Toward New Models for the Scale and Practice of Agriculture, No. 2

Our first post, with an introduction to this series, is here.

“Dumping grain on another country is a classic maneuver in economic warfare. When a country’s borders are opened by force or by choice, by structural adjustment or by neoliberal trade agreement, when tariffs and other forms of protectionism are finally scotched, heavily subsidized multinational agribusinesses can flood the new market with commodities at prices less than their production costs.

That is, these companies are happy to sell their foodstuffs abroad at a loss. That doesn’t make sense, you say. Aren’t these guys in business for profit? They are indeed. The deficits are in actuality a cold-blooded calculation. The objective is to drive previously domestic sectors unable to compete with that kind of pricing, out of business. Once the mom-and-pop competition is rubbed out, Walmart-style, the multinationals, their competition cleared off the field, can impose what prices they please across a market they now dominate. [….]

When what is illegal at home in the United States is perfectly legal elsewhere, move your operations offshore. In many countries of the Global South, few labor laws and environmental regulations are on the books. For those that are, enforcement is lax or bribed away. On the other hand, when what is legal in the United States in banned elsewhere, export U.S. rules. Subject other countries’ domestic operations to the kind of discipline of the invisible hand one’s own multinationals avoid like the plague. Impose a protectionism in reverse. [….]

In a kind of bioeconomic warfare, agribusiness can prosper when deadly influenza strains originating from their own operations spread out to their smaller competition. No conspiracy theory need apply. No virus engineered in a laboratory. No conscious acts of espionage or sabotage. Rather we have here an emergent neglect from the moral hazard that arises when the costs of intensive husbandry are externalized. The financial tab for these outbreaks is routinely picked up by governments and taxpayers worldwide. So why should agribusiness bother with ending practices that repeatedly interrupt economies and will someday produce a virus that kills hundreds of millions of people? Companies are often compelled to invest in livestock vaccination and biosecurity—however incomplete—but if the full costs of outbreaks were placed on their balance sheets larger operations as we know them would cease to exist.

Corporate farms are also able to skirt the economic punishments of the outbreaks they cause by their horizontal integration. They can weather the resulting bad publicity and intermittent breaks in their commodity chains by increasing production in affiliates elsewhere. [….] A supply chain arrayed across multiple countries can compensate for the interruptions in business, even as it also, ironically enough, increases the risk of influenza spread.

In contrast, many small farmers suffer catastrophically from this virus dumping, even when they’re under contract to agricultural companies. Smallholders typically can’t afford the biosecurity changes needed to protect themselves from such outbreaks in the first place or the wholesale repopulation of their livestock in the aftermath (even when subsidized in part by the government). Living market day to day, they can’t afford the losses incurred upon their already thin margins when their operations are disrupted by the government-imposed quarantines and culling campaigns that follow.

That’s nasty. But the insult to injury is in agribusiness’s faux-righteous follow-up. And here we see the kind of conscious manipulation at the heart of grain dumping. In an act of evil genius, multinationals support national efforts to institute biosecurity standards only the largest companies can afford. [….] The diseases that wipe out Big Food’s smaller competitors also offer an opportunity to cripple them between outbreaks.”

Rob Wallace, from an article in Farming Pathogens, 11 November 2010 (Big Farms: 112-117).