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CTA. 2000. Merger mania!. Spore 86. CTA, Wageningen, The Netherlands.
Permanent link to cite or share this item: https://hdl.handle.net/10568/46718
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The past few months have seen a spate of major companies getting together across the globe. It really is wild out there in 'merger mania' land, with big organisations gobbling up small ones and giants climbing clumsily into the same bed. There are...
The past few months have seen a spate of major companies getting together across the globe. It really is wild out there in 'merger mania' land, with big organisations gobbling up small ones and giants climbing clumsily into the same bed. There are big implications for ACP agriculture and food security. If you were looking for proof that the world has gone crazy, you would simply need to look back to the last few months of the past century and the opening months of the new one. You would conclude that whilst some of humanity s follies regional wars and climate change induced by human activities to mention but two continue unabated and unchanged, respect for the traditional laws of the market place appears to have been absolutely forgotten. Energy prices have soared to levels unknown since the 1970s, pushing up the price of a bus journey from Yaoundé to Douala in Cameroon to over $7. In Europe, a young airline headed by a lad in blue jeans sells tickets that allow you to fly from England to Spain that s over five times the distance from Yaoundé to Douala for less than $20, and it claims this is profitable. In the Netherlands, in March 2000, a company selling services on the Internet announced annual losses of $10 million and was sold on the Amsterdam stock exchange for about $25 billion more than some ACP countries net worth. No wonder market analysts, and the man and woman on the street, are left shaking their heads in incomprehension. Driven by the need to maximise profits and obsessed with cost-cutting efficiency, companies worldwide are rushing to become the fittest of all, and to thus ensure their survival. The method many choose is the time-honoured practice of buying out suppliers and taking over competitors. It has happened in market places ever since traders first came together to barter and exchange. Nowadays, the language used by such companies hostile take-overs reflects the rough-and-tumble of such transactions, whereas other terms, such as strategic alliances and permanent partnerships , are less than economical with the truth in describing how big fish eat small fish. At first sight, it would seem that the dire predictions made in the heady 1960s, about the control of the world economy falling into the hands of a few transnational corporations, are now coming true. It is easy to make a simple calculation, particularly in the area of agriculture, to 'prove' this point of view. During part of the past decade, the US corporation Monsanto expanded its activities from its established base of chemical engineering into the Brave New World of genetic engineering, focused on seed manipulation. Where has this taken the company? It is an often told story: the company identified a smart way to lock farmers into a permanent relationship by ensuring that they had a need for their products. One ploy was to introduce the so-called terminator gene into improved seed varieties of essential crops. By halting the natural process whereby plants generate their own seeds, this gene would mean that growers would no longer be able to select and store seeds from one harvest for growing the next. The idea has not gone ahead, at least not yet. Opinions are divided about it, to put it mildly. The chair of the Monsanto board passionately believes that by ensuring the continued high quality of its seeds, his company would make a significant contribution to world food security, as well as to its long-term profit margins. Cynics say that the latter objective, seen as greed, far outweighs the moral objective, seen as self-interested protectionism. So it may seem, but people who sit in boardrooms have a mixed bag of motives for doing what they do: a wish for personal wealth, a feeling of responsibility to the workforce and the company s dependent communities, a similar responsibility to shareholders and customers, and a general social commitment to, for example, equitable and sustainable food production. Monitoring trends The dramatic implications of the Monsanto initiative were seized upon by such bodies as GRAIN in Barcelona, Spain, and the Rural Advancement Foundation International (RAFI) based in Manitoba, Canada. The mission of these non-governmental organisations is to promote and protect existing seed supply systems as part of the fabric of today s rural world, with special emphasis on countries of the South. They monitor trends that may endanger that equilibrium and they campaign against any undesirable developments. And campaign against the terminator gene they did, to such effect that Monsanto, not helped by some classic public relations blunders, announced towards the end of a turbulent 1999 that it was suspending its work on the programme. Mergers, conquests, value-added partnerships: what s in a name? Photo Corbis While the campaigners were prematurely celebrating their 'victory', Monsanto went ahead and continued a long-term strategy of mergers with related companies. The largest of its many steps along this road was to join forces with the American corporation Cargill, the largest seed distributor in North America, with activities worldwide. In January 2000, the Monsanto Corporation effectively disappeared from the map, by renaming its latest incarnation. Even if its work on the terminator gene continues to be suspended, the fact remains that much of the world s future seed supply and, equally awesome, of its research on new varieties is now concentrated in the hands of one transnational conglomerate. Similar trends are taking place in related fields of life science research: companies involved in the manufacture of agrochemicals, vaccines, and veterinary products and pharmaceutical companies like Ciba-Geigy, Rhône-Poulenc, Bayer, Hoechst have been moving in and out of mergers in the last few years, creating massive corporations with misty new names like Novartis and Aventis. The consequence of pooling programmes and patents again concentrates the knowledge of professional researchers with, some say, grave results for the future of Southern research, the ownership of indigenous knowledge, and the availability of scientific information. Their merging also tightens the links between research and the market place, with worrying forecasts that medical research priorities will be distorted. Some critics predict that research on new and resurgent strains of malaria will be dropped, since it is not as profitable as, for example, research on cosmetics based on plant materials from the rainforest. All along the food chain, mergers are concentrating power and profitability and are apparently eroding whatever flimsy influence the small farmer, trader, shipper, or processor ever had. In the field of finance, global mergers of banks are further marginalising ACP national banking services, enforcing attitudes of retrenchment and risk reduction not the sort of thinking that will encourage the innovative, and ultimately profitable, rural savings and credit schemes that are often essential to food security. Mergers and margins Perhaps the largest clouds on an already stormy horizon are in the allied fields of telecommunications and information. In Europe, North America and the Pacific Rim countries, transnational media corporations of unimaginable size are taking control of the means to exchange information, whether verbal, written or electronic, through mass media or between individuals. What, the everyday ACP agriculture professional may well ask, are the possibilities now for rural communication networks? How can the African Information Society (the jargon term for an Africa that participates fully on the global Internet and uses ICTs in all aspects of its economies and culture) flourish if it is primarily seen as a loss-making venture, with perhaps some market potential in five decades from now? And once the means to share are controlled by a few, and out of control of the many, will these few not start to dictate the content too? What will be the future for all our exciting networks of decentralised market information systems, women s banking programmes, alternative and fair trade, or specialised research? Merger mania is in the air, and not just in commercial enterprises. Non-governmental organisations in Europe are merging madly, as did the Dutch development co-funding agencies Bilance Cordaid. Environmental movements and trade unions, nationally and globally, have seen the values of pooling their work. National governments are slowly learning the benefits of partially merging, or at least sharing, their agendas. Regionalisation, whether in ACP or European terms, is also a form of merging. It might seem kind of funny, but merger mania may provide new opportunities for people who tend to think of themselves as being on the margin. Most mergers are in fact subject to the scrutiny and control of the stakeholders, in this case, the shareholders of transnational corporations (TNCs). Their accountability is often greater than that of many of the organisations that claim to operate in, and even to represent, civil society. Maybe the sincere partnerships developed by such TNCs in the food chain as Danone, Nestlé and Accor with suppliers and trade unions provide a model for moving forward, and away from a fear of mergers. Partnerships and openness there have to be. After the first wave of ACP independence there were several schools of thought that promoted self-reliance and autarchy, and 'de-linking' from the rest of the world. Globalisation, which barely allows such thinking today, may not be ours in the making, but surely it has to be ours in the taking.
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