Cut out the middleman

Four traders, suppliers of raw materials supply 90% of food for humans and livestock: Cargill, ADM, Louis Dreyfus Commodities and Bunge. They supply cereals, cocoa, cotton, oil, eggs, flour, meat, peanuts, rubber, salt, wool, chemicals and vitamins. The biggest of these, CARGILL, is the largest private company in the United States and controls a quarter of our food.

Cargill: the company feeding the world by helping destroy the planet

Cargill, un méconnu aussi gros que Nestlé

Cargill, le géant invisible

Thanks to their monopoly position, these companies alone set purchase prices for producers and sales prices for distributors.

Marché des matières premières : principe et fonctionnement

Des mallettes de cash aux bobeurs jamaïcains, l’emprise des négociants racontée dans un livre

These companies also decide on agricultural strategies, since producers will only grow or raise what these companies buy in order to be able to trade their produce.

Commercialisation des produits agricoles

This model was promoted by the Nixon administration after the 1973 meat boycott. Farmers were demanding better prices for their produce, which they saw being sold at much higher prices in the shops. The Nixon administration and the European Union set standards that made it possible to reframe foodstuffs as commodities, i.e. to make them completely interchangeable. All products are mixed by type, so it is no longer possible to trace a batch of food from producer to consumer via the price chain. This model also enables producing countries to avoid any sanctions, as distributors do not know which country the products come from. For example, Russia can still finance its war effort against Ukraine because traders buy its agricultural products via subsidiaries where everything is mixed up in the stocks.

Agriculture and Consumer Protection Act of 1973:

Commodity traders take most of the margins on food and profit from crises. For example, between COVID and the war in Ukraine, their profits increased by 45%. Since 2020, the Cargill family has had four more billionaires. By making these margins, these companies are largely contributing to inflation.

Les profits astronomiques des négociants de matières premières:

Profits en temps de crise:

Non aux négociants en matières premières! Non à la conférence internationale annuelle de la Commodity Trading Association (LCTA) les 23 et 24 juin à Lugano:

Since 2009, the Swiss Financial Stability Board and Canada’s central bank have suspected traders of using hidden stocks to make the commodity artificially scarce and drive up prices.

La finance non réglementée et le négoce international des matières premières:

La Suisse veut plus de transparence sur le négoce de matières premières:

La spéculation fait dérailler les échanges de grains et de métaux:

There was an attempt at negotiation between the G20 members and the traders in 2011 because the governments wanted to introduce price control mechanisms. The traders threatened to cut purchase prices to farmers by 30% and increase sales prices by the same amount. The governments backed down. This is a form of imperialism, because these multinationals dictate their will to states that should be sovereign. For example, in exchange for lower food prices, these intermediaries demanded that the head of the US central bank increase the unemployment rate so that they could keep wages low and increase their profits.

Prices at the supermarket keep rising. So do corporate profits.
Is it really inflation? Or something else?

Les spéculateurs de la faim:

More People Must Lose Jobs to Fight Inflation, Larry Summers Bravely States From Tropical Beach:

In times of inflation, these intermediaries are the biggest culprits in people’s difficulties to feed themselves, because they make excessive profits and only buy standardised products that are poorly adapted to local ecosystems. They are too big and too powerful.

Their place in the economy is justified by two ideas that must be fought: the neo-liberal idea that the state is a bad manager and the idea that the raw materials they buy are perfectly interchangeable.

The fact that the state is a bad manager is a fantasy, there is no proof. There is the promise that these intermediaries will do better than the state. The system of having a state that manages public granaries makes it possible to introduce a new buyer who pays a fair price to producers and sells at a fair price to distributors. This would enable producers and distributors to escape the excessive margins of traders. Only the State can introduce price controls so that it is forbidden to sell for less than the public granary price.

On the other hand, people need to be educated about the fact that plant and animal varieties have different tastes and qualities from one place to another. This is an opportunity to cook a dish using the appropriate varieties. The public granary may decide to specifically buy varieties adapted to the local ecology to limit the use of fertilisers and pesticides. The producer chooses what the granary buys. The consumer wins.

These traders are so big that it’s hard to escape their threats. The same is true of pharmaceutical companies. We need to expropriate the oligarchs. Existing structures must be nationalised.

The Omnivore’s Dilemma, Michael Pollan:

Neither Nestlé nor Shell: This Is the Worst Company in the World:

This situation is very similar to that in Rome at the end of the Republic, when the great patrician families held a monopoly on the wholesale grain trade. They speculated on prices. They threatened to raise prices if the Senate didn’t do what they wanted. The agrarian reform proposed by Tiberius and Gaius Gracchus proposed the creation of public granaries and the State as a protagonist proposing fair prices. This law also proposed limiting the maximum size of wealth and land owned by a family. The patrician families paid a mob to stone the Tiberius brothers to death and throw their bodies into the river in 132 BC. A hundred years later, the first emperor Augustus reinstated this law, and 400 years of peace and prosperity followed.

Lex Sempronia: