1. APRIL 2007
Online
Geo file 541
Garrett Nagle
Globalisation of food production
the US market. Today just four Figure 1: The top 6 UK food retailers
Introduction feedlots feed half the cattle in the
Food has gone global. Farming has USA and these are directly Tesco 25.5%
become increasingly intensive, large connected to the four processing Sainsbury 17.4%
scale and globalised in the drive for firms that control over 80% of beef
cheaper food. Advances in processing. It is a similar tale with Morrison’s 16.1%
technology and communications agro-chemicals. In the late 1980s the Asda 15.8%
have combined with falls in the costs top 20 firms accounted for 90% of
Somerfield 5.7%
(Adapted from Taylor Nelson Sofres)
of transport to transform the way in sales. By the late 1990s 10 firms
which food is sourced. The additives controlled 90% of sales.
industry is finding ever more
ingenious ways to cut
manufacturers’ costs and increase
Economic impacts Figure 2: The world’s top ten global food
In the 1950s, of every £1 spent on retailers
their profits. The concentration of
power in retailing and food food and drink 50-60% went to the
farmer. Today, just 9% of every £1 1 Wal-Mart (US) 199 billion
processing has affected those at the
other end of the scale, namely spent on food and drink goes back to 2 Carrefour (EU) 86 billion
farmers in LEDCs and small farmers the farmers. Britain’s food market is 3 Ahold (EU) 53 billion
in MEDCs. Increasingly, modern dominated by five big supermarket
farming methods are having a groups: Tesco, Sainsbury’s, Asda, 4 Kroger (US) 51 billion
negative impact on the environment Morrison’s and Somerfield (Figure 5 Metro (EU) 47 billion
and on the trafficking of 1). The combined profits of the top 6 Albertson’s (US) 39 billion
populations. four supermarkets was £2.1bn in
2000. Approximately half of the 7 Kmart (US) 39 billion
In the last 50 years a revolution has UK’s food is now sold from just 1000 8 Rewe (EU) 36 billion
taken place in the food industry. giant stores. The top 20 food brands
9 Tesco (EU) 34 billion
Every step of food production – how in the UK spend over £100 million a
it is grown, harvested, processed, year on marketing. In the USA $30 10 Aldi (EU) 33 billion
distributed, retailed and cooked – billion is spent on advertising by US (Source: Cap Gemini Ernst and Young)
has changed. Until the Second food industries. The world’s top
World War farmers were the major global food retailers have huge Figure 3: The top 10 global food
players in the food industry. After turnovers (Figure 2). Despite the manufacturers (total food sales US$
the war they were given grants and increasing power of manufacturers billion)
subsidies, but these were merely to and retailers, it is likely to be
consumers that drive the food 1 Nestle 46.6
stop them going out of business.
They were supported as long as they ‘chain’ in the future. 2 Philip Morris (Kraft) 38.1
restructured. Many therefore 3 Con Agra 27.6
intensified, increased efficiency and Food and drink is the largest
adopted labour-saving technologies manufacturing sector in the UK. It 4 Unilever 26.7
such as agro-chemicals, machinery accounts for over 14% of 5 PepsiCo 25.1
and high-yielding varieties (HYVs) manufacturing output and has an 6 ADM (corn milling) 23.5
of plants. annual turnover of over £66 billion.
Some 470,000 people are employed 7 Tyson (meat processing) 23.4
Fifty years later some of the in food and drink manufacturing. 8 Cargill 21.5
subsidies are being cut. While 9 Coca-cola 20.1
‘farmer power’ has decreased in the In the USA, over 13,000 new food
last 50 years, the power of retailers items are launched each year to add 10 Mars 15.3
and food processors has increased. to the 300,000 already available. In
(Source: Global Food Markets Leatherhead Food
The rise of large food processing Europe over 10,000 new products are International)
companies has been phenomenal. launched each year but over 90% fail
The market share of the top 20 US to survive a year. Only a minority of between a third and 40% of all UK
food manufacturers has doubled food brands and products will road freight. The food system has
since 1967. Just 100 companies now become global products and join the become almost completely
account for 80% of all value added ranks of Nestle, Pepsi, Coca-Cola, dependent on crude oil. This means
i.e. the increase in price over and Kelloggs, Heinz and Mars (Figure food supplies are vulnerable,
above the raw farm food prices. 3). Of all the world’s top 50 inefficient and unsustainable.
consumer brands, food accounts for
The level of manufacturing a fifth. Between 1978 and 1998, the distance
concentration is also remarkable, at food was transported increased by
regional, national and global levels. The global food industry has a 50%. Transporting animals long
In the mid-1970s the top four US massive impact on transport. Food distances to slaughter has made it
beef packers controlled about 25% of distribution now accounts for almost impossible to contain
Geofile Online © Nelson Thornes 2007

2. April 2007 no.541 Globalisation of food production
Figure 4: Geography of a Christmas dinner countries have kept their quotas and
continued to subsidise their
agriculture. The terms of trade are
unfair - poorer countries are paid
UK
Sprouts
lower prices for their products
200 km relative to their imports. Rich
countries spend over $300 bn a year
Italy Potatoes 2,400 km subsidising their farmers. The EU’s
Common Agricultural Policy, which
Spain
subsidises farmers in the EU, costs
Carrots each family of four in Britain £16 a
1,600 km week in higher taxes and food prices.
These subsidies have a devastating
effect on developing economies.
Zambia Thailand They encourage over-supply, which
Runner beans Poultry
17,000 km leads to low prices and dumping.
8,000 km
Changing suppliers: the rise
Zimbabwe
Mange tout of Vietnam
8,000 km In 1990 Vietnam produced very little
coffee. In the 1990s, encouraged by
the World Bank and International
contract to supply its stores in Monetary Fund to restructure its
The wastefulness
of a Christmas dinner
several countries. Del Monte, economy, open up its markets and
GeoFile Series 25 sourcing in Latin America, won a
Issue 3
Fig 541_04 Mac/eps/illustrator 11 s/s
invest its energies in generating
The ingredients of a traditional PUBLISHING of the contract and
NELSON THORNES
large chunk foreign exchange, Vietnam began an
Christmas meal bought David Russell Illustrationof the scale, agreed a deal
Artist: from a
because aggressive programme to encourage
supermarket may have cumulatively which enabled Wal-Mart to slash its its farmers to move out of domestic
travelled 24,000 miles, according to a prices. Bananas fell from £1.08p per production of rice (the price of
report, ‘Eating Oil’. Buying the kilo in August 2002 to 81p at the end
ingredients for Christmas dinner in a
which was volatile, thanks in part to
of March 2003. dumping of subsidised harvests from
London supermarket, the report found
that poultry could have been imported the US) and into growing cash crops
The event illustrates some of the for export, particularly coffee.
from Thailand and travelled nearly
17,000 km, runner beans came from
global forces that have transformed
Zambia (nearly 8,000 km), carrots the food chain. By the end of the Vietnam is not ideally suited to
from Spain (1,600 km), mangetout 1990s, three-quarters of world coffee production and nearly all its
from Zimbabwe (over 8,000 km), banana trade was in the hands of just crop is of the lower quality robusta
potatoes from Italy (2,400 km), and five companies: Chiquita (26%), type used for instant coffee, rather
sprouts from Britain, where they were Dole (25%), and Del Monte, Fyffes than the arabica beans which fetch
transported around the country before and Noboa, (8% each). Between 1990
reaching the shop (200 km) (Figure
top prices. But with the heavy use of
and 2000 the value of banana exports fertilisers and pesticides, by 2000 it
4). By the time trucking to and from from the Windward Islands fell from
warehouses to stores was added, the had turned itself into the second
$387m to $161m. largest coffee-producing country in
total distance the food had moved
was over 38,000 km, or the equivalent the world. It was so successful, in
of travelling around the world once.
Since the Second World War, a fact, that it flooded the market just
Transporting ingredients such great series of trade talks sought to remove as the Brazilians were also increasing
distances makes food supplies barriers to trade by lowering tariffs. their yields as a result of increased
vulnerable. From 1947 to 1994 the General intensification and mechanisation.
Agreement on Tariffs and Trade
(GATT) was the forum for global
outbreaks of serious diseases such as negotiations. The World Trade From rainforest to chicken
foot and mouth. Journeys of 200-400 Organisation (WTO) was established nuggets
miles to slaughter are not unusual in 1995, at the end of the Uruguay
for animals today The average Round of GATT talks, which were According to a report by
journey to abattoir has been held between 1986 and 1994. It is Greenpeace, a small number of the
estimated at 100 miles. In order to be now the forum for negotiating world’s largest food companies and
transported long distances food must international trade rules. Agriculture commodity traders, including
be heavily processed, packaged, or was included in the original GATT McDonald’s in the UK, are driving
chemically preserved. talks, but the Uruguay Round’s illegal and rapid destruction of the
agreement on agriculture specifically Amazon rainforest.
Unfair trade committed countries to lift trade
restrictions and abolish distorting The report, a six-year investigation
In 2002 Wal-Mart, the world’s subsidies within food production. of the Brazilian soya bean industry,
largest retailer, which owns Asda in This has not happened. investigated a 7,000 km chain that
the UK, renegotiated its banana starts with the clearing of tropical
buying. It invited the biggest LEDCs have been forced to open up rainforest by farmers and leads
distributors to bid for a global their markets while rich western directly to Chicken McNuggets
Geofile Online © Nelson Thornes 2007

3. April 2007 no.541 Globalisation of food production
being sold in British and European Figure 5: The hidden cost of farming
fast food restaurants. It also alleged
that much of the soya animal feed • Contamination of drinking water by
arriving in the UK from Brazil is a pesticides £120 million
product of ‘forest crime’, and that
McDonald’s and British nitrates £16 million
supermarkets have turned a blind cryptosporidium £23 million
eye to the destruction of the forest. phosphates and soil £55 million
The Greenpeace report detailed how • Damage to wildlife, habitats, hedgerows
the world’s largest private company, and drystone walls £125 million
the £40 bn a year US agribusiness • Emission of gases £1,113 million
giant Cargill, built a port and 13 soya
storage works in the Amazon region. • Soil erosion £106 million
In two years, deforestation rates • Food poisoning £169 million
doubled to 28,000 hectares (69,000
• BSE £607 million
acres) a year, land prices rocketed
and soya took off as farmers from all Total £2.3 billion
over Brazil arrived to take advantage
of guaranteed markets. Cargill export to the UK are women who receive an average of 16 pesticide
provides farmers with seeds and have migrated for work. They can sprays. Lettuces can come from Spain,
agrochemicals to grow hundreds of work more than 12 hours a day Turkey, Zimbabwe and Mexico are
thousands of tonnes of beans a year, harvesting and grading beans, sprayed on average 11.7 times.
which the company then exports to carrots, baby corn and other produce
Liverpool and other European ports, to fill the crates destined for MEDC Air pollution and greenhouse gas
mainly from Santarem, on the supermarkets. emissions from farming cost more
Amazon river. than £1.1 bn annually. About 10% of
Improved yields and the UK’s greenhouse gas emissions
From Liverpool, much of the high- come from the methane from
protein soya, which is used as animal environmental impacts livestock digestion and manure and
feed, goes to Hereford-based Sun nitrous oxide from fertilised land.
In the last 50 years, wheat yields have
Valley, a wholly owned Cargill
increased from 2.6 to 8 tonnes per
subsidiary that rears chickens. The
hectare, barley from 2.6 to 5.8 tonnes,
company provides McDonald’s, the
and each cow produces twice as much Water problems and global farming
largest fast food company in the in Kenya
milk.
world, with up to 50% of all the
chicken it serves in Britain and The shores of Lake Naivasha in the
Cleaning up the chemical pollution,
across Europe. ‘Happy Valley’ area of Kenya are now
repairing the habitats and coping with
blighted. Environmentalists blame the
sickness caused by industrial farming
According to Greenpeace, public and water problems on pollution from
costs up to £2.3 billion a year (Figure pesticides, excessive use of water on
indigenous land is being seized by
5). It now costs water companies the farms, and deforestation caused by
farmers using bulldozers and even
£135m-£200 million to remove migrant workers in the growing shanty
slave labour. In 2005 more than
pesticides and nitrates from drinking towns foraging for fuel.
25,000 sq km of Amazon forest were
water.
felled, largely for soya farming. British and European-owned flower
Food processors usually want large companies grow vast quantities of
Social impacts quantities of uniform quality produce flowers and vegetables for export but
the official Kenyan water authority,
The food and farming industry in or animals at specific times. This is
regional bodies, human rights and
the UK is dependent on migrant ideally suited to intensive farming development groups as well as small-
labourers. 25,000 people are allowed methods which favour synthetic scale farmers have accused flower
to come to the UK under the chemicals, land degradation and companies near Mount Kenya of
government’s seasonal agricultural animal welfare problems. ‘stealing’ water which would normally
workers scheme. However, 50,000 fill the river. Kenya’s second largest
are needed, according to the Animals are reared on production river, the Ngiro, is a life-sustaining
government’s policy commission on lines. About 750 million broiler resource for nomadic farmers, but it
chickens are reared and slaughtered in also sustains big business for flower
food and agriculture. The need for
farms supplying UK supermarkets.
labour is no longer confined to Britain each year, 98% of them
seasonal peaks, but is year-round. intensively. They spend the last week According to the head of the water
Sunday trading, long opening hours of their lives in a space the size of an authority, the twelve largest flower firms
and constantly changing orders A4 sheet of paper. The spread of may be taking as much as 25% of
means that workers are needed at disease is a problem In two decades, water normally available to more than
short notice and for unsocial hours. new production methods have 100,000 small farmers. Locals and
increased a dairy cow’s average yield campaigners say the river now peters
In parts of Kenya, for example, from 4,000 to 5,800 litres a year. out 60 miles short of where it used to,
many of the labourers on the and the overuse of water was
intensive vegetable farms and in the The UK now imports four out of every contributing directly to conflict between
small-scale farmers.
packing factories producing food for five pears consumed. Cox’s apples
Geofile Online © Nelson Thornes 2007

4. April 2007 no.541 Globalisation of food production
Figure 6: The spread of Sudan 1
Key
1 Source = Mumbai
2 UK
k
3 from UK to: ij
a USA b 2 m
b Canada
l
c Bermuda
a h
d Bahamas g
e Antigua
f Grenada c
g Spain n
d 1
h France
e
i Belgium f
j Netherlands
k Denmark
l Austria
m Switzerland
n Italy, Greece
and Malta
GeoFile Series 25 Issue 3
In the last 60 years farmers have India. In 2005 541_06 Mac/eps/illustrator 11 Conclusion
Fig 500,000 tonnes of s/s
NELSON THORNES PUBLISHING
ripped up about 190,000 miles spices were exported to 120
Artist: David Russell Illustration
(304,000 km) of hedgerow, destroyed countries at a value of $1.5 billion The consolidation and
97% of meadows, 60% of ancient (£780m). internationalisation of the food retail
woodland, and farmland birds have and manufacturing industry can be
suffered a catastrophic decline. Birds The 2005 Sudan 1 Crisis related to expected to continue. In the near
that depend on agricultural fields one batch of contaminated chilli future, four out of five large retail
have fallen in numbers by as much powder containing the Sudan 1 dye. organisations will operate on a
as 50% since 1970. In 2002 Volga Spice, an Indian food worldwide scale. There will also be a
company, sold five tonnes of chilli number of dominant local and
Since 1945 Britain has lost 65% of its powder coloured with Sudan 1 to regional operators. A similar
farmers. Now just 1.2% of the Gautam Export, also based in India. situation is likely among the food
population work on the land. It is Gautum Export shipped the manufacturers. About 10 food
not just in MEDCs. India, with over contaminated powder to Harwich in manufacturers will operate globally,
700,000 small farmers, expects to Essex. From there it was sold to East with 20 to 25 global brands, along
lose 50% by 2026. Anglian Food Ingredients based in with a number of consumer goods
Essex, and then on to Unbar Rothon companies that will be dominant in
It is estimated that a kilogram of in Essex. The powder was sold to particular countries or regions.
blueberries imported by plane from Premier Foods Oldham, who in turn
New Zealand produces the same distributed it to more than 200 other References
emissions as boiling a kettle 268 firms across a dozen countries in
Atkins, P., and Bowler I., 2001 Food
times. Intensive farming in the UK Europe (Figure 6), and also to North
in Society, Arnold.
has led to soil erosion and soil loss America and the Caribbean. Over
Daniels, P., et al., 2005, An
and increased the risk of flooding in 500 food products had to be recalled,
introduction to Human geography –
some areas by 14%. This has added which revealed just how vulnerable
Issues for the 21st century, Pearson.
up to £115m to insurance bills. the food chain was to a rogue batch
Robinson, G., 2003, Geographies of
of contaminated powder.
Agriculture, Pearson,
Sudan 1 crisis
Globalised farming also has an
impact on human health. The recall
of hundreds of products
contaminated with the cancer-
Focus Questions
causing dye Sudan 1 caused the 1. Explain what is meant by the ‘globalisation of food supply’.
biggest food scare since BSE. Sudan
1 is normally used to colour petrol, 2. Suggest ways in which some farmers lose out as a result of globalised
solvents and boot polish. The Food farming.
Standards Agency has said that
while Sudan 1 could increase the 3. Outline the environmental impacts of intensive farming.
risk of cancer, the risk is ‘generally
likely to be very small’. Nearly half 4. Discuss the social and economic impacts of the globalisation of food
of the world’s spices come from production.
Geofile Online © Nelson Thornes 2007