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	How monopoly power tripled the profits of global agricultural commodity traders by SOMO, IPES Food, agencies Nigeria   Feb. 2024   Hungry for profits: How monopoly power tripled the profits of global agricultural commodity traders in the last three years. (SOMO)   In the last three years, the profits of the five biggest traders in agricultural commodities tripled compared to the years before. Together, ADM, Bunge, Cargill, COFCO and Louis Dreyfuss Company (ABCCD) hold a monopoly position on the global market for staples like grain, corn, soy and sugar. This enables them to influence pricing and costs, which resulted in their excessive profits and fuelled inflation, our report Hungry for Profits argues.   ADM, Bunge, COFCO, Cargill and Louis Dreyfuss Company together control between 70 and 90 per cent of the global trade in commercial grains. They are strongly vertically integrated, controlling a large part of food supply chains, working together closely through joint ventures and shared investments, and collecting large amounts of data on harvests, prices, and political developments in all parts of the world.   Their interconnectedness and market power are likely what allowed them to drastically increase their profit margins, leading to a tripling of their profits, boosting inflation, and worsening a global food crisis.   How the ABCCDs were able to excessively increase their margins on food commodities – generally interchangeable products traded on globalised markets – is unclear, though an emerging body of research provides explanations in the form of abuse of market power and oligopolistic price fixing.   In 2024, Viterra and Bunge announced their merger in a deal unprecedented in size in the global agricultural sector. This merger further strengthens the ABCCD’s dominant market position.   As people all over the world struggle with hunger and ever-rising costs of living, the five largest agricultural commodity traders announced their biggest profits ever. In 2022, the profits of the ABCCD tripled compared to the 2016-2020 period. Based on publicly available quarterly reports, it is very likely that 2023 will again be an extremely profitable year for companies pulling the strings in the food supply chain.   Monopoly power   In this research, the focus is on the five dominant companies in the global food supply chain. As a group, the Big Five control between 70 and 90 per cent of the global trade in commercial grains. Furthermore, they exert a high level of control on the main export markets of soy (Brazil, the United States, Paraguay and Argentina).   “This high degree of concentration, and resulting control over the world’s most important agricultural commodities, gives these firms enormous bargaining power to shape the global food landscape.” - SOMO researcher Vincent Kiezebrink   They hold their powerful position in the food supply chain due to a vast network of contracted agricultural suppliers, storage, processing (crushing), and transportation in core strategic food-producing countries or regions.   The ABCCDs supply farmers with loans, seeds, fertilizers and pesticides; they store, process and transport food commodities. Due to the companies’ involvement at most stages of the production process, companies have unique access to valuable market data.   This information puts them at a huge advantage over other parties in the food supply chain and can be used to influence and control the production stage all the way to processing.   This privileged position with regard to data seems especially advantageous when the agricultural commodity market is volatile and troubled, as in the current ongoing food crisis. In times of price spikes and volatility, insights into the future supply of relevant agricultural commodities are key.   Inflation and profiteering   The report also analyses research on inflation and profiteering by leading institutions and companies. High profits, as realised by the agricultural commodity traders in the last three years, can be partially explained by profiteering. Considering the strong and dominant market power of the agricultural commodity traders and their clear track record with regard to anti-competitive behaviour, the potential correlation with the recent extraordinary profits is not to be underestimated.   “We do not have a food crisis; we have a price crisis. The food corporations are shamelessly exploiting their monopoly power to artificially inflate prices. This greedflation must finally be put to a stop. We must break up these ruthless corporations, stop mega-mergers and tax their windfall profits.” - Martin Schirdewan, Member of the European Parliament   Curb monopoly power   The agricultural commodity trade market has become more and more concentrated. Since 1990, The EU competition regulators have assessed a total of 60 ABCCD cases of mergers and acquisitions. All but one have been approved unconditionally.   The next big planned merger is between Viterra and Bunge. The deal is unprecedented in size and will move the new company closer to the size of ADM and Cargill. The EU Commission still needs to assess this merger, which has already been approved by Bunge’s and Viterra’s shareholders.   The European Commission can stop the trend of ever-growing monopolisation. By investigating the various markets in which the ABCCD companies are active, including their horizontal and vertical integration, as well as the joint ventures and other cooperation agreements they have. The investigation should focus on the market power that can be exercised against suppliers to squeeze their profit margins.   In the short term, governments could implement a windfall profit tax in relation to large agricultural commodity traders, coupled with price gouging laws that would stop excessive price rises in times of emergency. It is a troubling reality that corporations have been allowed to triple their profits by driving up food prices while people around the world suffer from a cost-of-living crisis, and the world’s poorest are driven to hunger.   http://www.somo.nl/hungry-for-profits/ http://www.globalwitness.org/en/campaigns/forests/the-cerrado-crisis-brazils-deforestation-frontline http://grain.org/en/article/6964-hunger-profiteers-in-latin-america http://www.ipes-food.org/pages/tippingthescales http://www.fao.org/cfs/cfs-hlpe/insights/news-insights/news-detail/challenges-of-implementing-a-human-rights-approach-to-food-security-and-nutrition/en   Feb. 2024   Cost of living pressures force Nigerians to turn to rice that's normally thrown away, writes Mansur Abubakar for BBC World News.   As the rising cost of living continues to bite, many in northern Nigeria are turning to rice grains that millers normally reject after processing or sell to farmers to feed their fish.   These are referred to in the Hausa language, widely spoken in the north, as afafata, which means "battling" because they are literally a battle to cook and eat as the grains are so hard.   "A few years ago, people didn't care about this type of rice, and we usually threw it away along with the rice hulls, but times have changed," Isah Hamisu, a rice mill worker in the northern city of Kano, told the BBC.   Despite the grains being broken, dirty and tough, afafata's cheaper price has helped poorer families to be able to afford to eat.   Prices in Nigeria are increasing at their fastest rate for nearly 30 years. On top of global pressures, President Bola Tinubu's cancellation of the fuel subsidy plus the devaluation of the currency, the naira, have added to inflation.   A standard 50kg (110lb) bag of rice, which could help feed a household of between eight and 10 for about a month, now costs 77,000 naira ($53). This is an increase of more than 70% since the middle of last year and exceeds the monthly income of a majority of Nigerians.   In the face of this many are struggling to cope and in some states there have been cost-of-living protests.   Earlier this month in Niger state, central Nigeria, protesters blocked roads and held placards saying that they were being suffocated by the rising prices.   A few days later there was a similar demonstration in Kano in the north-west. In the aftermath, Governor Alhaji Abba Kabir Yusuf admitted there was starvation in his state and said a solution must be found.   The solution, for now, for some is found in afafata. Hajiya Rabi Isah, based in Kano state, told the BBC that if it were not for this type of rice her children would go hungry as she cannot afford the normal kind.   "Normal rice is 4,000 naira ($2.70) per bowl which is beyond my means, I can only afford afafata which is 2,500 naira ($1.69) now," she said. One bowl of rice from the market can feed an average family in Kano for a day. "Without afafata, feeding my family would be a major issue for me."   Market sellers have also noticed a difference. Saminu Uba, who works in Kano's Medile market, said the afafata side of his business is booming.   "Most people can no longer afford normal rice and they come for this which is cheaper even though it tastes less good," he told the BBC. One of his customers, Hashimu Dahiru, admits people are having to find ways of adapting.   "The cost of goods is alarming - in just two months the price of everything has doubled,'' he said. "Our wives spend hours removing stones and dirt from the rice before cooking and even then it ends up tasting not nice, but we have to eat to survive."   The presidency has said it is doing all it can about the situation, including the distribution of more than 100 tonnes of grains such as rice, millet and maize in the hope that it would cushion the effects of inflation and help lower the market price.   But the president's aide Bayo Onanuga upset many recently when he said that Nigeria still had one of the lowest costs of living in Africa. The increasing price of rice is not a new problem though.   President Tinubu's predecessor, Muhammadu Buhari, banned the importation of rice to encourage more Nigerian farmers to grow the crop, but local producers have been unable to meet the demand. Before then Nigerian markets were filled with rice from Thailand at an affordable price for many.   Mr Tinubu has lifted import restrictions, but now the shortage of foreign currency and the falling value of the naira has made bringing in rice more expensive.
	Business, planetary boundaries, and the right to a clean, healthy and sustainable environment by David R. Boyd Special Rapporteur on human rights obligations to a a safe environment   Mar. 2024   Rethinking business and economic paradigms for people and planet to survive. (OHCHR)   There is an urgent need to rethink business and economic paradigms that have pushed humanity’s collective impacts beyond planetary limits, a UN expert said today.   “We are sabotaging Earth’s life support system, with profound consequences for human rights,” said David Boyd, UN Special Rapporteur on human rights and the environment.   In his report to the Human Rights Council, he stated that the current practices of large businesses are threatening the ecological integrity of the planet and abusing human rights, including the right to a clean, healthy and sustainable environment.   “States have failed to adequately regulate, monitor, prevent and punish businesses for their abuses of the climate, environment and human rights,” Boyd said. “The situation is further exacerbated as States often encourage, enable and subsidise destructive business activities.”   The Special Rapporteur highlighted some of the most destructive impacts of business enterprises on the right to a clean, healthy and sustainable environment, which are also documented in a policy brief supplementing his report.   “All businesses are responsible for respecting human rights, including the right to a healthy environment,” he said.   The expert stressed that States have a duty to protect human rights from actual and potential harm that businesses may cause, and an obligation to hold businesses accountable.   “The recent recognition of the right to a clean, healthy, and sustainable environment has game-changing potential if States and businesses comply with their obligations and responsibilities,” he said.   Boyd made recommendations on how to fulfil this right and achieve ecological sustainability. He called for shifting to holistic alternatives to GDP for measuring progress, human rights due diligence legislation, rights-based climate and environmental laws, making polluters pay, and new business paradigms focused on society benefits instead of shareholder profits.   “In the big picture, humanity needs to shrink its collective ecological footprint, yet billions of people in the global South need to expand their energy and material use to achieve a comfortable standard of living and fully enjoy their human rights,” the Special Rapporteur said.   “Society must confront this paradox. Wealthy States must take the lead in reducing their footprints and financing sustainable and equitable growth in the global South.”   “Paradoxically, businesses have a critical role in supporting society’s quest for a just and sustainable future. Therefore, we need to promote good practices and require all businesses to shift to a paradigm that puts people and the planet before profit,” the expert said.   http://www.ohchr.org/en/documents/thematic-reports/ahrc5543-business-planetary-boundaries-and-right-clean-healthy-and http://www.ohchr.org/en/special-procedures/sr-environment/policy-briefs http://news.un.org/en/story/2024/03/1147322   Oct. 2023   Investor-State dispute settlements have catastrophic consequences for the environment and human rights: UN expert. (OHCHR)   A UN expert has warned of the devastating effects of Investor-State dispute settlement with dire consequences for a wide range of human rights and climate action.   “At a time when it is imperative that States accelerate the pace and ambition of climate and environmental action to prevent planetary catastrophe and fulfil their human rights obligations, a daunting obstacle has emerged,” said David Boyd, the UN Special Rapporteur on human rights and the environment presenting his report today to the General Assembly.   His report chronicles compelling evidence that a secretive international arbitration process called investor-State dispute settlement has become a major obstacle to urgent actions needed to address the planetary environmental and human rights crises.   “Foreign investors use the dispute settlement process to seek exorbitant compensation from States that strengthen environmental protection, with the fossil fuel and mining industries already winning over $100 billion in awards,” the expert said. “Such cases create regulatory chill.”   The surge in fossil-fuel ISDS claims could not come at a worse time. Humanity has reached the now or never point for achieving the Paris Agreement objective of limiting global warming to 1.5°C, a goal that requires achieving net zero emissions by 2050 - incompatible with new coal, oil or gas developments.   Governments fulfilling their commitments under the Paris Agreement on climate change may be liable to oil and gas corporations for $340 billion in future ISDS cases – a major disincentive for ambitious climate action.   “As ISDS arbitration tribunals routinely prioritise foreign investment and corporate interests above environmental and human rights considerations, ISDS claims have devastating consequences for a wide range of human rights, exacerbating the disproportionate harms suffered by vulnerable and marginalised populations,” the expert said.   As the overwhelming majority of fossil fuel and mining ISDS claims are brought by investors from the global North against respondent States in the global South, the ISDS system has especially devastating consequences for the global South, perpetuating extractivism and economic colonialism.   The Special Rapporteur identifies specific actions that States must take to avoid future claims under the investor-State dispute settlement process and fulfil their human rights obligations in his report.   http://www.ohchr.org/en/press-releases/2023/10/investor-state-dispute-settlements-have-catastrophic-consequences http://www.ohchr.org/en/documents/thematic-reports/a78168-paying-polluters-catastrophic-consequences-investor-state-dispute http://www.iied.org/fossil-fuel-companies-rake-80-billion-taxpayers-money-through-shadowy-investment-tribunals http://www.france24.com/en/live-news/20231215-countries-risk-paying-polluters-billions-to-regulate-for-climate-un-expert http://www.theguardian.com/environment/2024/feb/12/litigation-terrorism-how-corporations-are-winning-billions-from-governments   http://insideclimatenews.org/news/21102023/un-protests-isds-as-economic-colonialism/ http://insideclimatenews.org/news/14012024/wealthy-corporations-extract-millions-from-developing-countries-isds/ http://www.iied.org/icj-should-address-legal-contradictions-holding-back-action-climate-change http://www.iied.org/21871iied http://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(23)00214-0/fulltext http://www.iisd.org/publications/report/investor-state-disputes-fossil-fuel-industry Visit the related web page
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