This report by the Green European Journal argues concentration in the agricultural commodity market has allowed a handful of companies to maximise profits during a global food crisis. It suggests European regulators should step up their efforts to rein in harmful market dominance.
Publisher’s summary
Over the past decade, we have witnessed an extraordinary expansion of market concentration across most sectors of the economy. The top four companies in any given sector now hold a larger market share than 10 years ago. This sharp rise in market concentration is driving a broad range of harms, from negative impacts on consumers to corporate capture of regulators and small suppliers forced into debt or foreclosure. Despite these issues making headlines, public and policy attention to the structural nature of the market concentration problem remains limited. The food inflation crisis of recent years is a case in point.
In 2022, roughly one in ten people went to bed hungry, and the absolute number of people with hunger increased by 40 million. In the same year, the profits of the five biggest traders in agricultural commodities tripled compared to the average for the 2016-2020 period.
The “Big Five” dominate the global agricultural commodity market, collectively holding a monopoly for staples like grain, corn, soy, and sugar. The strategies through which they attained and now maintain their dominant position, including mergers and acquisitions, vertical integration, and joint ventures and investments, are likely what allowed them to increase their profit margins so dramatically during a global food crisis.
Reference
Gaughran, A. Çavuş, C. Kiezebrink (2024) How agriculture’s big 5 thrive in a food crisis. Green European Journal.
Read more here. See also the TABLE series on power in the food system
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