Inequality: A Glimpse In The Food Market
By Farooque Chowdhury
23 November, 2014
Countercurrents.org
The world food market with its amazing supermarkets, alluring discounters, magnificent hypermarkets, convenience stores, small food stalls, neutraceuticals that mix nutrients and medicine, monstrous agribusinesses, small-scale farms and cooperatives, whole sellers, retailers, hoarders, black marketers, speculators, big “organic” food business, future markets spreading over the entire world bears all the ills capital produces. The market conceives all the contradictions capitalism is capable of creating. Inequality is a part of it.
Market, it should be mentioned, with all its tentacles stands opposed to democracy. Food market is no exception. “[T]he guiding principles of the market economy and democracy” … “often contradict one another and are more likely to go head-to-head than hand in hand”, says Jacques Attali, a world famous banker and diplomat, in his “The Crash of Western Civilization: The Limits of the Market and Democracy”. (Foreign Policy, Number 107, Summer 1997) Attali writes: “[T]he market economy and democracy … are more likely to undermine than support one another. … The market economy accepts and fosters strong inequalities between economic agents, whereas democracy is based on the equal rights of all citizens. By depriving some people of the ability to meet their basic economic needs, the market economy also leaves them less able to exercise their full political rights.” (ibid.)
However, democracy is an integral part of struggle against inequality. The autocracy of market ruins people’s lives as market is one of the domains of capital, which is always active for maximization of profit. The global food market doesn’t go beyond this.
Consumers, billions in number, are there at the one end of the world food market while the other end touches the environment and ecology, the producers of raw materials, the labor-power that produces commodities for the market. Over the arch, sits political arrangement for safeguarding the interests with its power of legislation and execution. In the entire kingdom, from one end to the other, people pay high prices as deceived producers fallen prey to the power of market, as victims of demolished environment and pilfered ecology, as labor whose labor-power is being appropriated, as poor consumers deceitfully connected to commodities sold in the market, as people’s brains are manipulated with a vast propaganda machine.
Inequality increases in the reality as a class owns the temple, the entire food market, while billions of people languish under the Lord’s Table, the profit. Activities of related capital are an area to find the “game” of inequality that starkly show limitless power and domains, and, at the same time, limits of the interests that dominate the area: it can harm limitlessly, but it can’t deliver wellbeing to the people. It also shows limits imposed on people that hinder their access to better food.
Capital creates opportunities to increase profit. Obesity, as example, is such a case of opportunity. “Drug companies had attempted to capitalise on obesity, but their fingers got burnt. Still, there was a winner: the food industry. By creating diet lines for the larger market of the slightly overweight, not just the clinically obese, it had hit on an apparently limitless pot of gold.” (Jacques Peretti, “Fat profits: how the food industry cashed in on obesity”, The Guardian, August 7, 2013) Ordinary persons can’t access the “pot of gold”.
Big food companies armed with elusive marketing mechanism are selling candies, cereals, chocolate milk, infant formula, yogurts, etc. that reach all corners of the world. “Many unhealthy products are very profitable. … Many firms … [are] continuing to hawk unhealthy products yet also touting elaborate plans to improve nutrition.” (The Economist, “Food companies play an ambivalent part in the fight against flab”, December 15, 2012)
To increase profit, the food market compels consumers to pay more, and consumers are made loyal to brands. And, it’s the commoners that is allured and compelled to consume tasty but unhealthy food. The profit fattens the owning class while the commoners pay, and the inequality-story survives. Products with health claims are being introduced by the power of big money advertisement: chewing gum with vitamins B6 and B12, whole grains and protein filled cereals, etc. (Jeffrey Cohen, “Food Industries’ Healthy Margins”, May 23, 2013, IBIDWorld, Media Center) Ordinary consumers, masses of people, buy, and they pay, and the inequality increases with draining out of their money, with their hurt health.
“Over the past decade sales of packaged foods around the world have jumped by 92%, to $2.2 trillion this year … In Brazil, China and Russia sales are three to four times their level in 2002. … Sales of soft drinks across the world have more than doubled in the past decade, to $532 billion; in India, Brazil and China sales of fizzy drinks have more than quadrupled.” (The Economist, op. cit.)
“These impressive sales figures look set to rise further” with new buying of companies, new products for local markets, competition for domination of the global market, investment in emerging markets, and wider spread into developing markets. “McDonald’s is now in 119 countries. Yum! Brands, owner of KFC, Taco Bell and Pizza Hut, derives 60% of its profit from the developing world, and there is plenty of growth potential left. Yum!’s chief executive, David Novak, explains that the company has 58 restaurants for every 1m Americans, compared with just two restaurants for every 1m people in emerging markets.” (ibid.) Sarah Murray, Financial Times contributor and author of Moveable Feasts: From Ancient Rome to the 21st Century, the Incredible Journeys of the Food We Eat informs: “[B]ig retailers such as Wal-Mart and Carrefour have been building more supermarkets around the world.” (“The World’s Biggest Industry”, Forbes, November 15, 2007) Citing FAO Sarah Murray writes: “Between 1980 and 2001, the five largest global supermarket chains (all of them based in Europe or the US) each expanded the number of countries in which they operate by at least 270%”. (ibid.)
A look at the impressive geographic expansion of the market tells its lucrative nature. Ordinary consumers form most of the market, labor provides the surplus value, and people languish in hunger. The face of inequality turns “bright”.
Sales of fast-food are increasing although the food is not helpful for health. Market, claimed as free, is manipulated – deregulated or kept under control or segmented – by mongers of free market as part of competition. Roberto De Vogli, Anne Kouvonen & David Gimeno looked into fast-food sales in 25 high-income countries from 1999 to 2008. Per-capita purchases increased in all these countries during the period. (“The influence of market deregulation on fast food consumption and body mass index: a cross-national time series analysis”, Bull World Health Organ, 2014; 92:99 – 107A)
With connections, the food market is wide as the world, and the market has wide connections – from government to legislative assemblies, from small producers to big hoarders, from media managers to uninformed consumers, and many others – that apparently appear contradictory but, is fully in accordance with the character of capital.
“Global food retail sales are about $4 trillion annually … Most of the leading global retailers are US and European firms …. The top 15 global supermarket companies account for more than 30 percent of world supermarket sales. …Together, the top 50 food manufacturers’ share of global packaged food retail sales account for less than 20 percent.” (US Department of Agriculture, Global Food Industry, last updated: May 31, 2012)
At the end of 2012, the global food market was valued at US$4.2 trillion, of which fresh food and agricultural produce accounted for 52.6% and packaged foods had the rest. During the five-year period leading up to 2012, the food sector expanded at a compound annual growth rate of 3.7% (by value), from US$3.7 trillion. The global market is expected to record a compound annual growth rate of 4.4% between 2012 and 2017, and will reach US$5.3 trillion by the end of this period. (Pegasus Agritech)
In 2013, the US fast food industry generated approximately US$191 billion. More than three and a half million workers were employed with over 232 thousand fast food establishments in the US in 2013. With a brand value of almost US$86 billion, McDonald’s was by far the most valuable fast food brand in the world in 2014. Its closest competitor was Starbucks with US$60 billion. In 2013, McDonald’s was also the largest fast food company in terms of revenue. It was followed by sandwich chain Subway and Yum! Brands. (Statista, “Statistics and facts about the Fast Food Industry”)
A market difficult to grasp
Despite huge data the worldwide food market is difficult to grasp. It’s simply difficult to take an account in monetary term. By using the example of a noodle stall Sarah Murray presented the difficulty in the following way:
“The noodle stall is one of the reasons analysts get jumpy when asked to quantify the size of the global food industry.… Like the peas on your plate, financial figures for food are notoriously hard to capture.” (op. cit.)
In the market, there is any food, packaged food, food made in homes, and food sold in street shops, many of which go beyond account. There is food not sold in shops but the poor scavenge in urban centers/collect in rural areas in their fight against hunger. There is the task of defining processed food, packaged food, etc.
“Euromonitor International”, Sarah Murray writes in the article mentioned above, “reckons the packaged food industry – including everything from pasta and cooking oil to canned and frozen foods – is worth almost $1.6 trillion. Meanwhile, the World Bank puts the food and agriculture sector at 10% of global gross domestic product, which, taking the bank’s 2006 estimate of about $48 trillion, would make the sector worth about $4.8 trillion.”
It’s admitted: “Food … is a confusing commodity, and our noodle seller’s soup illustrates why. His wontons are made from shrimp, part of the global seafood market, which the Food and Agriculture Organization (FAO) says is worth more than $400 billion. That’s simple enough. But the shrimp are covered in a wrapper whose primary ingredient is flour, which could be measured as a commodity or in its milled form. And is the dish they are in soup or noodles? Euromonitor says the market for soup is worth $12.9 billion, and the market for noodles, measured separately, worth $27.2 billion. The trouble is, food is a commodity, an ingredient, and a meal, and its value can be measured at every stage along that chain. ‘If you look at it as the output from the farm sector, it’s sold and processed, and sold again,’ says Mark Gehlhar, a senior economist at the US Department of Agriculture. ‘Then you have flour being produced and dough being produced. So you can easily double count.’ Of course, you could also lump our noodle soup seller’s business in with the restaurant trade. Euromonitor puts the global consumer food-service business – everything from cafés and fast-food chains to full-service restaurants – at $1.85 trillion. But with many restaurants operating on a cash basis, even in the US, the true value of this industry is hard to pin down. In fact, a huge amount of food is bought and sold informally. ‘When you talk about the food industry, the first thing people think of is Coca-Cola or Starbucks,’ says Florence Egal, a nutrition specialist at the FAO. ‘But of course, women’s groups in Mexico transforming maize into tortillas and sending them from house to house would also be part of the food industry.’ Despite these difficulties in measuring the absolute size of the food business, nearly everyone agrees: The sector is growing at an astonishing pace.’” (Sarah Murray, op. cit.) Intricacies, manipulations and informal type of market activities in the periphery, and unreliable data there also make the market difficult to comprehend. These have relations and implications that impact consumers. These are factors impacting inequality.
Global Pet Food Market
There is another global food market many of the poor and self-contained middle class are unaware of: the pet food market with billions of dollars. A comparison between the global pet food market and the food market the world poor fall victim to help comprehend the inequality the poor are imposed with.
The global pet food market was worth US$58.6 billion in 2011. It’s expected to reach the value of US$74.8 billion in 2017. It’s expected that North America will remain the largest regional segment for the pet food industry in terms of revenue generation, accounting for around 40% of the total revenue. The North America pet food market valued at US$21.7 billion in 2011 was followed by the Europe market. (Transparency Market Research, “Pet Food Market – Global Industry Size, Market Share, Trends, Analysis and Forecast, 2011 – 2017”, April 15, 2013)
It’s, in one sense, indecent, unjust and crude to make a comparison between pet food market and human food market as human is not equivalent to pet. But the global capital compels to resort to such a comparison as capital compares everything in market, and as capital has degraded human existence below all characteristics of humane, and, as, in real terms, human has been made a commodity sold in the global labor market. To the rich, human is less valuable than the pet of the rich. The rich love their pets, but there’s is only brutality the rich keep accumulated for the poor. An enquiry at some peripheral society will find the level of brutality: the amount of money a peripheral rich, a lumpen rich in a peripheral society, spends daily for a pair of pet’s food is much higher than 5 poor living in peripheral slums or villages, slums or villages in the periphery of the world system. Sometimes, the amount of money allotted for a pair of pets reaches to Taka 500-700 daily. Even, the poor are not aware of this “love” as a lot of information essential to them doesn’t reach them.
Poor doesn’t own drone
Inequality in food and health doesn’t come to sight with its full “bloom” if food market is not divided into the food market of the poor and the food market of the rich. There are two food markets: one for the poor with rotten or near-rotten, toxic or semi-toxic, engineered or adulterated “food”, and another catering to the hunger of the rich. Sources of commodities sold in the two markets, color, tastes and prices of the commodities, purchasing capacity of the consumers in the two markets, labor-power spent for producing the two types of commodities, sales trend, environment footprint made for producing the two types of commodities for the two markets are different. The account is difficult to get hold of. However, inquiry in societies gives the picture that can make the poor aware of inequality.
Even the two food markets in advanced capitalist societies and in the poor southern hemisphere are different. In the poor periphery of the world system, the food inequality-picture with two markets turns vulgar and appears a cartoon as one encounters food-luxury and food-wastages enjoyed by the nouveaux-riches of poor societies. Making food wastages are part of the luxury the rich enjoy as it shows their opulence and power. They are not embarrassed, not shy, not with any guilty feeling for their dirty luxury. They are confident with their control of mass-psyche, with their manipulation power with information, and manipulation of awareness at the level of ordinary mass of consumers, with their capacity of scaling down of mass hatred to improper and unjust luxury of the rich, with the ideologies marketed that ignore or blur the question of inequality, that doesn’t vigorously and consistently raise the issue of inequality, that doesn’t question source of inequality.
A barbaric character of the inequality surfaces if one compares the market of luxury commodities the rich consume and the market of the food the poor are to survive on. Prices of villas, ranches, yachts, perfumes and diamonds the world rich class owns is now a known fact. Even the rich don’t feel ashamed with their scandalous properties. Now, the rich use drone for getting delivery of champagne. The poor can’t get hold of a drone for getting delivery of food essential for their survival, not even they can imagine or dream it. The time in the life of the poor seems immobile and ever-hungry. Isn’t this a part of inequality? Isn’t inequality bright as daylight?
So, only weighing food consumed and only looking at quality of food being consumed will not provide a full reality of food inequality. It should be related and compared with other parts of economy, with the way and amount/quantity the rich consume, indulge with, waste, destroy and pilfer. The comparison leads the inequality issue to the issue of deprivation of the masses of the poor.
Inequality in the food market turns cruel if a comparison is made between the amount/quantity the poor, the toilers produce and the amount/quantity they are handed over, the labor-power appropriated from them and the food thrown out to them. A look into profit and monopoly superprofit in the food industry helps understand the amount the toilers produce as profit is a converted form of surplus value. “[I]n its assumed capacity of offspring of the aggregate advanced capital,” Marx writes, “surplus-value takes the converted form of profit.” (Capital, vol. III) And, monopoly superprofit grows out of monopolies concentrating money capital, minerals and natural resources, means of transportation/communication, discoveries and inventions, marketing, decisive quantity of the means of production. “[M]onopoly”, writes Lenin, “yields superprofits, i.e., a surplus of profits over and above the capitalist profits that are normal and customary all over the world.” (“Imperialism and the split in socialism”)
Today’s world food market is controlled by monopolies making superprofits, and, the monopolies, borrowing from Lenin’s above mentioned essay, “‘ride on the backs’ of hundreds and hundreds of millions of people in other countries.” The food market thus bears the contradictions: superprofits/monopolies versus billions of people, monopolies versus countries ravaged by monopolies, monopolies versus local producers.
A butchers’ market
The food market is used as a weapon of war against societies trying to live with honor, trying to get out of the chain of the world capitalist system. Even, energy market is manipulated to manipulate the global food market. These turn the food market a butchers’ market. Imposed economic sanction/embargo/blockade by the world imperialism is the example; Cuba, Iraq under Saddam-rule are the examples. Dumping of food commodities including sugar is the example. These steps not only increase inequality, but also bring deaths, even “award” deaths of children although the children have no role in geopolitics. A glimpse doesn’t miss this “beauty” of the food market, a creation of imperialism, although mainstream prefers not to consider it while discussing inequality.
[It’s part VII of an essay on inequality]
Farooque Chowdhury is Dhaka-based freelancer
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