Fuel, feed and the corporate restructuring of the food regime

Abstract

The agrofuel boom has brought about some of the most significant transformations in the world food system in recent decades. A rich and diverse body of agrarian political economy research has emerged that elucidates the conflicts and redistributional shifts engendered by these transformations. However, less attention has been given to differences within agri-food capital. This paper contributes to the existing literature on agrofuels, by showing how one cluster of agri-food corporations and farmers within the US has benefited from soaring ethanol production at the expense of another cluster. More specifically, I delineate and chart the pecuniary trajectories of two corporate-led distributional coalitions that have vied over the course taken by the US ethanol sector: the ‘Agro-Trader nexus’ and the ‘Animal Processor nexus’. My main finding is that the US ethanol boom has been a vector of redistribution: increasing the earnings of the Agro-Trader nexus and corn growers while reducing the earnings of the Animal Processor nexus and livestock farmers. This finding points to the limits and contradictions of agrofuels capitalism and the acute tensions that exist at the heart of the corporate food regime.

Keywords:

• agrofuels
• food regimes
• redistribution
• Agro-Trader nexus
• industrial livestock

Acknowledgements

I would like to thank Jonathan Nitzan, Mark Peacock, Peter Gibbon and the two anonymous reviewers for their very helpful comments. I am also extremely grateful to Daniel Lech of the National Agricultural Library in Beltsville, Maryland, for granting me access to the invaluable archival material at the library during four research trips from 2012–2013. Thanks are also due to Eric George, Jeremy Green, Sandy Brian Hager and David Ravensbergen. Finally, I would like to acknowledge Ontario's Ministry of Training, Colleges and Universities for awarding me an Ontario Graduate Scholarship in support of my research. The usual disclaimers apply.

Notes

¹ADM continuously flirted with scandal in its search for benefactors. According to a deposition given by a former presidential secretary, Dwayne Andreas – then the Chief Executive Officer (CEO) of the company – personally delivered a package to President Nixon containing $100,000 in $100 bills in 1972. The cash was kept in a White House safe for around a year before being returned by Nixon when the Watergate scandal was beginning to engulf him (Carney 1995).

²This shift was emblematized by the appointment of Patricia Woertz – former vice-president of the oil giant Chevron – as the CEO of ADM in 2007.

³Indeed, on average, farmers spend up to US$15 per acre more on pesticides for corn production than they spend on soybean production, and almost US$40 per acre more on pesticides than what they spend for wheat production (Purdue Extension 2013). Furthermore, as soaring ethanol production encourages the abandonment of crop rotation in favor of growing corn on the same land year after year, the chances of pest infestation are heightened, and this, in turn, increases farmer dependency on the ‘biophysical overrides’ provided by the agri-biotech giants (Weis 2010).

⁴The growing corporate control over the lives of American domesticates has been particularly pronounced in the poultry sector. The largest poultry firm, Tyson Foods, commands a 60 percent market share of the US chicken breeding stock (Food Safety Magazine 2007).

⁵Author's own calculations. Meat prices and corn prices deflated by the consumer price index. Data from BLS (2014a,b,c).

⁶Cargill holds an ambiguous position in regard to the ‘feed versus fuel’ debate. On the one hand, it has played a significant role in supporting the ethanol sector, not only through developing hybrid corn and bioengineered corn for ethanol production, but also by opening up its own ethanol plants. Indeed, at the turn of the twenty-first century, it had the fifth largest share of control over the sector (Heffernan 1999). On the other hand, Cargill's more substantial interests in consumer food and animal feed markets have made the company reluctant to lend its full backing to ethanol production. This reluctance was evidenced in a statement by Cargill's CEO, Warren Staley, in which he advocated ‘a hierarchy of value for agricultural land use: food first, then feed and last fuel’ (cited in Milling and Baking News 2006, 11). By straddling the Agro-Trader nexus and the Animal Processor nexus and by adopting a comparatively equanimous position in the ‘feed versus fuel debate’, Cargill is the exception that proves the rule.

Additional information

Joseph Baines is a PhD candidate in the Department of Political Science at York University, Toronto. His research focuses on the global agricultural commodities traders and the restructuring of the world food system. He is also a registered volunteer at Toronto FoodShare.