperate in establishing industries in the developing countries themselves to enable them to manufacture their own impliments according to their own perceived needs.
” OECD.
Development
DAC,
operation, 1975 IS op cit. p 47.
Survey, Table
Co-
IV-2,
p 74.
I9 The Assistance Development Committee of OECD lists 25 developing countries where agriculture contributes more to GDP than the ‘all developing country’ average of 27%. For Gambia it is 56% and groundnuts account for 78% of total export revenue. ‘O Op cit. p 52. ” International Fund for Agricultural Development, jointly funded by OECD and OPEC. ** Kenana is the giant sugar project in the Sudan at present run by Lonrho. Ed. note: Since this article was written the Kenana Sugar Company general meeting was held at which the management contract with Lonrho was dissolved.
FOOD
POLICY
August
1977
Market access Market access has largely been channeled via the multinationals and if they are doing this then it is they who will decide what will be produced, and often how, in what quantities, where it will be sold and for how much. The tangible benefits accruing to the developing countries are often hard to find. There are still all-too-many ‘one crop’ economiesi whose vunerability is in many ways increased by increasing concentration at the centre. It is meaningless to talk of market access when the major companies are gaining a yet tighter hold on distribution of many of the processed crops. If the authors are correct, and there is no reason to doubt them, agroindustry is going much further than just not doing anything about the points made above. It is suggesting that the UN agencies assist them in financing adaptation of technologies, to ‘spread risk’ and for the provision of infrastructure. Most of the IPC Mission reports call for government assistance in providing both infrastructure - roads, communications, housing, etc -, and the ubiquitous ‘safe investment climate’. No mention is made of the substantial internal resources which many multinations have at their disposalzO So ‘the large and growing pools of funds for investment’ appear to have been earmarked by agribusiness, which must be a surprise for the administrators of IFAD*’ whose ground rules are implicitly unlikely to be of much benefit to multinationals and, if agribusiness does use them, as at Kenana, ** then relevance to local needs may again be called into question. Food losses A point is made that food losses and waste are problems that need to be tackled. Again, one would like to think that agribusiness could
243
Agribusiness and FAO -a critical view
assist in this process but by its own admission one of the bigger companies in ICP is not prepared to develop ways of processing soya meal, after having extracted the highly lucrative oiLz3 In fact, soya meal can be used for animal feed, among other things, which would reduce the quantity of grain at present eaten by animals in feedlots, thus releasing it for human consumption. Food or cash crops One could quote at length the examples of Cargill, Gulf & Western, United Brands, etc, companies who by their policies have changed agricultural production from food crops to cash crops. The argument that this creates much needed export revenue is to some degree belied by the knowledge that a country like Ecuador which derives 41% of its export revenue from bananas saw the price fall 27% in the period of the first development decade, whilst its earnings were, to no small degree, governed by the policies of Castle & Cook.24
23 Ralston-Purina Annual Report, 1976. *4 J. Sandoval, op cit. Reference 4. 25 Albright, et al, op cit. p 43. 26 Ibid, p 54. 27The Bankers programme has become an integral part of FAO but is linked via the Investment Centre of FAO and is very much under the control of the major western banks. Rome, 281CP Mission to Cameroon, 1973, p 8.
244
Data One of the more damning inditements of ICP attitudes comes out in the section of the article entitled ‘Experience of companies with UN Agencies - FAO’.25 The contradictions are phenomenal. There is a complaint that ICP members are denied access to ‘much usable data’ yet there is ‘an inability of some (FAO) personnel to keep company information confidential’. Confidential from whom one may ask? There is a call for a ‘common ideology’ based on achievement of results. Politics should not be allowed in at working levels, especially ‘anti-business rhetoric’. A ‘pro’ for FAO is apparently the way in which agroindustry has been able to make its voice heard in the ‘political debate’ on multinationals within the UN. On the one hand politics is to be kept at arms length whilst on the other it is obviously of inestimable value. The more generous observers would probably say that ICP supporters were at least confused whilst the more sceptical would ask how far this specious pleading will go. The authors were not without their criticisms of ICP itself.26 There is apparently insufficient co-operation with the Bankers Programme,” ineffective links with other UN agencies to allow yet more sources of profit to be identified and insufficient screening and rationalisation of information sent to member companies. These criticisms were based on a survey of agroindustry firms and one feature that obviously caused much anxiety was the view that some developing country governments invited ICP missions as a cosmetic exercise without any intention of implimenting its recommendations. It is of course possible that the governments’ thought the recommendations ‘loaded’, wrong or inappropriate. It is quite likely that the Cameroon government had other priorities than a tomato concentrating plant.28 The article concludes with a suggestion that there should be ‘obligatory’ inclusion of ICP delegates in all forums of the UN system where ‘problems covered by ICP activities could be discussed’. Not only is this placing agroindustry in a very privileged postion vis-a-vis trade unions, and other labour organisations, and governments but it is demanding advantages that other business sectors would doubtless desire. There is a certain naivety in such a plea but the implicit danger is there to see. What we may be witnessing is some early jockeying for position in what could be the first coup d’etat on the United Nations itself.
FOOD
POLICY
August
1977