While at least 60 countries in the world, according to the UN, are dealing with the famine triggered by the wheat crisis (in turn also fueled by the war in Ukraine), the 4 multinationals that control the global cereal market are recording record profits . A positive trend that could continue for a long time, and whose downside is the increasingly higher prices of food. This is why, according to various activists and NGOs, Western governments should institute an ad hoc tax on such “unexpected” profits, the so-called windfall tax discussed so far in relation to the profits of energy companies. This is what emerges from an investigation of the Guardian.
The eyes are on Western governments given that the 4 “sisters” of cereals (Archer-Daniels-Midland Company, Bunge, Cargill and Louis Dreyfus, also renamed ABCD) are based in the USA and Europe, to be precise in the Netherlands, and they control about 70-90% of the world trade in grain. Cargill, writes the Guardian, “recorded a 23% increase in revenues to a record $ 165 billion in one year”, considering the period between June 2021 and May 2022. Archer-Daniels-Midland “made profits. highest in its history during the second quarter of 2022. Bunge’s sales increased 17% year-on-year in the second quarter of this year. Louis Dreyfus “recorded earnings for 2021 up by more than 80% compared to the previous year”.
As often happens in these cases, experts are divided: the question is not so much whether accumulating profits on the skin of the population is ethical or not, but whether or not there was speculation behind these profits. John Rogers, an analyst at Moody’s, believes that there is no cartel among the big 4 cereals that is pushing prices up: “I don’t think they are behaving immorally, they are not intentionally raising prices.” The Guardian, however, cites an analysis by an NGO from which at least suspicious behavior would emerge.
According to Olivier De Schutter, co-chair of Ipes-Food (the international group of experts on sustainable food systems) and UN special rapporteur on extreme poverty and human rights, “the fact that the global commodity giants are making record profits when Hunger increases is clearly unfair, and it’s a terrible indictment of our food systems. What’s even worse, these companies could have done more to prevent the hunger crisis. “
“Global grain markets are even more concentrated than energy markets and even less transparent, so there is a huge risk of profit,” continued De Schutter. The UN special rapporteur argues that this year’s rise in food prices took place despite what is thought to be abundant global grain reserves, but the problem is that there is not enough transparency on the part of the four sisters. ” to show how much grain they hold and no way to force them to release stocks in a timely manner. ” That’s why according to De Schutter, “we have to look to the corn giants and ask ourselves what they could have done to avoid the crisis and what they could do now”.
For activists and NGOs, however, more than multinationals, governments should be doing something: for Sandra Martinsone, head of policies at Bond, a network of international development charities, a tax on unexpected profits is needed “to restore a balance in the food markets and help the poorest “. Large agri-food companies, she argues, “are clearly capitalizing on the reduction in supply and the increase in demand, further exacerbated by the trade in commodities,” she said. Oxfam has also asked for a tax on profits, and on the same line there are several politicians and even organizations in the sector, such as the UK’s Sustain.