In Thailand, the development of modern retail puts consumers and farmers at a loss. According to BioThai, 75 percent of the price of a banana sold in a modern retail outlet goes to the retailer and its suppliers, while only 25 percent goes to the farmer. Moreover, the price of a banana in Thailand is almost the same as the price of one sold in Europe, where 80 percent of the price goes to the retailers and towards import taxes.
Corporations & trade
GRAIN’s central focus is to support social movements across the world in their resistance to the growing corporate control over food production, markets and trade. We undertake research on how corporations – including agribusiness, large retail and the finance industry – displace millions of small-scale food producers and how trade and investment deals impose the legal conditions for it. Apart from our information work, we also support the efforts of partners and peoples’ movements to improve strategies, cooperation and popular action to challenge corporate power, and build capacity with them to achieve this.
Electronic commerce is expanding rapidly into food distribution and retail across Asia. In particular, the emergence of online food delivery services is generating significant changes to farm-to-fork food supply chains. Yet very few countries have regulations covering online food distribution, including food safety and health hazards, or even regulations covering cross-border e-commerce for food. Some of the world's largest e-commerce and retail companies are moving aggressively to take control of and expand online food retail, with major implications for local food systems, small vendors and farmers.
Ten years ago, headlines around the world reported the shocking news that a subsidiary of Daewoo Logistics called Madagascar Future Enterprise Corp., was negotiating a 99-year lease with the government of Madagascar for 1.3 million hectares of arable land – almost half of the country’s arable land. Their plan was to grow corn and oil palm in four regions of the island for shipment back to South Korea to produce animal feed and biofuel respectively. Today, far from the 1999 bankruptcy of Daewoo Motors, South Korea’s Daewoo is one of world’s largest transnational conglomerates and continues to expand a business empire that extends from manufacturing and trade to natural resources like oil and gas, minerals and food.
It has been two years since we first published this quarterly information bulletin about developments in the food retail and distribution sector in Asia. A few months ago, we thought it was time to assess whether the bulletin served its purpose and how it could improve. So we decided to run a survey and dedicate this issue to sharing some of its results.
According to different sources, transnational supply chains currently account for 30 to 60 per cent of all global trade, and depend on the work of over 100 million workers globally. On average, companies relying on transnational supply chains only directly hire 6 per cent of the labour force they actually employ. The rest is “outsourced”, often scattered across several countries and amongst thousands of suppliers.
The new wave of free trade agreements, written by and for corporate interests, provides little or no benefits for workers, communities, or the environment. Provisions being laid in these new trade deals turn most developing countries into sources of cheap and unprotected labour for transnational companies. Labour rights are being redefined in a way that allows transnational companies to impose brutal working conditions. Once these agreements are signed and ratified, the only legal protection that will fully stand is the abolition of slavery. All other labour rights will be disposable at the companies’ discretion under a wide range of circumstances.
India is being cornered to open up its markets at the ongoing negotiations of the Regional Comprehensive Economic Partnership (RCEP). A free trade agreement between 16 Asian countries, including massive manufacturers like China, RCEP will bring down import duties to zero on goods, both agricultural and industrial, for more than 92 per cent of tariff lines. Being the world’s largest trade agreement, it will impact half of the world’s population including 420 million small family farms that produce 80 per cent of Asia’s food.
In June 2017, Amazon, the world’s third largest e-commerce company, announced its acquisition over Whole Foods Market for US$ 13.7 billion. Amazon’s move seems to follow the footsteps of Alibaba, the world’s largest e-commerce company that invested US$ 1.25 billion in buying the Chinese online food delivery service Ele.me in late 2015.
Since 2002, African, Caribbean and Pacific (ACP) countries have negotiated a reciprocal free trade agreement known as the Economic Partnership Agreement (EPA) with the European Union (EU). While it was marketed as the magic bullet towards the ACP countries’ industrialisation and development, it is in fact an unfair agreement that is anchored in a colonial framework.
Though not highly publicised, the EPA has faced continued opposition from across the ACP countries, not least because of its devastating effect on small scale farmers. The case of some African countries presented here is illustrative of the way communities are fighting to regain control over their resources and protect their markets from the flooding of cheap EU processed foods, along with pesticides and genetically modified organisms.
Hundreds of people gathered in Hyderabad, India, between 22 and 26 July 2017, in opposition to the 19th round of negotiations of the 16-nation Free Trade Agreement (FTA) called the Regional Comprehensive Economic Partnership (RCEP).