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Thursday, June 26, 2008

Our diet of destruction

Huge areas of the Amazon rainforest are being cut down to satisfy global demand for soya. But how did this crop and a handful of others come to dominate our diet so completely? In an extract from her new book, Felicity Lawrence investigates the faceless trading giants who really decide what goes on our plates.

by Felicity Lawrence

The Guardian (June 16 2008)

Look at a few packets in a typical kitchen cupboard, and you will notice a disconcerting overlap between the labels of apparently completely different foods. A handful of ingredients, some of them barely used as food in the west before the second world war, crop up in everything from baby food to cat food to processed meals. The same half-dozen heavily subsidised commodities - soya, rapeseed, palm oil, corn, sugar and rice - are broken down into their individual parts and endlessly reconstituted. They are sold back to us as processed food or turned into animal feed to produce the factory meats that have conquered our diets in the past half-century. How did such a transformation come about?

When you look back at the origins of much of today's industrialised food system, what you see is the ebb and flow of empire. First there were the British imperial ambitions that turned slave-produced sugar from the colonies into the engine of emerging capitalism during the industrial revolution. Later the prewar European powers developed and controlled new fats such as margarines. Today we are living with the postwar American model, a privatised form of empire that reached into every corner of world food supply in the second half of the twentieth century.

The result has been a kind of food Fordism. We are fed a production-line diet that is homogenised and bolted together from standard commodity parts. The parts, many of them created out of American agricultural surpluses, are largely controlled by an oligopoly of US-based trading and processing companies - Cargill, ADM, Bunge - that are little known in the UK. All three companies are now expanding in China and heavily involved in spreading the western industrialised diet, with its unsustainable dependence on fossil fuels and extravagant use of grains. As the Chinese move up this processed-food chain, the diet-related diseases that have afflicted us in the west are growing there too.

It took a journey of more than 7,000 kilometers to the heart of the Brazilian rainforest for me to understand some of the power structures in this food chain. It was the rise of the humble soya bean that opened a window on the mechanics of today's structure, and the environmental and social toll it exacts.

It is only from the air that you can absorb the vastness of the Amazon. What happens to the rainforest that surrounds the world's largest river system will affect every single one of us, as experts in climate change constantly point out. A fifth of the planet's fresh water is contained here, and the trees recycle it back into the atmosphere, from where it drives the world's weather.

But Brazil is the new agricultural frontier, and forest clearance, much of it for soya production, has been taking place on a scale from which campaigners fear the forest may not recover. Greenpeace has been tracking deforestation and agreed to take me up in its spotter plane in 2006 as it was launching its fight to stop the food industry destroying the Amazon.

From the window of the plane on one side I could see mile after mile of the velvet folds of virgin forest. Where man had not ventured with chainsaw and bulldozer, the trees were giving off water vapour like a thousand puffs from a life-giving inhaler. But on the other side was an enormous area recently planted with soya. It looked as though a giant industrial lawnmower had cut a swath through the jungle, and the luminous green trail it had created shone through a dry heat haze. "So who is buying all that soya, and how on earth do they get it out?" I shouted over the roar of the engine. The answer had to wait. A storm was blowing in and we quickly turned back through the flashes of lightning for Santarém, the frontier port built deep in the Amazon basin.

That night I watched from the roof of my hotel as a new storm blew great squalls hundreds of miles up the Amazon from the Atlantic. On the waterfront below, the baroque blue cathedral, built by the original colonisers, the Portuguese, came and went from view in the enveloping rain. Its twin towers and pediment still present a proud facade to anyone coming up the river's main navigation channel, but the paint was peeling now, the legacy of the sugar plantations and slavery fading. The centre of gravity had shifted. A few hundred metres up the river, Cargill has built its own monument to power, an enormous, gleaming loading and storage facility for soya. The elevator towers of this $20 million (GBP 10.2 million) grain terminal are testaments to the new gods of transnational trading efficiency and global economic domination. The digging of the port here has brought Brazil's soya closer to its main European markets.

Just as the new railroads had been vital to opening up the prairies of North America, this newly constructed infrastructure was driving the transformation of the Amazon and helping Brazil meet the apparently insatiable global demand for soya. Cargill, together with ADM and Bunge, is responsible for about two-thirds of the total financing of soya production in Brazil. They provide the seed, fertiliser and agrochemicals to the ranchers, and buy and store and ship the crops to Europe. But how was the demand for all those beans created?

Bake a soya bean and - provided you have first soaked and boiled it long enough to neutralise its toxins - you can make a dish that is cheap and cheerful. It may be slightly indigestible still and make you fart, but it is nevertheless useful for providing complete protein in inexpensive vegetable form.

As a whole raw bean, soya has its commercial limitations. Crush it, however, and the possibilities become infinite as it is separated into its more lucrative parts. The oil can be extracted with solvents and degummed. The lecithin can be removed from the resulting sludge to be sold for a thousand and more food-processing purposes. Then, deodorised and hydrogenated, the oil can be used to make, or fry, any number of fast foods, snacks and convenience meals. The vitamin E, which has the irritating habit of reducing shelf-life, can be stripped out and turned to money elsewhere. So too can the soya sterols that can command a premium as technofoods - cholesterol-lowering ingredients for margarines, yoghurts and drinks.

Once the oil has been removed, the defatted soya bean meal, which is full of protein, can be fed to intensively farmed chicken, cattle and pigs to turn them into highly productive factory units - intensive dairy cows that can deliver ever greater yields of milk, chickens that grow to shop weight in just a few weeks, pigs and cattle that fatten faster than they ever could on grass or forage.

The vast majority of soya is used to feed factory-farmed animals. Chicken has a particular attraction for the livestock industry, which refers to the birds not as flocks but as "crops", for the good reason that they grow fast enough to produce a return in little more than a month. For the commodity traders and processors, the livestock revolution has represented the best way to move up what they call the value chain. You can make a good margin on trading grain and soya, especially if you are a powerful enough presence in the global markets. But feed your surplus to animals - it takes about three kilograms of protein feed to produce half a kilo of chicken protein - and you concentrate your resources. Persuade the world to eat vast quantities of this cheap meat, consumed preferably in a highly processed way that divides the parts and separates out the "high value" lean meat and treats much of the rest as waste - and you make far greater margins.

It required technological breakthroughs and government protection to create this market, though. Soya meal was used experimentally in animal feed in the 1930s but farmers were reluctant to use it because with its oil still in it was regarded as indigestible to chickens and pigs. Then researchers at ADM worked out how to heat-treat it to overcome the problem. The oil was similarly regarded as barely fit for consumption because it smelled so bad, until the Americans, following the tanks advancing through Germany, acquired the technology from the defeated enemy to get rid of the "off" flavours.

That left the way open for the US to promote the soya that suited its agricultural conditions as part of the reconstruction of Europe in the 1950s.

The US came out of the second world war with its agricultural base intact, but the farming lands of its European allies and of Germany had been devastated. With millions desperately hungry, the US announced its Marshall plan to help rebuild western Europe with financial aid. But it had another crucial role: the removal of tariff barriers that might hinder US access to foreign markets was made part of the new terms of trade with the non-communist world. Of the $13 billion in financial aid paid under the Marshall plan between 1947 and 1952, more than $3 billion was spent by European countries on imports of US food, animal feed and fertiliser.

As Europe recovered, soya exports to other countries were supported by other US food aid programmes. In 1967, 86% of all US soya oil exports were subsidised under its food aid law. Meanwhile, in the Kennedy round of talks for the General Agreement on Tariffs and Trade in the mid-1960s, the US insisted that if Europe wanted to keep its agricultural protections, it must open up its markets to more US soya exports.

The raw ingredients for today's food system have, in other words, been kept cheap for transnational corporations by government policy. And where US subsidies go, western diets have a habit of following. American exports have created whole new patterns of consumption. Demand has been a function of price, availability and production, just as it was with the rise of sugar consumption in the 18th century.

Between 1995 and 2005, $165 billion of American taxpayers' money was used to support US agricultural commodities. Soya, corn, rice, wheat and cotton accounted for ninety per cent of that money. Sugar was also heavily subsidised. The real beneficiaries of this system of government support have not been US farmers, who have gone out of business in their thousands, but the mainly US-based trading giants. For subsidies have allowed them to export grains at less than the cost of production, making it impossible for other countries to compete, while bringing the money from added-value markets back home. In this they mirror the patterns of trade established between previous empires and their colonies.

These trading giants have remained shadowy in European perception, despite their colossal footprint. Cargill, the largest privately owned corporation in the world in most years, was said in testimony to the US senate in 1999 to control 45% of global grain trade, including 42% of US corn exports, a third of all soya bean exports and about twenty per cent of wheat exports. It is also the world's largest crusher of oilseeds such as soya and rapeseed. Since it is a private company and not obliged to publish detailed accounts, more recent and accurate share figures are hard to come by. It declines to comment on its market shares, but it has, if anything, consolidated its position since then, although its areas of concentration shift. Its revenues in 2007 were $88 billion. Most of us eat its products in some form every day, yet many of us have never heard of it. Nor had I before I started writing about the politics of food, but since then it has been hard not to stumble across its operations in every country whenever I visit a food factory, industrial farm or fast food or supermarket supplier.

ADM (Archer Daniels Midland), another US-based grain trading corporation, is one of the world's largest processors of soya beans, corn, wheat and cocoa, and also has a huge portfolio of interests, from making sweeteners and food processing ingredients to energy and animal feed production. Its global sales in 2006/7 were $44 billion. Almost half of them came from making animal feed, vegetable oils and emulsifiers from oilseeds such as soya.

Two other grain and oilseed giants are part of this trading nexus that dominates food supply. Bunge, which expanded through the late nineteenth century as a grain trader in South America, is now a transnational with headquarters in the US. It is the world's largest exporter of soya beans and a major corn and oil processor. The Louis Dreyfus group, a French family-owned private company, has vast grain, sugar, and energy trading interests around the world and now focuses on financial aspects of commodity trading. In the US it has joint grain ventures with ADM and Cargill. (EU subsidies have achieved a similar position for a handful of its corporations, mainly those processors whose power was established before the war.)

As well as buying and selling agricultural commodities, these four global companies control refining and crushing plants and turn those cheap, subsidised commodities into a myriad other ingredients, from starches to syrups to fats to animal feed. They also play the markets, and have vastly complicated corporate structures that enable them to shift transactions and profits from subsidiary to subsidiary.

Cargill, the behemoth, is "the undisputed ruler in the global grain trade and extends its tentacles into every aspect of the global food system", according to Brewster Kneen, the company's unauthorised biographer. Cargill initially built up its power in the 1870s, in the speculative era of the American agricultural frontier when US grain, along with sugar, began providing the fuel for workers in an industrialising, urbanising Britain. It began with a family of grain traders who bought up storage facilities in the US on strategically placed transport routes, the new railroads and the waterways of the Great Lakes and Mississippi. There has perhaps been nothing quite like it in terms of reach since the days of the East India Company.

Cargill rarely gives interviews, but in the words of its company brochures: "We buy, trade, transport, blend, mill, crush, process, refine, season, distribute around the clock around the globe". And: "We are the flour in your bread, the wheat in your noodles, the salt on your fries. We are the corn in your tortillas, the chocolate in your dessert, the sweetener in your soft drink. We are the oil in your salad dressing and the beef, pork or chicken you eat for dinner. We are the cotton in your clothing, the backing on your carpet and the fertiliser in your field."

Cargill owns two-thirds of the company that is the world's largest producer of fertiliser ingredients, with major factories in North America, South America and China. Cargill's subsidiary Sun Valley produces half of all the chicken products used by McDonald's across Europe and is a leading supplier of chicken to UK supermarkets. Cargill accounts for nearly half of UK and more than a third of all European production of glucose syrups. And, as I have found on my own journeys around today's globalised food system, it has as often as not been the feed for your cow's milk, the emulsifier and fat in your ready meal, the oil that fried your crisps, the soya proteins in your veggieburger ...

History shows that empires rise and fall, however, and that the fall when it comes tends to be fast. Food empires are likely to be no different. We are now entering a period of rapid transition. The postwar food system, dependent on prodigious quantities of crude oil for its production, has not only pushed us to our biological limits but is hitting the environmental buffers. After half a century in which they shaped the nature of global diets with the disposal of their agricultural surplus, the Americans have done a sudden about-turn. With the price of oil constantly breaking new records, they want their surplus back to keep their cars on the road. The US government has started pouring subsidies into the production of ethanol from corn. Grain prices have been soaring. The standard commodity parts are no longer cheap, but we are left with the legacy of the old economic order, with diets that were created out of excess.

Adapted from Eat Your Heart Out: Why the Food Business Is Bad for the Planet and Your Health, by Felicity Lawrence, to be published by Penguin on June 26. © Guardian News and Media Limited 2008

Bill Totten


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