Abstract
Agribusiness corporations primarily involved in providing livestock feed—colloquially known as the “ABCD” (Archer Daniels Midland (ADM), Bunge, Cargill, and the Louis Dreyfus Company)—have begun to enter the fishing industry around the world. I argue that this recent entry of agribusiness multinationals in aquaculture, focusing particularly on Cargill, arises to take advantage of strategic opportunities to proliferate, or create links with respect to feed production and development within value chains. Concerning such opportunities, as I document, Cargill first leveraged its access to cheap, overproduced grains in the 1990s, developing ways to insert corn and soy into what it calls “aquafeed.” Next, the multinational firm began proliferating links within fishing industry value chains in the form of introducing new technical assistance services, as well as creating feed supplements and additives. As I explain, these efforts to proliferate links in the supply chain exist as opportunities to charge rents, or surplus profits, which is possible because Cargill retains the right to control the new products and services. An additional link in the chain includes how the corporation has expanded its role in the global food system from its past as an intermediary, to engaging consumers in direct ways by attempting to create their preferences. I conduct my analysis of Cargill’s corporate strategy by focusing on reporting from the fishing industry publication, Aquafeed News, detailing developments from 2000 through 2023.
Similar content being viewed by others
Notes
This point is emphasized by David Harvey, see Chapter 1 from Limits to Capital (1982) [2006].
Cargill’s timeline shows the extent of the firm’s attempts at diversification overtime. For details, see https://www.cargill.com/about/cargill-history-timeline. Accessed 30 March 2023.
The report from Commodity and Futures Trading Commission (CFTC) on cornering the market can be found here, https://www.cftc.gov/sites/default/files/idc/groups/public/@lrceacases/documents/ceacases/cargill-aug1940-857.pdf. Accessed 30 April 2023.
According to Cargill’s 2021a, b, Aqua Nutrition Report, 6 feed mills are in Global North countries (US, Norway, Canada, Scotland) and 13 are in the Global South (Chile, Mexico, China, Ecuador, India, Indonesia, Thailand, Vietnam). Furthermore, while some reporting notes research facilities in Indonesia and Mexico, it appears that most other research is done in Europe and the US.
For a list of the different rules and regulations on aquaculture, see https://nationalaglawcenter.org/overview/aquaculture/.
A full list of the Feed4Thought surveys can be found on Cargill’s website, available here https://www.cargill.com/animal-nutrition/feed-4-thought/voice-of-the-customer. 30 August 2023.
A link to the publication with the press release can be found here: https://etypeproductionstorage1.blob.core.windows.net/$web/Production_Prod/Jobs/125/2021-04-12/191076/PreProcessedPDF/grg_188431_prep_20210412112239690.pdf. Accessed 5 May 2023.
Cargill’s X (formerly known as Twitter) page with a link to the survey can be found here, https://twitter.com/Cargill/status/1430183194247184384. Accessed 21 September 2023.
Links for these respective websites where they reproduce Cargill’s press release can be found here https://www.winsightgrocerybusiness.com/americans-will-splurge-sustainable-seafoodsurvey; https://www.foodmanufacturing.com/consumer-trends/news/13165480/survey-says-americans-will-splurge-on-sustainable-seafood; https://www.lrqa.com/en/latest-news/survey-says-americans-will-splurge-on-sustainable-seafood/. Accessed 30 June 2023.
References
Primary sources
Aquafeed. 2011. Canada – University of Saskatchewan Feed Research Centre Officially Open.
Aquafeed. 2014. Cargill grant will help Kansas State University develop Feed Safety Development Center.
Aquafeed. 2015a Cargill to Invest $30 million in Ecuador shrimp feed plant in joint venture with Naturisa. 15 July.
Aquafeed. 2015b. Cargill launches Smartshield program to help consumers battle EMS. 15 August.
Aquafeed. 2017. Cargill survey finds sustainability of seafood is important to American consumers. 17 August.
Aquafeed. 2019a. Cargill and Innovafeed partner to bring innovative and sustainable feed. 27 June.
Aquafeed. 2019b. Cargill and Skretting join forces to reduce environmental impact in Norway. 12 February.
Aquafeed. 2019c. Chile – Cargill launched water quality analyze tool for fish farms. 30 January.
Aquafeed. 2021a. Leading EU organizations partner to create the most sustainable Salmon for the future. 23 August.
Aquafeed. 2021b. Cargill cuts all carbon emissions at Norwegian Bergnest Feed Mill. 15 March.
Aquafeed. 2021c. Cargill’s new program charts new course in seafood sustainability. 1 March.
Aquafeed. 2022a. Cargill to enter into joint venture to increase shrimp feed production capacity in Ecuador. 29 October.
Aquafeed. 2022b. Cargill to build new soybean processing facility in Southeastern Missouri. 19 May.
Aquafeed. 2023a. Aquafeed companies back initiatives for fisheries improvement. 27 April.
Aquafeed. 2023b. Aquaculture companies issue an ultimatum to Northeast Atlantic blue whiting industry. 1 February.
Cargill. 2018. More fish please, say U.S. and British consumers—and make it healthy. https://www.cargill.com/2018/more-fish-please-say-us-and-british-consumers. Accessed 10 April 2023.
Cargill. 2020. Consumer support of farmers grows as a result of COVID-19 challenges, new shows. https://www.cargill.com.vn/en/2020/consumer-support-of-farmers-grows-as-a-result-of-covid-19. 10 April 2023.
Cargill. 2021a. Cargill Aqua Nutrition: Sustainability Report 2021. https://www.cargill.com/doc/1432219325606/cargill-aqua-nutrition-sustainability-report-2021.pdf. Accessed 10 May 2023.
Cargill. 2021b. New study finds consumers are hopeful about agriculture’s ability to positively impact climate change. https://www.cargill.com/2021/new-study-finds-consumers-are-hopeful-about. Accessed 8 April 2023.
Cargill. 2022a. Aqua Nutrition. https://www.cargill.com/doc/1432218790944/2022-esg-sustainable-supply-chains-aqua-nutrition.pdf. Accessed 5 May 2023.
Cargill. 2022b. Innovafeed and Cargill extend their partnership to bring healthy novel ingredients to aquafarmers. 30 June.
Cargill. 2023a. Sustainable Aquaculture Feed & Ingredients. https://www.cargill.com/sustainability/aquaculture/aquaculture-feed-ingredients. Accessed 5 May 2023.
Cargill. 2023b. “Farm of the Future Demands Digital.” https://www.cargill.com/feedingintelligence/digital-insights-operations. Accessed 3 May 2023.
EWOS. 2021. Millennial Salmon: will develop sustainable ingredients for future farmed salmon. 23 August.
PR Newswire. Consumers expect to keep protein on their shopping lists as part of a healthy and sustainable diet, according to new survey. https://www.prnewswire.com/news-releases/consumers-expect-to-keep-protein-on-their-shopping-lists-as-part-of-a-healthy-and-sustainable-diet-according-to-new-survey-300835665.html. Accessed 30 March 2023.
Secondary sources
Amanor, K. 2019. Global value chains and agribusiness in Africa: Upgrading or capturing smallholder production? Agrarian South: Journal of Political Economy 8 (1–2): 30–63.
Bamber, P., and C. Staritz. 2016. The gender dimensions of global value chains. Geneva: International Center for Trade and Sustainable Development.
Best Aquaculture Practices. 2022. Auditor competency and course approval requirements. https://www.bapcertification.org/Downloadables/pdf/BAP%20-%20Auditor%20Competency%20and%20Course%20Approval%20Requirements%20-%20Issue%2011.4%20-%2013-June-2022.pdf. Accessed 7 June 2023.
Best Aquaculture Practices. 2023. Aquaculture facility certification. https://www.bapcertification.org/Downloadables/pdf/GSA%20-%20Farm%20Standard%20-%20Issue%203.1%20-%2007-February-2023.pdf. Accessed 7 June 2023.
Bhosale, S.V., M.P. Bhilave, and S.B. Nadaf. 2010. Formulation of fish feed using ingredients from plant sources. Research Journal of Agricultural Sciences 1 (3): 284–287.
Bresnahan, T. F. 1989. Empirical studies of industries with market power. In Handbook of Industrial Organization, 1011–1057. Oxford: Elsevier.
Broehl, W.G. 1992. Cargill: Trading the world’s grain. UPNE.
Broehl, W.G. 1998. Cargill: going global. UPNE.
Bruni, M., and F.M. Santucci. 2016. Agribusiness at global scale and smallholders. Bulgarian Journal of Agricultural Science 22 (1): 1–9.
Buchmann, K. 2022. Control of parasitic diseases in aquaculture. Parasitology 149 (14): 1985–1997.
Clapp, J. 2015. ABCD and beyond: From grain merchants to agricultural value chain managers. Canadian Food Studies, La Revue Canadienne Des Études Sur L’alimentation 2 (2): 126–135.
Cowgill, B and Prat, A and Valletti, T., Political Power and Market Power (March 16, 2023). CEPR Discussion Paper No. DP17178, Available at SSRN: https://ssrn.com/abstract=4390776 or https://doi.org/10.2139/ssrn.4390776. Accessed 20 August 2023.
Craig, S.R., Helfrich, L.A., Kuhn, D. and Schwarz, M.H., 2017. Understanding fish nutrition, feeds, and feeding. University of Virginia Cooperative Extension.
De Loecker, J., & Eeckhout, J. 2018. Global market power. National Bureau of Economic Research. Working Paper 24768. http://www.nber.org/papers/w24768. Accessed 21 August 2023
Demaree-Saddler, H. May 8th, 2017. Cargill expands aquafeed business in Vietnam. World Grain.com
Demaree-Saddler, H. October 24th 2018. Cargill Opens Feed Mill in Vietnam. World Grain.com
Drost, S., Mishra, K. and Piotrowski, P.M., 2019. Cargill’s new policies insufficient to fully mitigate deforestation risks in Brazil. Chain Reaction Research. https://chainreactionresearch.com/wp-content/uploads/2019/07/Cargill-Profile-Update-1.pdf. Accessed 21 August 2023.
El-Saadony, M.T., M. Alagawany, A.K. Patra, I. Kar, R. Tiwari, M.A. Dawood, K. Dhama, and H.M. Abdel-Latif. 2021. The functionality of probiotics in aquaculture: An overview. Fish & Shellfish Immunology 117: 36–52.
Evenson, R.E., and D. Gollin. 2003. Assessing the impact of the Green Revolution, 1960 to 2000. Science 300 (5620): 758–762.
FAO. 2022. The state of world fisheries and aquaculture 2022. Towards blue transformation. Rome: FAO. https://doi.org/10.4060/cc0461en.
Fine, Ben. 2019. Marx’s rent theory revisited? Landed property, nature and value. Economy and Society 48 (3): 450–461.
Forbes. 2002. Going against the grain. Forbes. 10 November
Fortune Business Highlights. 2023. Aquafeed market size, share, and COVID-19 impact analysis, by type, ingredient, form, and regional forecast. https://www.fortunebusinessinsights.com/industry-reports/aquafeed-market-100698. Accessed 10 May 2023.
Gereffi, G., J. Humphrey, and T. Sturgeon. 2005. The governance of global value chains. Review of International Political Economy 12 (1): 78–104.
Gorham, B. 2004. Chateau Cargill throws open its hallowed halls. Institute for Agriculture and Trade Policy. 25 February.
Gradin, S. 2016. Rethinking the notion of ‘value’ in global value chains analysis: A decolonial political economy perspective. Competition & Change 20 (5): 353–367.
Harvey, D. 1982 [2006]. Limits to Capital. Verso
Higginbottom, A. 2021. The imperialist multinational: concentration, fiction or rent? In Imperialism and transitions to socialism, ed. Rémy. Herrera, 39–57. Bingley N.Y., U.S.: Emerald Publishing Limited.
Holmyard, N. July 16th, 2018. Cargill Aqua Nutrition sustainable feed supply on the increase. Seafoodsource
Hopkins, T., and I. Wallerstein. 1977. Patterns of development of the modern world-system. Review (fernand Braudel Center). 1 (2): 111–145.
Islam, MD Saidul. 2008. From sea to shrimp processing factories in Bangladesh: Gender and employment at the bottom of a global commodity chain. Journal of South Asian Development 3 (2): 211–236.
Jordan, L, A., E. Howard, A. Heal, A. Wasley, P. Thomas and A. Milliken. November 25th, 2020. Cargill: the company feeding the world by helping destroy the planet. Greenpeace.
Kneen, Brewster. 1996 [2002]. Invisible giant: cargill and its transnational strategies. Pluto Press.
Kurohman, F., D. Wijayanto, and B. Jayanto. 2020. The strategy of capture fisheries development in Pamekasan Regency, Madura Island. Aquaculture, Aquarium, Conservation & Legislation-International Journal of the Bioflux Society 13 (5): 2816–2817.
Landes, W.M., and R.A. Posner. 1981. Market power in antitrust cases. Harvard Law Review 27: 937–996.
Lee, S., and A. Midani. 2017. The effect of the Korea-US free trade agreement of governance of the aquaculture value chain. Aquaculture Research 48 (7): 3755–3765.
McMichael, P. 2009. Banking on agriculture: A review of the World Development Report 2008. Journal of Agrarian Change 9 (2): 235–246.
McMichael, P. 2013. Value-chain agriculture and debt relations: Contradictory outcomes. Third World Quarterly 34 (4): 671–690.
Morgan, D. 1979. The shadowy world of grain trade. Washington Post. 10 June.
Morgan, D. 1980. Administration is facing grain embargo backlash. Washington Post. 6 April.
Onat, N., and M. Kucukvar. 2020. Carbon footprint of construction industry: A global review and supply chain analysis. Renewable and Sustainable Energy Reviews (124).
Powell, J. 2004. Cargill delivers record performance. CropChoice.com. 13 August.
Proterra Foundation. 2019. ProTerra standard social responsibility and environmental sustainability. 15 September. https://www.proterrafoundation.org/wp-content/uploads/2020/10/ProTerra-Standard-V4.1_EN-2.pdf. Accessed 4 May 2023
Reuters. 2015. Cargill buys Norwegian salmon feed maker EWOS for $1.5 Billion. 17 August.
Salerno, T. 2017. Cargill’s corporate growth in times of crises: How agro-commodity traders are increasing profits in the midst of volatility. Agriculture and Human Values 34: 211–222.
Schafer, L. 2020. Minnesota may never see another business leader like Whitney MacMillan. Star Tribune. 14 March.
Sojamo, S., and E. Larson. 2012. Investigating food and agribusiness corporations as global water security, management and governance agents: The case of Nestlé, Bunge and Cargill.". Water Alternatives 5 (3): 619–335.
Trejo-Pech, C.O., L. House, and C. López-Reyna. 2003. Cargill hybrid seeds Mexico: A case study. International Food and Agribusiness Management Review 5 (3): 1–23.
Trujillo-Barrera, A., M. Mallory, and P. Garcia. 2012. Volatility spillovers in US crude oil, ethanol, and corn futures markets. Journal of Agricultural and Resource Economics 37 (2): 247–262.
Wallerstein, I. 2004. World-systems analysis: An introduction, 2004. Durham: Duke University Press.
Yogev, U., A. Barnes, I. Giladi, and A. Gross. 2020. Potential environmental impact resulting from biased fish sampling in intensive aquaculture operations. Science of the Total Environment 707 (2020): 1–6.
Acknowledgements
I would like to thank the anonymous reviewers for their comments that helped improve this article’s argument.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Pahnke, A. From rent-seeking to rent-producing: explaining Cargill’s strategy to control value chains by proliferating links within them. Agric Hum Values (2023). https://doi.org/10.1007/s10460-023-10514-7
Accepted:
Published:
DOI: https://doi.org/10.1007/s10460-023-10514-7