During its formative years, Marxist Leninist practice played out in and around the cities of the global North. Employed property-less workers were pitted against factory and mine owners, railroad moguls, and government repression.

Demands of aggrieved small farmers for land, while crucial to the victories of the Russian and Chinese revolutions, never informed much of the revolutionary ideology handed down over the years to U.S. and European socialists.

As so-called “scientific” socialists, however, they can be called upon to study new realities. Indeed, novel forms of
exploitation have appeared on the horizon. They involve extraction of surplus value from endeavors no longer confined
to cheating on the labor of individuals or groups of people.

Now the whole of humanity is targeted. The rich and powerful have a dangerous take on climate change, environmental integrity, food, and land. The field of battle moves to encompass under-populated, rural areas of the world. It moves beyond the factory floor, the work crew, and city streets. 

Looming catastrophes on these fronts are inter-related. Capitalists increasingly worried about their survival want to control land and profit from producing and selling food.

The article by Vicent Boix, appearing below in translation, focuses on monopolists’ takeover of food production and distribution. It ends teasingly with passing reference to their lust for land itself.

The reader is thus invited to explore the phenomenon of “land grab,” the phenomenon by which rich nations, agro-business corporations, financial companies, and private individuals buy up or arrange for long term lease arrangements of huge tracts of land in the global South. In February 2012 the GRAIN organization documented foreign takeover of 87 million acres of land in 66 countries occurring after 2006.   Investors aim to profit from the production of food and/or bio-fuels.

Boix’ report is useful for the insight it provides as to new directions minders of the status quo – corporate officials and imperialist enforcement agencies – are taking to protect their interests.  Developments in Latin America show how questions of land and food production have shaped recent political history there.

Paraguay, for instance, is the world’s fourth largest producer of soy, most of it destined for Europe for biodiesel use. A coup there in June, 2012 removed the Fernando Lugo government. Lugo’s successful presidential campaign in 2008 was based on advocacy for agrarian reform.  He left office in the wake of a murderous police assault on land reform activists. At the time of his election, Paraguay’s land inequality – 2 percent of the population controlled over 77 percent of the fertile land – was the highest in Latin America.

A U.S.-tolerated military coup in Honduras removed land-reforming President Mel Zelaya in 2009. Since then, industrial-scale agriculture has expanded aggressively, particularly in the Baja Aguan region. There, coup plotter Miguel Facussé Barjum and land-owner counterparts process African palm oil for bio-fuel use. That entails violent repression of land-hungry small farmers.

Decades – long turmoil in Colombia stems fundamentally from a pervasive city –rural divide based on social class. It results too from the staying power of FARC leftist guerrillas dedicated to agrarian reform. That’s the first item on the agenda for FARC and Colombian government negotiators presently at work in Cuba.

In Colombia, 0.4 per cent of landowners own 61 per cent of rural land, rural poverty exceeds 60 percent, almost five million small farmers have been displaced from their land, and as of 2010 subsoil rights to over 40 percent of Colombia’s territory have been awarded to or solicited by mining and oil corporations.

The message here is that anyone allied to the cause of socialist revolution ought to attend to conflicts over land, food production, and food distribution. Vicent Boix describes a pressing new mode of class-based exploitation planned in corporate chambers, implemented in the countryside, and disastrous for planet-wide food security.

Producing and processing food is big business

By Vicent Boix, CEPRID
The agriculture-food processing chain is a big, juicy-rich business. That’s evident in the balance sheets of certain trans–national corporations, and clear too from analyses of massive insertion of finance capital in the raw materials market. Rising food prices and price volatility, which came about artificially in the markets, have been normalized, institutionalized, and accepted without protest. Groups like the United Nations Organization for Food and Agriculture (FAO) announced that humanity will be confronting an epoch of expensive food, even though this presupposes a status quo in which millions of people go hungry. This is taken at face value.

Traditionally, small farmers, taken as a class, characteristically grow food for their own consumption and for local markets. They practice a type of agriculture respectful of the environment, one cemented in agricultural knowledge handed down from generation to generation. In many places, peasants or small farmers gradually opened themselves up to the market. Their objective, rather than grow crops in order to eat, was to do so in order to sell what was sown and be able to buy food and other necessities.

What’s designated as the “green revolution” that happened in the middle of the 20th century favored this process by promoting increased productivity. That was due to mechanization of field work and utilization of improved seeds and chemical products. The once independent farmer became dependent on “technology packages” and market requirements.

Initially many small farmers were able to survive and even make progress. With the spread of neo-liberal policies, however, traditional small farmer agriculture entered into an obvious recession. According to FAO data, 52 percent of the world’ economically active people were involved in farming between the years 1979 and 1981, a figure that had fallen to 40 percent by 2010. By the same token, the world’s rural population that in 1979-81 made up to 61 percent of all people dropped to 49 percent in 2010.[1]

During this same time period, by contrast, agricultural exports and imports increased fivefold. That shows how intensive, export agricultural is working to throw farmers off their fields.

And there’s one big problem facing agriculture of the agro-export type, understood as a trade category within the global supermarket: various phases of the agriculture – food processing chain (seeds, necessary supplies, the role of intermediaries, distribution, processing, sales) are over time being  concentrated in fewer and fewer hands. This situation strengthens those “hands” so they can shape all conditions for buying and selling.

According to the International Rural Advancement Foundation (re-named as the ETC Group) 67 percent of the world trade in seeds as of 2007 was in the hands of ten great multi-nationals (DuPont, Syngenta, Limagrain, Bayer, etc.) Monsanto was holding onto almost 25 percent. In the same vein, 10 companies control 89 percent of all trade in agro-chemicals (Bayer, Syngenta, Dow, Monsanto, etc.). The six most powerful of them are also involved in the seeds business. [2]

In 2008, the year when the first food crisis of this 21st century materialized, food processing companies achieved great revenue increases, according to Genetics Resources Action International (GRAIN): “…Nestle’s profits for 2008 rose an impressive 59 percent, and the increase for Unilever was around 38 percent.” [3] Prices for agro-chemicals also went up during these months. As a result, many farmers went without and yields of intensive plantings were down. In one year Monsanto increased its earnings by 120 percent; Bayer, 40 percent; Syngenta, 19%; and Dow, 63%.
These links in the food-production chain – agro-chemicals and seeds – are not the only ones associated with increased revenues. One that causes despair for millions of farmers is the link by which food is processed for super-market sales. The situation is similar to the ones just described: A few companies, both national and international, insert themselves between millions of farmers and food producers and millions of consumers. Many of these companies are food processors. According to ETC, 26 percent of packaged food products on the world market are processed by ten trans-nationals ((Nestle, Pepsico, Kraft, Coca-cola, Unilever, Danone, etc.).[4] As for non – processed fruits and vegetable, interchange is between wholesalers and retailers. In other instances, it’s the supermarket part of the modern distribution system that takes direct control of products from the farm or from the wholesaler.

Whichever of the three mentioned situations that applies, the middleman, the processor, or the supermarket, the main theme is that the dominant position in the food-production chain of any one of them has effects on prices that are laughable: low prices paid to farmers and inflated prices charged to consumers. The resulting increases in surplus value are often insulting.

In the 21st century, big investments in raw materials
Market deregulation in recent decades has made sure that productive investments in the real economy were losing ground to investments by financiers who encamped in various markets to suck out money from them and then escape the crisis thus created in search of new markets. Investments of finance capital, along with other items, were responsible for the “dot.com bubble” and the “subprime crisis.”  

In their search for sure-thing investments, finance capitalists settled into the futures markets where food and agricultural raw materials are very important; they also deal in petroleum and metals etc. We’ll cite the following hypothetical case: a farmers’ cooperative inquires into one of these markets, and after negotiations with a flour company, sells 30 tons of wheat for delivery in January 2014 at a price of $225 per ton. To do so, a “futures contract” would be signed, in other words, a document detailing the transaction. It’s important to underscore that one doesn’t deal with physical merchandise in the futures market, like wheat. Instead one contracts to buy or sell real goods in the future, wheat, for example, in January, 2014.

Speculation has always been a part of these markets along with other practices having little to do with real trade in raw materials. Contracts for future sales of merchandise allow considerable margin to account for price variations before the date of actual delivery.

To summarize: various liberalizing measures acting in concert with crises in other markets made it advantageous for finance capital (hedge funds, pensions, etc.) to move into large – scale investment opportunities in the futures markets. Active financing for trade in raw materials grew from $5 billion in 2000 to $450 billion in 2011 [5].  

Since then, there’s been tension in the world owing to increases in food prices that prompted a food crisis in 2008 and another in 2010 that seems endless; it’s causing ruin in the Horn of Africa and Africa’s Sahel. From the beginning, an attempt was made to hide the real origins of the crisis with the argument that disequilibrium in supply and demand of foods was responsible. 

Eventually with time, as facts came out, the reality became evident.  There’s a straight-line relationship between investor activity and prices going up. What’s real is that while in Sub-Saharan Africa people are dying of hunger, the investment firm Goldman Sachs took in more than $5 billion speculating in raw materials, which makes up a third of its net gains. [6]

Land is the last link to come under control
The agriculture – food processing chain is big business with tasty profits. That’s clear  from the balance sheets of certain trans-national corporations and from analyzing the dizzying intrusion of finance capital in the raw materials markets.

The future for investors is hopeful indeed.  They know people can stop paying their mortgages but also know they have to feed themselves. The announcement that humanity will be facing an era of expensive food was handed down from organizations like FAO. We are asked to accept this assumption on face value, although it presupposes acceptance of a status quo in which millions of people go hungry.

Even if there’s still no scarcity, the equation between supply and demand of food and food raw materials will tend to narrow if measures are not taken. That’s because the world population continues to grow exponentially and because the energy future of rich countries depends on agro-fuels.  Each plays out on a planet threatened by climate change that is compromising the water capacity of many nations, degrading soils, interfering with productivity, and affecting yields in several regional cultivation zones.

The essential idea is that in this time of economic crisis and recession, what’s happening is that agriculture is presented as an appetizing market with a promising future. Demand is more than assured, and beyond that, it will grow in dizzying fashion. The FAO itself has estimated that world food production will have to double by the year 2050.

Supply, by contrast, is the great scenario that divides. On that account, nations, investors, and trans-nationals are beginning to move their chess pieces to guarantee their portion. On the assumption that certain links of the export food production chain are already monopolized by multi-nationals – seeds, middle-man dealings etc. – and on the assumption too that investors and speculators are filling up the future markets, we say there’s only one link remaining to be won over: land.

This is an essential natural resource that even now, depending on which country, remains more or less accessible for citizens. The peasant and the small farmer can steer clear of proprietary seeds, agrochemicals, and traditional distribution channels, while the consumer can evade the reigning façade by buying healthy food and, in season, directly from the producer.

Land is all that is required to keep these sustainable, agro-ecological channels active. But land now is in the crosshairs of capital. What’s involved here is the greatest possible threat to food sovereignty.  That’s especially so in poverty-stricken nations and communities that used to feed themselves on their own. They consumed what they had grown or what was available from local markets.

1. Annual FAO statistics 2004 and 2010.
2. ETC: “¿De quién es la naturaleza?”, November, 2008.
3. GRAIN: “Las corporaciones siguen especulando con el hambre”, April, 2009.
4. ETC: “¿De quién es la naturaleza?”, November, 2008.
5. GRAIN: “El negocio de matar de hambre”, 28 de abril de 2008 y LA CAIXA: “Especulación en los mercados de materias primas: ¿culpable o inocente?”, Monthly Report, October 2011.
6. KNAUP, H., SCHIESSL y M., SEITH Y.A.: “El hambre cotiza en bolsa”, El País, Madrid, Spain, September 4, 2011.
7. LA CAIXA: “Especulación en los mercados de materias primas: ¿culpable o inocente?”, Monthly Report, Number 350, October, 2011

Vicent Boix is a researcher associated with the academic department known as the “Citizen Land – Charles Léopold Mayer Foundation,” at Valencia (Spain) Polytechnic Institute. Tom Whitney translated.

Source: http://www.nodo50.org/ceprid/spip.php?article1558

CEPRID is El Centro de Estudios Políticos para las Relaciones Internacionales y el Desarrollo [The Center for Political Studies on International Relations and Development]


December 12, 2012