Discuss the advantages and disadvantages of the involvement of TNCs in the global food industry (15)
Start with page 234, Make use of Geofile 541 and your case studies...
Advantages / DisadvantagesSocial
Economic
Environmental
Political
What mark are you aiming for? A reminder:
Level 3: answers the question very well (detailed) An answer at this level is likely to: include a wide range of reasons, support from appropriate and highly detailed exemplification, focuses on the command word, communicates clearly and accurately.(revisit your mark sheet!)
TNCs have a political voice that can influence policies that reflect their interests
Some TNCs control entire markets e.g. Chiquita and Dole control 50% of world trade in bananas
Horizontal Integration of the corn exporting industry in the USA is dominated by Cargill, ADM and General Mills – hence they control prices and can price some countries out of the market.
Wal-Mart, the world’s largest food retailer has enormous influence. It has profits bigger than some African Nations.
Wal- Mart created bidding wars and forced down the price of bananas
Controlling prices means that growers in the developing world cannot get fair prices. In Costa Rica, Wal-mart’s actions resulted in farmers not
Getting the legal minimum price for a box of bananas
Destruction of traditional agricultural communities – indigenous communities of the rainforests of Paraguay have been forced to migrate to the cities as their land has been taken for soy production.
They offer low-wage, labour intensive employment
In parts of Kenya, many of the labourers are women who work for 12 hours a day
Many processes are environmentally damaging e.g. extensive use of chemicals to farm soy in Argentina.
Intensive farming of Pineapples in Costa Rica by companies such as Del Monte needs very large amounts of pesticides, about 20kg of active ingredient per hectare per cycle. The soil is sterilised; biodiversity is eliminated.
TNCs provide employment in the countries in which they operate
They impose uniformity on agricultural production which risks sustainability
Many products grown in developing countries are not directed at local needs, so food shortages continue. Green Bean farms in Kenya are an example of this.
The promotion of GM crops by companies such as Monsanto – huge amounts of money put into research and development. GM crops increase yields and therefore secure food supplies.
Four firms, one of which is Monsanto control over 50% of global seed sales.
Smaller businesses cannot compete – Indian shopkeepers are currently fearful of the role that Tesco may have in expanding India’s network of hypermarkets.
Cargill is accused of doubling deforestation rates when it built a port and 13 soya storage works in Amazonia.
They provide plentiful food at low prices
The range of food has increased
TNCs invest in agricultural technology that can increase yields
TNCs have buying power. A UK report showed Tesco consistently paid suppliers 4% below the industry average, while smaller supermarkets paid above the average rate.