Brazil: Big capital takes over agriculture

Issue 

In recent years, there has been an intensive, continuous process of concentration and centralisation 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. In every sector of production, an oligopoly is being created, with a few corporations controlling the sector.

The second movement of capital is centralisation, in which a single corporation comes to control several sectors of production, sometimes even sectors unrelated to one another.

These two logical movements of capital have been accompanied in the agricultural sector with a process of internationalisation of control of the market and trade. 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 when V.I. Lenin formulated the theory of imperialism, in large industrial enterprises — also came to dominate the agricultural sector in the last decade.

Oligopolistic corporations

Today, almost all branches of agricultural production are controlled by groups of oligopolistic corporations, which coordinate among themselves.

Thus, multinational corporations such as 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 Nestle, Dannon and Parmalat.

Here in Brazil, the entire production of raw materials for fertilisers 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 and New Holland monopolise 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 US. 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 US$330 billion was poured into Brazil.

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 went to purchasing land. Folha de Sao Paulo estimated that foreign capital bought more than 20 million hectares in recent years, especially in the mid-west regions and the new agricultural frontier of the so-called Ma-pi-to (Maranhao, Piaui, 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 that can be 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 found in Brazil.

Agricultural monoculture

The expansion of eucalyptus monoculture throughout the region stretching from Bahia in the south to the Uruguayan border is 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 ethanol pipelines.

Two of these ethanol pipelines are owned by the state-run Petrobras and the other two will be owned by foreign investors.

Foreign capital also sped up its investment in the production of transgenic seeds, especially maize. Syngenta, Monsanto, and Bayer are lobbying and pressuring the government to allow their varieties of genetically modified corn into Brazil. 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, over-exploiting agricultural labour, and sometimes even using slave labour.

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 labour, for it uses herbicides and high-tech mechanisation at all levels.

The result is already visible in statistics. Brazil is turning toward large-scale monoculture for export. A kind of agro-export re-colonisation, reminiscent of the days of empire.

Of the 130 million tonnes of grain produced, no less than 110 million tonnes 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 eucalyptus. 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

The contradictions of this perverse model came to the surface quickly.

Food prices soared, as a result of financial capital's speculation at the stock exchanges and monopolistic corporate control of the market. The price 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 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 Brazil, resolved to unite and amplify their protests. In recent months, peasant protests multiplied in all states, against the model and operation of the transnational corporations.

These protests have served as a warning to Brazilian society that it must wake up, given the gravity of the problem.

Foreign corporations and their Brazilian guard dogs are aware of the social and environmental problems that they are causing. 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 stands by them ideologically, in order to criminalise, with many prosecutions, social movement activists.

And where none of these solve the problem, resort to repression, particularly in the states ruled by right-wing parties such as Rio Grande Do Sul, Sao 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 for all people.

There will be many battles — that is certain.

[Joao Pedro Stedile is a national coordinator of Via Campesina Brazil. Abridged from MRZine, http://mrzine.monthlyreview.org. English translation by Yoshie Furuhash.]