Abstract
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.
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For a more detailed analysis of this geographic and political-economic shift, see Wilkinson (2009).
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In national markets other important players command substantial market share, like Groupo Maggi in Mato Grosso, Brazil and many state-owned agribusiness in China. However, these companies have generally not expanded their business transnationally, and so therefore do not compete in the global commodity chain in the same way.
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Ironically, US farmers have been moving to Brazil to grow corn and soybeans for decades, purchasing land without provoking any reaction from the state.
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The term “Washington Consensus” refers to the set of policies prescribed by the International Monetary Fund and the World Bank to encourage development and help countries of the global South “grow” themselves out of debt in the 1980s. These policies followed the principles of neoliberalism (privatization, small government, trade liberalization, producing for export, etc.) and were institutionalized in the structural adjustment programs that indebted countries were forced to accept as conditions of IMF loans.
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The directive stipulates that if a single firm’s soybean oil production reaches 15% of the national total, that firm shall be prohibited from further expanding capacity.
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An international conference in 2011 sponsored by the Land Deals Politics Initiative in collaboration with the Journal of Peasant Studies and hosted by the Future Agricultures Consortium at the University of Sussex included 89 academic papers analyzing the wave of global land grabbing. Full conference proceedings can be found at http://www.future-agricultures.org/index.php?option=com_content&view=category&layout=blog&id=1547&Itemid=978.
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Acknowledgement
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.
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Peine, E.K. (2013). Trading on Pork and Beans: Agribusiness and the Construction of the Brazil-China-Soy-Pork Commodity Complex. In: James, Jr., H. (eds) The Ethics and Economics of Agrifood Competition. The International Library of Environmental, Agricultural and Food Ethics, vol 20. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-6274-9_10
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