International Capital Dominates Brazilian Agriculture
by João Pedro Stedile
The Movement of Financial Capital
In recent years, there has been an intensive, continuous process of concentration and centralization of corporations operating and controlling the entire production process of global agriculture.
Concentration is the concept used in political economy to explain the movement of large corporations to combine, accumulate, and become large groups. Thus, in every sector of production, a situation of oligopoly is being created, with a few corporations controlling the sector. The second movement of capital is centralization, in which a single corporation comes to control several sectors of production, sometimes even the sectors unrelated to one another. These two logical movements of capital have been accompanied in the agricultural sector with a process of internationalization of control of the market and trade at the global level. In other words, some corporations have come to operate in every country and control the global market.
This dual movement of capital -- which was very much noticeable, from as far back as the theory of imperialism, in large industrial enterprises -- also came to dominate the agricultural sector in the last ten years. And what is most dangerous, now under the hegemony of financial capital, the velocity and volume of capital invested in agriculture were much faster and greater than had been the case in other productive sectors through the course of the twentieth century. That is because much capital in the form of money, i.e. financial capital, accumulated in rich countries in recent years. This capital was shifting to the purchase of shares in the most profitable corporations of the primary sector as well. Thus, in just a few years, as an effect of the investment of this financial capital in stock purchases, concentration and centralization became extraordinary.
Today, almost all branches of agricultural production are controlled by groups of oligopolistic corporations, which coordinate among themselves. Thus, Cargill, Monsanto, ADM, Dreyfus, and Bunge alone are responsible for 80% of the total world production of and trade in grains such as soybeans, corn, wheat, rice, and sunflowers. Monsanto, Novartis, Bayer, and Syngenta control the entire production of transgenic seeds. In the dairy products and derivatives sector we come up against Nestlé, Dannon, and Parmalat. Here in Brazil, the entire production of raw materials for fertilizers is controlled by just three transnational corporations: Bunge, Mosaic, and Yara. Only two corporations, Monsanto and Nortox, produce glyphosate, a raw material for agricultural pesticides. AGCO, Fiat, New Holland, etc. oligopolize the agricultural machinery sector.
This movement, which had begun to develop in the 1990s, accelerated in the past two years with the crisis of capitalism in the United States. Interest rates in the core countries fell to an annual rate of 2% and, given the inflation rate, reached the point where banks would lose money. Then, financial capital shifted to the periphery of the system to protect itself from the crisis and maintain its profit rates. Over the past two years, nearly 330 billion dollars of money poured into Brazil. A part of that capital was invested through local banks, to encourage the buying of real estate, household appliances, and cars on credit, at the average annual rates of 47%. Sheer madness, compared with the rates in developed countries.
Another part of capital was destined to the purchase of lands. One report in the Folha de São Paulo newspaper estimated that foreign capital bought more than 20 million hectares in recent years, especially in the midwest regions and the new agricultural frontier of the so-called Ma-pi-to (Maranhão, Piauí, and Tocantis), where land prices were much lower. Yet another part headed to the Amazon in search of mining areas, hydroelectric projects, and possession of huge areas of biodiversity which later will bear fruit if they are exploited by their laboratories.
In the cellulose sector, three large groups -- Aracruz (Norway), Stora Enzo (Sweden-Finland), and International Paper (US) -- moved their entire production to the rich soil and climatic conditions found in Brazil. So, the expansion of eucalyptus monoculture throughout the region stretching from Bahía in the south to the Uruguay border and six new factories are being planned. Thousands of hectares of industrial eucalyptus plantations will destroy everything, creating a veritable green desert.
Likewise, there was a major investment of foreign capital in the expansion of sugarcane monoculture for ethanol production and export. The sugarcane area increased from 4 to 6 million hectares. There are 77 projects for new ethanol plants, which will be built along four major alcohol pipelines projected to transport alcohol from the midwest to the ports of Santos and Paranaguá and from the Palmas region (Tocantins State) to the port of São Luis (in Maranhão State). Two of these alcohol pipelines are owned by Petrobras and the other two will be owned by foreign investors.
Foreign capital also speeded up its investment in the production and multiplication of transgenic seeds, especially maize. Hence Syngenta, Monsanto, and Bayer are lobbying and pressuring the government to allow their varieties of GM corn. Some of these varieties are banned in Europe, but here . . . anything goes!
This avalanche of foreign capital to control our agricultural production and inputs and to expand production for export was made possible only by the alliance of the aforementioned corporations and the big landowners. The landowners with large tracts of land are getting in on the action as subordinate associates of big corporations, plundering the environment, overexploiting agricultural labor, and sometimes even using slave labor.
This agricultural model, which is called agribusiness, is the marriage of transnationals and big landowners. In it there is no room for peasant family agriculture or agricultural labor, for it uses herbicides and high-tech mechanization at all levels.1
The result is already visible in statistics. Brazil is turning toward large-scale monoculture for export. A kind of agro-export re-colonization, reminiscent of the days of empire. Of the 130 million tons of grain produced, no less than 110 million tons are just soybeans and corn. In cattle production, 300 million hectares are for export production. And what's left is an immense green desert of eucalyptuses. That's the Brazilian model! It will be profitable to some landowners and a few foreign corporations. But the Brazilian people will be left with environmental liability, unemployment, and poverty.
Contradictions Emerge Rapidly
The contradictions of this perverse model come to the surface quickly. Food prices soared, as a result of financial capital's speculation at the stock exchanges and oligopolistic corporate control of the market. The dollar prices of food doubled over the past year. Food is increasingly contaminated by the intensive use of pesticides. Agribusiness fails to produce healthy food, without herbicides. Only peasant family farming succeeds in doing so. The intensive production of ethanol through sugarcane monoculture does not solve the problem of global warming -- on the contrary, it aggravates it. The biggest problem concerning fuels is not just oil -- it is, above all, the individual form of transportation promoted by financial capital to push for increased sales of cars on credit. They are transforming our cities into a hell.
This form of monoculture depletes natural resources, soil and groundwater, and affects the quality and location of water. Monoculture destroys biodiversity and upsets the environmental balance of the region.
Faced with this situation, social movements, assembled into Via Campesina of Brazil, resolved to unite and amplify their protests. In recent months, peasant protests multiplied in all states, against the model and operation of transnational corporations such as Monsanto, Cargill, Syngenta, Bunge, Bayer, etc. These protests have served as a kind of pedagogy of masses -- a warning to Brazilian society that it must wake up given the gravity of the problem and its future implications.
The Response of Businesses. . . .
Foreign corporations and their Brazilian guard dogs are aware of the social and environmental problems that they are causing. Since they don't have right on their side in the way they dominate nature, they have resolved to confront the movements of Via Campesina by combining a variety of tactics. First, million-dollar PR campaigns featuring famous artists in the press. Second, right-wing sectors' manipulation of the judiciary and the Public Ministry, which stand by them ideologically, in order to criminalize, with many prosecutions, social movement leaders and activists. And where none of these solves the problem, resort to repression, particularly in the states ruled by right-wing parties such as Río Grande Do Sul,2 São Paulo, Rio, and Minas Gerais, where the state governments do not hesitate to use the military police to violently repress the movement.
It is nothing but self-deception to believe that this type of problem can be solved with PR or repression. This is a historic conflict between two ways of producing food. One seeks only profits, even at the cost of poisoning nature and its products. The other is geared to the production of healthy food as a right of all people. There will be many battles -- that is certain.
1 For the Brazilian model of agriculture, see Via Campesina Brazil, "Queremos producir alimentos" (We Want to Produce Food), , 10 June 2008.
2 In the State of Río Grande do Sul, the Landless Workers Movement (MST) faces powerful judicial persecution: the Public Ministry has come to seek its dissolution, and several militants of social movements have been prosecuted. See Frei Betto, "Suprimir el MST o el latifundio improductivo?" (Suppress the MST or the Unproductive Latifundium?), 8 July 2008.
João Pedro Stedile is a National Coordinator of Via Campesina Brazil. The original article in Portuguese, "O capital internacional esta dominando a agricultura brasileira," was published on the Web site of the Agencia Latinoamericana de Información on 29 July 2008 and the Spanish translation "El capital internacional está dominando la agricultura" appeared on 30 July 2008. English translation by Yoshie Furuhashi.