The pace of corporate concentration within the "life industry" is accelerating, according to a report by the United States-based Rural Advancement Foundation International (RAFI). "Life industry" is a term used by the giant transnational enterprises that basically control production and sales of commercial products for agribusiness, food and pharmacy.
The report warns that market dominance by these giant corporations, combined with monopoly patents, results in unprecedented corporate control over the biological basis for commercial food, farming and health.
The Gene Giants: Masters of the Universe? is RAFI's third annual report on the transnational enterprises that dominate commercial sale of pesticides, seeds, pharmaceuticals, food and animal veterinary products.
As traditional boundaries between the pharmaceutical, biotechnology, agribusiness, food, chemicals, cosmetics and energy sectors disappear, transnational firms are using complementary technologies — such as high-throughput screening, combinatorial chemistry, transgenics and genomics — to become the primary players in all of these industrial sectors.
According to RAFI, a radical transformation of the global economy is well under way. Many of the world's largest chemical corporations are shifting out of commodity petrochemicals into biology — changing from industrial chemicals to agribusiness, pharmaceuticals and food.
For example, as recently as 1996, Monsanto was the fourth largest chemical company in the United States. In a dramatic shift to biotechnology, Monsanto spun off its US$3 billion industrial chemicals business as a separate company in 1997. Since 1996, Monsanto has spent over US$8 billion acquiring seed and agricultural biotechnology companies.
In 1998, Hoechst (Germany) spun off Celanese, its US chemical subsidiary, in order to meet its goal of getting out of the industrial chemical industry by the end of 2000.
In December, Hoechst and France's Rhone-Poulenc merged to form Aventis — "the world's biggest life science company". With combined sales of US$20 billion per year, Aventis becomes the world's top ranking firm in sales of pharmaceuticals, agro-chemicals and veterinary medicines.
The combined research and development budget for Aventis will reach US$3 billion — roughly the equivalent of 40% of all funding for agricultural research in the private sector.
Food and beverages
The food and beverage giants, however, are the "true titans" of the "life industry". The total retail value of global food sales is estimated at US$2000 billion — over six times larger than pharmaceutical sales.
Put another way, the 1997 revenues of the world's largest food and beverage corporation (Nestle, US$45.3 billion) surpassed both the entire commercial seed industry (US$23 billion) and the entire agro-chemical industry (US$31 billion).
As genetic engineering and related technologies become more widely used to alter the function and performance of plants, animals and common ingredients, the food and beverage industry is likely to enter into strategic alliances, mergers and acquisitions with seed, biotech and agro-chemical and pharmaceutical firms.
The top 10 seed companies control over 30% of the US$23 billion commercial seed market. However, corporate market share is much higher in specific seed sectors and for certain crops.
For example, 40% of US vegetable seeds come from a single source, and just four companies control 69% of the North American seed corn market.
Following DuPont's March 1999 announcement that it would acquire the rest of Pioneer Hi-Bred International for US$7.7 billion, the Wall Street Journal said the deal "effectively divides most of the US seed industry between DuPont and Monsanto".
The commercial market for genetically engineered seeds has expanded dramatically in scale and geographic scope. From 1986 to 1997, approximately 25,000 transgenic crop field trials were conducted in 45 countries on more than 60 crops and 10 traits. Of this total, nearly half (10,000) were conducted in the last two years.
According to the International Seed Trade Federation, the world market for genetically engineered seed is expected to reach US$2 billion by the year 2000 and will triple to US$6 billion by 2005.
Chemical sales
Meanwhile, data recently released by consultants, industry associations and the US Department of Agriculture provide new information on agro-chemical sales worldwide and use of pesticides on US field crops.
Several sources estimated the world agro-chemical market at approximately US$31 billion in 1998. This represents less than 0.2% growth over 1997 sales, after figuring in currency and inflation factors. Sales of genetically engineered seed, however, increased by 145% over 1997 figures to US$1.6 billion.
According to the American Crop Protection Association, US agro-chemical sales by member corporations grew by 1.1% to almost US$9 billion in 1998. Agricultural pesticide use accounted for approximately 82% of sales. Exports remained the same as in 1997 at about US$2.9 billion; however, volume of exports rose by 8.7% to over 317 million kilograms.
Herbicides accounted for 68% of total US pesticide sales at approximately US$6 billion. Sales of herbicides for agricultural use fell by 1.8% to US$5.2 billion, while non-crop herbicide sales rose by almost 19%.
Almost 53% of all US agricultural agro-chemical sales were for pesticides used on maize and soybeans. Sales of soil-applied maize insecticides increased by 27% in 1998 to US$255 million. Cotton is still the third largest market, but sales were down by 11% from 1997 figures to US$732 million. Rice showed the greatest increase in pesticide sales in 1998, with the market increasing by 28% to US$191 million.
In the US last year, Monsanto's Roundup (glyphosate) replaced Cyanamid's imazethapyr as the most widely used herbicide on soybeans, according to the Department of Agriculture's National Agriculture Statistics Service. The volume of glyphosate used almost doubled to 12.7 million kilograms as a result of increased plantings of Roundup Ready soybeans (soybeans genetically engineered to be resistant to glyphosate).
In the 16 US states surveyed, herbicides were applied to 95% of the soybeans planted, representing 91% of total US soybean acreage. Glyphosate was applied to 46% of the surveyed acreage at an average rate of 800 grams per hectare. In contrast, only 28% of the surveyed acreage was sprayed with glyphosate in 1997.
Herbicides were applied to 96% of the maize planted in the 16 states surveyed. Maize grown in those states represented 89% of total US maize. Atrazine was applied to 69% of the maize and remains the most widely used herbicide on the crop. Insecticides including chlorpyrifos and terbufos were applied to 30% of the maize crop surveyed in 1998.
Ten states were surveyed for upland cotton in 1998, representing 92% of the total acreage. Trifluralin was the most widely used herbicide and was applied to 57% of the area surveyed — followed by fluometuron (32%) and glyphosate (30%). Insecticides were applied to 71% of upland cotton, with aldicarb being the most widely used.
RAFI states that unchecked corporate power coupled with the vanishing role of public sector research will affect all areas of global health, agriculture and nutrition. Neglect of the public good is inevitable when the research agenda is determined by the private sector in pursuit of corporate profits.
Access to food, health and nutrition—once considered a fundamental human right — is now subject to the whims of the free market system.
[From Pesticide Action Network Updates Service.]