Saturday, October 30, 2010

Have Cargill, Con-Agra and the like contributed to global hunger?

Dear Colleagues

Someone recently told me a story about exporting product to Africa ... and then told me something about constraints that emerged from the US Government and major actors in the global food marketing chain that stopped the business.

In turn, this reminded me of my own efforts to export powdered milk to Africa, and the hurdles that I had to overcome in order to do that. What with subsidies ... or not ... from the USA or the European Union ... the export licensing systems ... the international financial rules and regulations ... the local competition, both fair and legitimate and unfair and essentially unlawful ... and what should have been easy became a nightmare. I made one shipment ... lost money ... and gave up.

But the people ... that is corporate organizations and others ... who are on the inside and in control of the trade are doing exceptionally well. The end prices are high ... the source of products are producing large quantities and contract prices are low ... not to mention all sorts of subsidies. The problem for society is that nobody has much of a clue how much these things should cost and how much is a reasonable price.

This information ought to be very easy to see and to analyze. Commodity markets do not add clarity ... in the main, they add speculative confusion ... and another level of cost that has to come from somewhere! The business world ... and many of their partner beneficiaries ... wants this sort of simple information to be difficult or impossible to see. This is unacceptable ... but it is the way things work.

How much big organizations ... organizations like Cargill. Con-Agra and the like have contributed to global hunger is difficult to assess. My guess would be that these companies have produced good profits over the years without moving the global hunger index very much in the right direction. Compared to what they could have done, I would argue that they have performance very poorly. It would be great to see true value metrics applied to their activities!

Peter Burgess

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