Agribusiness
Global Issues in Context Online Collection, 2013.
Agribusiness is a term that refers to all business aspects related to agriculture, including farming,
agrichemicals (chemicals used in agriculture), genetically engineered (GE) seeds, genetically modified
organisms (GMOs), food distribution, food processing, and sales. More specifically, the term is often used
to refer to farming corporations and large agricultural conglomerates, which are corporations comprised of
several companies in various areas of the agricultural business, such as production, processing, and
distribution of food. Supporters of corporate farming and agricultural conglomerates note that these
companies save millions of people from starvation by increasing crop yields and improving food
distribution systems. Opponents of agribusiness criticize these companies for destroying small farms,
harming the environment with agrichemicals, and creating unknown risks to humans and the environment
by genetically modifying food.
Agricultural production has been a key to human existence for millennia and is one of the defining
characteristics of civilization. Since virtually all humans rely on agriculture for survival, agriculture
remains one of the world's largest economic sectors, employing approximately 40 percent of all workers
globally. (The service sector overtook agriculture as the largest sector of the global economy in 2003.)
Since many workers employed in agriculture work for their own sustenance or for relatively low wages,
however, agriculture only accounts for about 5 percent of the gross world product. Nevertheless, agriculture
is a multi-trillion-dollar per year business.
Until the nineteenth century, agriculture remained inefficient, producing relatively low yields.
Improvements in agricultural techniques, new plant cultivars, and the invention of agricultural equipment
greatly increased agricultural production in the late nineteenth and early twentieth centuries. The mass
production and use of synthetic pesticides and fertilizers in the mid-twentieth century further increased crop
yields.
Major agricultural conglomerates rose to prominence on the world stage during a significant transformation
in agriculture known as the Green Revolution, which began in the mid-twentieth century. The Green
Revolution involved the exportation of the agricultural practices of the industrialized world to the
developing world. The Green Revolution had a profound effect on crop yields. Worldwide wheat yields, for
example, increased by 250 percent during the twentieth century.
The Green Revolution began in Mexico in the 1940s. Mexico, a net importer of half of its wheat, desired to
produce enough food for its rapidly growing population. By using modern production methods, including
mechanization and the use of synthetic agrichemicals, Mexico established self-sufficiency in wheat
production by 1956. The Green Revolution also proved successful in India and Southeast Asia. Although
famine was once common in these areas, the Green Revolution brought better agricultural practices and a
new strain of high yield rice. India has not had a major famine since the Green Revolution and is now a net
exporter of rice.
In addition to feeding the world's growing population, the Green Revolution opened new markets to
agricultural conglomerates. Agribusiness benefited greatly from the expanding markets for agrichemicals,
new plant hybrids, and, more recently, genetically engineered crops. Agribusiness profits increased the
push for new technologies and improved production and distribution methods, which saved countless
millions of people from hunger or starvation.
Large agribusiness conglomerates have numerous critics who deride corporate farming's negative effects on
family-owned farms, the environment, and food safety. Critics often blame corporate farms for destroying
small, family-owned farms. Farm output increased greatly in the twentieth century, but this production
efficiency came at increased costs to the farmer for mechanization, fertilizers, and pesticides. Increased
crop production led to an increase of supply, which drove down the price farmers received for their crops.
This new economic environment favored large business that derived profit from sources other than
production, such as agrichemical production or food distribution. A debate exists over whether corporate
farming practices or changing economic conditions of agriculture led to the demise of the family farmer.
Regardless, today only 2 percent of U.S. farms produce 50 percent of all food products in the United States.
Critics also point to the impact that agribusiness has on the environment by using agrichemicals, injecting
animals with hormones and antibiotics, and decreasing biodiversity. The Green Revolution greatly
increased pesticide and inorganic fertilizer use around the world. Agriculture and other industries use
approximately 2.5 million tons of pesticides per year. Fertilizer use has increased from 31 million tons in
1961 to approximately 200 million tons in 2008. Pesticides, herbicides, and fertilizers seep into
groundwater and run off in surface water. Once these chemicals enter the local ecosystem, they can kill
aquatic animals through eutrophication, a process in which excessive nutrients in water create algae blooms
and diminish the oxygen level of the water.
Agribusiness also affects biodiversity, the variation of plant and animals present within a particular
ecosystem. The lack of biodiversity is known as monoculture. Corporate farming, particularly the
development of specialized hybrid and GE seeds, has decreased agricultural biodiversity because farmers
desire these higher-yield seeds. Although humans cultivate thousands of plant species for food production,
approximately 80 percent of the world's food supply comes from only 20 kinds of plants. Monoculture
threatens the world's food supply. A fungus, insect, or disease that attacks a widely grown species of plant
could have devastating effects. The over-reliance on a particular variety of potato led to the Great Famine
in Ireland in the mid-nineteenth century, when potato blight destroyed Ireland's potato crop for several
years in a row. To preserve the biodiversity of Earth's flora, the Norwegian government recently opened the
Svalbard Global Seed Vault on a remote island in the Arctic. Scientists intend to preserve the seeds of up to
4.5 million species of plants in conditions that will preserve them for centuries.
Some of the harshest criticism of agribusiness over the last decade has centered on the development of
genetically engineered (GE) plants. To create GE plants, scientists alter the genetic material within a
particular species to achieve a desired trait, such as increased yield, drought tolerance, or herbicide
resistance. Many critics assert that GE plants are not safe for human consumption, although scientific
studies have not indicated any difference between GE plants and their conventional counterparts.
Opponents of large agricultural corporations also criticize the manner in which these companies enforce
their GE crop patents. A patent is a government grant of the exclusive use of a process or invention given to
the inventor for a certain period of time. Patent holders may sue anyone who uses the patented product
without the patent holder's permission. The lawsuits force the violator to cease using such processes or
inventions while helping the patent owner recover monetary damages. Large agricultural corporations sell
GE seeds to farmers under license. The license requires the farmer to abide by certain rules. If farmers
violate the license agreement, then they are in violation of the company's patent on the GE seed. A common
provision in seed license agreements requires farmers to destroy or return all of their seed after harvest.
Traditionally, farmers would retain seed for planting during the next season. Under the seed license
agreement, farmers must purchase new seed each year from the GE seed manufacturer. Since the mid–
1990s, Monsanto, one of the largest producers of GE seed, has sued more than 150 farmers for violating the
company's patents on GE seeds. In one notable case, Monsanto sued Percy Schmeiser, a Canadian farmer,
after Monsanto seed from a neighboring farm inadvertently cross-pollinated with the Schmeiser's crop. The
Supreme Court of Canada ruled in favor of Monsanto.
As the world's population continues to grow, humans place increasing pressure on arable land and the water
supply. Environmentalists remain split over the role of agribusiness. Some environmentalists oppose
corporate farming for many of the reasons stated earlier, including the impact on biodiversity and the use of
agrichemicals and GE seeds. Other environmentalists, however, believe that responsible corporate farming
will actually benefit the environment by producing higher-yield crops. The cultivation of higher-yield crops
will reduce the amount of land required to feed a growing population, which results in less clear-cutting of
rainforests or destruction of natural prairie.
War and agribusiness do not seem to go together, but the United States Army is turning increasingly to
specially trained army units of agribusiness experts in its ongoing war in Afghanistan. Starting in 2009, the
army's Agribusiness Development Teams—composed of specialists in such diverse fields as agronomy,
animal husbandry, veterinary medicine, agriculture marketing, soil science, pest management, forestry, and
even beekeeping—began one-year deployments to Afghanistan. Most of the Agribusiness Development
Teams are made up of National Guardsmen from twelve farm-belt states. According to the U.S. Army Web
site, the mission of the teams is to help Afghanistan "attain a functional level of prosperity and selfsustainability through improved agricultural methods." The hope is that Afghan farmers will be less
vulnerable to the influence of insurgent groups if they can make comfortable incomes through sustainable
means.
Environmentalists' warning that the overuse of herbicides could lead to the development of chemicalresistant weeds appeared to be justified in 2010, as "superweeds" invaded prime farming areas of the
United States. The weeds are resistant to the widely used herbicide Roundup, a weed killer sold by the
chemical company Monsanto since the 1970s. Roundup has proved unreliable in killing ten major weed
species in twenty-two states. The effectiveness of Roundup coupled with the introduction by Monsanto of
Roundup-resistant crop seeds allowed farmers to cut back on herbicide use and the practice of tilling, which
can lead to erosion. Scientists worry that the growth of superweeds will force farmers to use older, more
environmentally dangerous herbicides. Farmers worry that superweeds will force them to use more laborintensive weed-fighting methods, which will raise their costs and raise the price of food. However, farmers
and scientists in Australia, which has faced Roundup-resistant superweeds since the 1990s, say that
treatment with a combination of Round-up and various other weed-fighting practices is highly effective and
safe.
The European Union (EU) proposed major changes in farm spending, to begin in 2013. The EU's farming
budget of 60 billion euros was spent largely on subsidies to farmers in 2010. Subsidy and grant programs
offered through the Common Agricultural Program (CAP) would remain in place, according to the
European Commission, but will be made "greener, fairer, and more efficient." Critics of current CAP
policies said that subsidies have led to pointless overproduction in the past and have discouraged farmers
from innovation or adoption of best practices. They also charged that Western European nations are given
preferential treatment over newer EU members, mostly former communist nations. Under the new
proposal, all EU countries would be treated equally, and CAP spending would be "better targeted towards
active farmers."
In the United States, agribusiness took a big hit on 11 January 2012, when major firm Archer Daniels
Midland Co. announced a 3 percent cut in its workforce. The company expected that the cut of more than
one thousand jobs, in addition to other cost-reduction measures, would reduce company costs by more than
$100 million.
Monsanto suffered a legal defeat on 13 February 2012 when a French court found the agribusiness giant
guilty of chemically poisoning a French farmer. The farmer claimed to have suffered numerous
neurological problems after inhaling a quantity of one of Monsanto's weed-killing products, and charged
the company with failing to provide adequate warning labels on the product. The ruling may lend support
to other ongoing legal cases involving farmers filing health claims related to Monsanto products.
On 1 January 2013, the United States Congress extended the 2008 Farm Bill for nine months in order to
create a new five-year replacement bill. Without the extension, retail milk prices could have risen to $7 per
gallon within the ensuing months. Lawmakers have until 30 September 2013 to finalize the $500 billion
bill.
On 26 May, a worldwide "March against Monsanto" was held in more than 250 cities to protest genetically
modified food and raise attention to the dangers allegedly caused by them. The demonstration was also
against the highly toxic chemicals produced by Monsanto.
COPYRIGHT 2013 Gale, Cengage Learning
Source Citation
"Agribusiness." Global Issues in Context Online Collection. Detroit: Gale, 2013. Global Issues In Context.
Web. 12 July 2013.
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