Every year the International Development Studies Department at Trent hosts a lecture from a notable academic in the field of International Development. This endowed lecture series is funded by former Trent Faculty Dr. David Morrison and Dr. Alena Heitlinger who taught in the International Development and Sociology departments respectively. Morrison, after whom the lecture series is named, was the founding Chair of the Comparative Development Studies Department which evolved into the International Development Studies Department.
On October 3, the annual David Morrison lecture took place at Market Hall from 7:30 to 9 p.m. This year’s lecture was delivered by Dr. Jennifer Clapp on the topic of “Power, Politics, and Justice in the World Food Economy.”
Dr. Clapp is the Canada Research Chair in Global Food Security and Sustainability at the University of Waterloo. She is one of the world’s foremost authorities on food but her career has focused on a variety of topics surrounding structural adjustment, environmental issues, and the global food system. Trent students were interested to find out that Clapp used to teach at Trent and is one of the founding members of the Seasoned Spoon.
Dr. Clapp began the talk with an introduction surrounding the ways in which “growing corporate power and control over the food system threatens the lives and livelihoods of small-scale agricultural producers, most of whom live in the developing world.” She noted that 2.5 billion of these small-scale producers provide over 70% of the world’s food.
While activists have made strides in movements towards food sovereignty and relocalization, corporate control in the food system has worsened as power consolidates in a shrinking number of mega-companies as companies continue to merge.
She went on to lay out the structure of her lecture, noting that it will focus on three key questions: What is the state of corporate power in the world food economy today? How are mega-companies reshaping food systems? What are the implication for efforts to promote food justice and sustainability?
In answering the first question, Clapp demonstrated the frequency and magnitude of recent mergers of massive companies in the agri-food sector, noting that 2018 has already been a record-setting year in terms of merger and acquisition deals. The implications of this trend is that a huge proportion of the world’s seeds and chemicals are controlled by very few companies. It is important to note that these mergers have been taking place across all the sectors that comprise the agri-food industry — from the input sector to the retailing sector.
Clapp went on to explain that corporate power is not only being consolidated through mergers, but also through the growing trend of institutional investment, particularly by asset management companies (companies who pool their investors’ money together to invest on their behalf). Dr. Clapp delineated that it is through this growing trend that much of the mega-companies that comprise each sector of the agri-food industry have come to be owned by the same companies—a concept referred to as “common ownership.”
Dr. Clapp notes that this trend is not unique to the agri-food industry, but also extends to other sectors across the economy: “80% of firms in the S&P 500 [index] have these same owners [asset management companies].” These companies manage trillions of dollars and have been growing steadily since the economic crash of 2008.
This trend is deeply concerning as the number of food companies decreases while the number of companies who owns them also decreases, concentrating power in the hands of “interlocking oligopolies.”
“Most economic theory of the firm is based on the idea that each firm has different sets of investors and that each investor’s interest is that their firm performs better than the other firms—that’s how competition works,” she explained. “But if you have a situation where each firm in the sector that are supposedly competing against each other share the same owners, what kind of incentives are created and how does this affect the food system?”
In the second part of the lecture, Dr. Jennifer Clapp answered just that.
She points to literature surrounding the trend of common ownership and asset management companies to explain how anti-competitive mega-companies have come to rise. These companies fundamentally undermine the notion of competition that our market was built upon. They do this through refraining from price competition (rising prices), not investing in innovation, creating barriers to entry for smaller firms and fostering inequality as profits go to shareholders rather than employees. Following mergers, companies often lay off workers citing ‘efficiency’ resulting in increased precarity. As a consequence of common ownership, companies are focused on the success of the sector itself, taking action to support industry at the expense of everyday consumers.
In the context of the agri-food industry, this trend is especially troubling insofar as it undermines our environment. Companies are focussed on shareholder profit, making their outlook one that is focused on the short-term, an ambition that is antithetical to sustainability.
Dr. Clapp also noted that what is particularly interesting about this trend is that it unites both the political left and right in opposition: “[The right] are upset about because it dampens competition and it’s just downright inefficient. The left hates it because it increases inequality which they see as unjust.”
In the third and final part of the lecture, Dr. Jennifer Clapp tackled the question of what all this means for efforts to promote food justice and sustainability. She argues that we need to recognize how increasing corporate power in this sector creates challenges for localized approaches to sustainability insofar as the industry presents itself as a monolithic industrial model.
“While focussing on the local is a laudable goal, I would argue that it is not enough because it’s being squashed by the rise of mega-companies,” Dr. Clapp argued. “We need to think about the 2.5 billion small-scale farmers in the Global South. The industrial agricultural model being promoted by the mega-companies is being pushed on the developing world with ever stronger rigour.”
These small-scale farmers are under threat by corporate and political power as they are being overpowered by cheap industrial food from the West, facing land dispossession by powerful agricultural companies, and swept into becoming precarious workers in the sector. It is for these reasons that Dr. Clapp argues that focusing on the local is not enough; we have a moral obligations to the farmers of the developing world who produce the majority of the world’s food.
Despite a bleak snapshot of our global food system, Dr. Jennifer Clapp remains optimistic that change can be achieved; however, she makes clear that it needs to come from above (through policy changes) and below (through relocalization) in order to actualize any real change and ensure equality, justice and environmental sustainability.