25 January 2005

Multinational food companies are growing too big and powerful and are threatening the fight against poverty in developing countries, says a new report by development agency ActionAid.

As Tony Blair prepares to attend a meeting of the world’s richest business and political leaders at the World Economic Forum in Davos, ActionAid launches its ‘Stop corporate abuse’ campaign calling on the UK government to lead the way in regulating the activities of multinationals overseas.

The report – Power hungry: six reasons to regulate global food corporations – reveals that the activities of multinational food and agribusiness companies and their subsidiaries, such as Nestlé, Monsanto, Parmalat, Syngenta and Unilever, threaten the livelihoods of hundreds of thousands of poor farmers and undermine basic rights.

ActionAid’s evidence from Brazil shows that 50,000 dairy farmers have been forced out of business, after a series of takeovers by Nestlé and Parmalat. In India, an estimated 12,000 children worked last year on cotton seed farms supplying subsidiaries of Bayer, Monsanto, Syngenta and Unilever. Many children were also exposed to dangerous pesticides.

In the Indian tea sector – where two big companies control more that half the market – thousands of small-scale tea growers and plantation workers are struggling to earn enough to feed their families.

These cases provide condemning evidence of the impact of increasing corporate power within the global food chain. The statistics are alarming:

• trade within multinationals accounts for about 60% of all global trade
• three companies control 85% of the world’s tea market
• two companies handle 50% of the world’s trade in bananas
• in Côte d’Ivoire, four multinationals control 95% of cocoa processing
• in Peru, Nestlé controls 80% of milk production.

"From our morning tea, to the cotton in our T-shirts or the chocolate bars we eat – a few multinationals are reaping benefits from the products we buy every day," says Julian Oram, policy officer from ActionAid. "Our research shows that the world’s poorest farmers are in effect subsidising the world’s largest food companies, and in many cases are paying with their health, livelihoods and basic rights."

ActionAid calls on Tony Blair to help MAKEPOVERTYHISTORY in 2005 by:

• holding multinational companies legally accountable for their impacts on human rights and the environment
• reforming global agri-food markets to protect and promote the rights of rural communities in poor countries

ActionAid recognises that multinational companies can bring benefits to poor communities. Unfortunately, even the most progressive multinationals are not fully accountable for their social and environmental impacts.
"Current UK law puts the interests of shareholders above the rights of the men, women and children who grow the food we eat," says Ruchi Tripathi, head of ActionAid’s food rights campaign. "The government must turn this on its head and introduce regulation that puts the rhetoric of corporate responsibility into legal practice."