Trading on Pork and Beans: Agribusiness and the Construction of the Brazil-China-Soy-Pork Commodity Complex
As “food crises” appear to increase in both frequency and severity around the world, renewed attention is focused on the political economy of the global food system. Specifically, the emerging production and consumption powerhouses of Latin America and China are drawing attention to the reconfiguration of trade flows and the role of powerful multinational agribusinesses in that process. This chapter examines the emergence of the Brazil-China-soy-pork commodity complex as a lens on global agro-food restructuring. As China has shifted pork production to an intensified, industrial model, its demand for imported soy to feed hogs has skyrocketed. Brazil has largely stepped in to meet that demand, which has led to the integration of the Chinese pork sector and the Brazilian soy sector in a highly interdependent commodity complex. The emergence of this commodity complex signals a shift away from the traditional production and consumption centers of soy (the US and EU/Japan, respectively) towards new South-South trade flows. What has remained the same—at least to this point—is the control exercised over that commodity complex by the four primary transnational soybean brokers and processers: Archer Daniels Midland, Bunge, Cargill, and Louis-Dreyfus. The level of control wielded by these four companies is not without challenges from farmers, governments, and NGOs in both China and Brazil. However, because of the structure of the industry and the extent of their reach down the supply chain, these firms maintain significant influence over the governance of this global commodity complex. This chapter addresses the structuring of the global soy market through the interaction of policy and the private sector in Brazil and China, and concludes with a discussion of the consequences of this new commodity system for food, farmers, and the environment.
KeywordsSupply Chain Foreign Investment Foreign Ownership Transnational Corporation Domestic Enterprise
The author would like to thank Mindi Schneider for her help researching this chapter. Without her expertise in the politics of the Chinese pork industry, her generous collaboration, and her hospitality in Chengdu, China, this chapter would never have been possible. This research was conducted with support from the Trimble Foundation at the University of Puget Sound.
- Aprosoja. 2010. Outlook for internal and port infrastructure growth in Brazil. Cuiaba: Mato Grosso Soybean and Corn Growers Association (Aprosoja).Google Scholar
- Arce, L. 2009. Brazil, China deals challenge US position in Latin America. World Socialist Web Site. http://www.wsws.org/articles/2009/jun2009/braz-j06.shtml. Accessed 1 July 2011.
- Barrionuevo, A. 2011. China’s interest in farmland makes Brazil uneasy. The New York Times, May 27, A1.Google Scholar
- Bello, W. 2009. The food wars. London: Verso Press.Google Scholar
- China Business News. 2007. Bunge enters china vegetable oil retail market. China Business News, January 5.Google Scholar
- Eriksen, P., P. Thornton, A. Notenbaert, L. Cramer, P. Jones, and M. Herrero. 2011. Mapping hotspots of climate change and food insecurity in the global south. CCAFS Report No. 5. Washington, DC: Consultative Group on International Agricultural Research.Google Scholar
- Fearnside, P.M. 2001. Soybean cultivation as a threat to the environment in Brazil. Environmental Conservation 28: 23–38.Google Scholar
- Gale, F. 2007. A tale of two commodities: China’s trade in corn and soybeans. International agricultural trade consortium meeting, Beijing.Google Scholar
- Gallagher, K., and R. Porzecanski. 2010. The dragon in the room: China and the future of Latin American industrialization. Stanford: Stanford University Press.Google Scholar
- Gao, S. 2010. Discussion on issues of food security based on basic domestic self-sufficiency. Asian Social Science 6(11): 42–46.Google Scholar
- GRAIN. 2008. Seized! the 2008 land grab for food and financial security. Barcelona: GRAIN.Google Scholar
- Greenpeace. 2006. Eating up the Amazon. http://www.greenpeace.org/international/en/publications/reports/eating-up-the-amazon/. Accessed 7 Mar 2009.
- Halper, S. 2010. Beijing’s coalition of the willing. Foreign Policy 180: 100–102.Google Scholar
- Hasse, H. 1996. O brasil da soja: Abrindo fronteiras, semeando cidades. Porto Alegre: Ceval Alimentos/L & PM Editores S.A.Google Scholar
- Howie, M. 2005. Bunge expands into China. Feedstuffs 77(30), July 25, 7.Google Scholar
- INAI. 2008. The China soybean industry policy. Buenos Aires: Instituto para las Negociaciones Agrícolas Internacionales.Google Scholar
- Jilberto, A.E.F., and B. Hogenboom. 2010. Latin America facing China: South-south relations beyond the Washington consensus. New York: Berghahn Books.Google Scholar
- Lan, L. 2010. Battle of the beans. China Daily, August 23. http://www.chinadaily.com.cn/business/2010-08/23/content_11189082.htm. Accessed 2 May 2011.
- Masuda, T., and P.D. Goldsmith. 2009. World soybean production: Area harvested, yield, and long-term projections. International Food and Agribusiness Management Review 12(4): 143–162.Google Scholar
- McMichael, P. 2009c. The world food crisis in historical perspective. Monthly Review 61(3): 32–47.Google Scholar
- Menegheti, G. 2005. E agora, valcir? Produtor Rural 149: 245–313.Google Scholar
- Merco Press. 2006. China, Brazil, and Argentina seeking soy axis. Merco Press, April 17. http://en.mercopress.com/2006/04/17/china-brazil-and-argentina-seeking-soy-axis. Accessed 10 June 2011.
- Merco Press. 2011. China plans to invest 10 billion USD in soy production and processing in Brazil. Merco Press, June 1. http://en.mercopress.com/2011/04/11/china-plans-to-invest-10-billion-usd-in-soy-production-and-processing-in-brazil. Accessed 10 June 2011.
- Moore, M. 2009. China overtakes the US as Brazil’s largest trading partner. The Telegraph, May 9. http://www.telegraph.co.uk/finance/economics/5296515/China-overtakes-the-US-as-Brazils-largest-trading-partner.html. Accessed 15 June 2011.
- Morton, D.C., R.S. DeFries, Y.E. Shimabukuro, L.O. Anderson, E. Arai, F.D.B. Espirito-Santo, R. Freitas, and J. Morisette. 2006. Cropland expansion changes deforestation dynamics in the southern Brazilian Amazon. Proceedings of the National Academy of Sciences 103(39): 14637–14641.CrossRefGoogle Scholar
- Nepstad, D.C., C.M. Stickler, B. Soares-Filho, and F. Merry. 2008. Interactions among Amazon land use, forests and climate: Prospects for a near-term forest tipping point. Philosophical Transactions of the Royal Society. doi: 10.1098/rstb.2007.0036.
- Niu, S. 2008. China seeks to calm anger over soy imports. Reuters, December 11. http://www.reuters.com/article/2008/12/11/china-farmers-soy-idUSPEK8218720081211. Accessed 2 May 2011.
- Peine, E. 2009. The private state of agribusiness: Brazilian soy on the frontier of a new food regime (Unpublished Ph.D.). Ithaca: Department of Development Sociology, Cornell University.Google Scholar
- Petry, M., and J. O’Rear. 2008. China, Peoples Republic of agricultural situation new oilseed industrial policy 2008. No. CH8084. Washington, DC: Foreign Agricultural Service, USDA.Google Scholar
- Provance, P. 2003. China: Soy producers face shifting internal policies and world markets. Washington, DC: Production Estimates and Crop Assessment Division, Foreign Agricultural Service, USDA.Google Scholar
- Ramo, J.C. 2004. Beijing consensus: Notes on the new physics of Chinese power. London: Foreign Policy Center.Google Scholar
- Rosenthal, E. 2009. In Brazil, paying farmers to let the trees stand. The New York Times, August 22. http://www.nytimes.com/2009/08/22/science/earth/22degrees.html?pagewanted=all. Accessed 30 Oct 2010.
- Schneider, M. 2011. Feeding China’s pigs: Implications for the environment, China’s smallholder farmers and food security. Minneapolis: Institute for Agriculture and Trade Policy.Google Scholar
- State Development and Reform Commission. 2007. Catalog for the guidance of foreign investment industries (Amended 2007). http://www.fdi.gov.cn/pub/FDI_EN/Laws/law_en_info.jsp?docid=87372. Accessed 3 June 2010.
- Tepfer, D. 2010. China Chongqing Grain Group plans to produce soy in Brazil—report. AE Brazil Newswire, April 22. http://www.accessmylibrary.com/article-1G1-224690585/china-chongqing-grain-group.html. Accessed 17 Jan 2012.
- Tuan, F.C., C. Fang, and Z. Cao. 2004. China’s soybean imports expected to grow despite short-term disruptions. No. OCS-04J-01. Washington, DC: Economic Research Service, USDA.Google Scholar
- UNCTAD. 2009. World investment report 2009: Transnational corporations, agricultural production and development. Geneva: United Nations Conference on Trade and Development.Google Scholar
- US Department of Agriculture (USDA) Foreign Agricultural Service (FAS). 2011. Production, supply and distribution online. http://www.fas.usda.gov/psdonline/. Accessed 2 June 2011.
- Warnken, P.F. 1999. The development and growth of the soybean industry in Brazil. Ames: Iowa State University Press.Google Scholar
- Weis, T. 2007. The global food economy: The battle for the future of farming. London: Zed Books.Google Scholar
- Wilkinson, J. 2009. The globalization of agribusiness and developing world food systems. The Monthly Review 61(4): 38–50, September.Google Scholar
- Xiang, L. 2009. No end to soybean wars. China Business Weekly, April 20. http://www.chinadaily.com.cn/business/2009-04/20/content_7693989.htm. Accessed 10 June 2011.
- Xiaokun, L., A. Yang, and B. Chang. 2011. China vows new Brazil trade ties. China Daily, April 13. http://www.chinadaily.com.cn/bizchina/2011-04/13/content_12316309.htm. Accessed 2 May 2011.
- Yan, Q. 2007. The influence of trade policy changes on China’s soybean market. IATRC symposium, July 8–9. Beijing: International Agricultural Trade Research Consortium.Google Scholar
- Zancope, G., and J.M. Nasser. 2005. O brasil que deu certo: A saga da soja brasileira. Curitiba: Tríade.Google Scholar