As dominance over food markets shifts east towards countries like India and China, four to six companies influence the global market in key sectors, agricultural research and policy decisions, a new report by ETC group has found.

The Food Barons 2022 report, which has been released just weeks ahead of a high-level United Nations Committee meeting on World Food Security, said that large corporations have benefitted from the Covid-19 pandemic, climate change and war. It also highlighted the strategies agri-food giants are using to consolidate and expand their domination over food systems that could hurt small-scale operators in the sector with less financial, digital and technological strength.

“We have to remember that structural inequality and corporate concentration drive high food prices,” said Veronica Villa from ETC Group’s office in Mexico. “This report highlights the startling consolidation that has enabled profiteering around climate, conflict and Covid-19. It names the culprits who are fuelling growing hunger.”

The report is based on 2020 sales and an analysis of three annual reports of several companies.

Agrochemicals and farm sector

When it comes to agrochemicals such as seeds, pesticides, and fertilisers, China’s Syngenta Group, the world’s largest agrochemical firm, owns one-fourth of the global market share. Syngenta along with Germany’s Bayer and BASF Agricultural Solutions, and Corteva in the United States, have 62.3% of the global market share. Elenita (Neth) Daño, Asia director for Action Group on Erosion, Technology and Concentration (ETC Group), said their research shows that China is leading on all fronts. “In addition to being the world’s leading manu­facturer of off-patent and generic pesticides, the Chinese state owns a multinational ag input powerhouse (Syngenta) with R&D muscle and a global presence,” she said.

India’s UPL Limited, the world’s fifth-largest agrochemical firm, had a 7.9% of the global market share with $4,900 million (Rs 39,000 crore) sales in 2020. The report said that UPL Ltd derived 71% of its revenues in 2021 from generic pesticides.

In the commercial seed market, the ETC report stated, 10 companies controlled 40% of the global market about 25 years ago, while today only two firms have 40% of the market share.

In the farm equipment sector, which includes tractors, farming tools and machines used to spray chemicals, six companies account for nearly 50% of the market share globally. Deere & Company in the United States, Kubota in Japan, and CNH Industrial in the United Kingdom are the top three companies in this sector. They recorded sales of $47,381 million (Rs 3.7 lakh crore) in 2020.

India’s Mahindra and Mahindra is at sixth position globally and holds a 2% market share. Within India, Mahindra and Mahindra has more than 40% of the domestic farm equipment market. Its control over the market continues to grow, the report stated, with its June 2021 domestic sales rising 31% over the previous year.

Daño said India is attracting big tech players in agriculture. “Amazon and Facebook, for example have invested big stakes on Reliance/Jio – major tech players that have enormous potentials to establish all-encompassing control systems in agriculture, and shaping farmers’ decisions and consumer choices throughout the chain,” she added.

Digitalisation has helped large corporations grow

The report also found that digitisation of the food chain and technology have driven the market towards large corporations, which are investing heavily in the digital ecosystem to expand their base. Several companies are making use of drone technology, the report said. For instance, Bayer, Corteva AgriScience and BASF are collaborating with manufacturers to promote the use of drone-based agriculture. Mahindra and Mahindra is also set to launch similar trials to use drones for precision spraying in Telangana and Andhra Pradesh, The Print reported.

In the grocery sector, Walmart receives 30% of consumer spending across the world, the report said. Indian companies do not appear among the list of top 10 meat companies or in the global grocery retail sector. Small grocery stores continue to dominate the retail market. India has about 20 million grocery or kirana stores.

During the pandemic, several of these stores improvised and switched to online sales to ensure that their consumer base remains steady. However, large corporations, including e-commerce and tech companies, are keen to spread in this market. The report stated that Facebook invested $5.7 billion (Rs 45,000 crore) in Jio to create JioMart-Whatsapp interoperability. Google has also invested in the mobile application Dunzo, for last-mile grocery delivery.

“The grocery sector in India is seeing a race to consolidate the kirana stores into a single value chain (mostly by Amazon, Walmart, Reliance and now Tata) and as Jio wants, even the transactions should be done via Jio Money,” Daño said. She added that India’s retail market was pegged at $793 billion in sales in the fiscal year ended March 2020 and is expected to grow to nearly $1.5 trillion by 2030.

Food delivery apps, that provide delivery service of cooked food, have grown during the pandemic. Amongst the ten that hold a major market share are Indian companies Swiggy and Zomato.

But the sector faces losses and has been forced to eye the grocery retail sector. “Swiggy, one of India’s two dominant food delivery apps, (has) shifted its business focus away from prepared foods and towards grocery,” the report stated.