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close this bookBiotechnology and the Future of World Agriculture (GRAIN, 1991)
close this folderTransforming the output
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View the documentThe circle of sugar
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View the documentInterchanging products, markets and producers

Interchanging products, markets and producers

The restructuring of the markets for sugar, cocoa and vegetable oils as described above are just a few examples of how biotechnology will affect the Third World as agricultural commodity exporters. There are many more. Vanilla, a crop on which some 70,000 small farmers in Madagascar depend, is another candidate for substitution by cell cultures in fermentation tanks. So are a whole series of other high-value plant-derived flavourings now produced by Third World farmers. Sudanese farmers selling gum arabic produced by Acacia trees face substitution of this highly valuable export commodity by starch-based counterparts. Kenyan farmers might lose their income obtained from the production of natural plant-derived pyrethrum -a widely used insecticide - as biotechnologists perfect cell culture and enzyme technology to produce the same substance in the factory. (76) Researchers from India put the total amount that Third World farmers will lose because of these substitution processes for five groups of crops at some $10 billion in the medium term. (77) For all crops, losses might come close to $20 billion, which is more than a quarter of the value of all agricultural commodities that the Third World is currently exporting.

But the implications of biotechnology go far beyond the crop by crop substitution efforts currently being carried out. The new technologies increase the interchangeability of the raw materials used for the end products. We have already seen how biotechnologically modified products from different plants can result in more or less the same end product. A product such as HFCS, which is already competing with sugar, is not only derived from maize, but in principle also from wheat, potatoes, manioc and other crops. A similar scenario looms for protein production. The production of protein for cattle feed on the base of soybeans is already being threatened by the so called Single Cell Protein (SCP) production. SCP technology simply sets modified micro-organisms to work to make proteins in huge fermentation tanks. Scientists still have difficulties in making the process commercially viable, but Hoechst, ICI and the Soviet Union are currently investing huge amounts of money in the further development of this process. The USSR claims it will be self-sufficient in cattle feed in 1990, this would restructure the entire world protein market. But also fish-meal exports from developing countries, and tapioca production in Thailand are in danger of being replaced. The EEC imposed a reduction on Thailand's tapioca exports for cattle feed to Europe. Because of the risk of a '"rain war' with the USA, the EEC is reluctant to impose restrictions on imports of maize derivatives from the USA, yet it finds it easy to do so with a developing country like Thailand that has no bargaining power at all.

Using biotechnology, all these different sources of protein, starch and oil are increasingly becoming interchangeable. Biotechnology makes food production more and more like an assembly industry. Crops as such are no longer agricultural commodities, but their molecular components increasingly are. Rather than a global market for soybeans, palm-oil or cocoa, one has to start thinking of global markets for starch, proteins, oils and fats. The fishermen in Peru, the soybean producers in Brazil and the factories of ICI and Hoechst are now competing for the same protein market. Similarly sugar-cane workers in Cuba, potato producers in the Netherlands, maize producers everywhere, and the synthetic sweetener factories in the North, are all vying for the same sweetener market.

Interchangeability of products also means interchangeability of producers. Users of the raw materials can choose from a plethora of sources, depending on world market prices, domestic technological progress and political stability in the region from which the commodity is obtained. Overall, this results in a further decrease in world market prices for agricultural raw materials and in a weakening of the position of the suppliers of raw materials, often the developing countries.

One of the consequences of this chain of events is the virtual collapse of international agreements on agricultural commodities. While such agreements have always been difficult to reach, not least because of the different interests and stages of development within the Third World bloc, biotechnology now threatens to render a bad situation worse. The new technologies make it impossible to predict what will happen on the world market, and price guarantees to the Third World are untenable in this context. Different developing countries take different positions depending on the extent to which they can make use of the new technologies, resulting in a further deterioration of the Third World as a negotiating bloc.

Many public interest groups have rightly criticized over-reliance on export crops, such as those mentioned above, at the expense of food production, and opposed the export-led strategies promoted by the World Bank and IMF aimed at raising cash for debt repayments. The disastrous impact that emphasis on export crops in developing countries has on national and local food production and supply is widely known. The same is true for the horrendous work and living conditions endured by countless plantation labourers. Third World governments need to promote development strategies that lead towards increased food security. The sudden disappearance of entire export markets due to technological advances elsewhere in the world is not in the interest of the Third World or its people; it merely adds to their already immense problems.

Rapid product displacement from one region to another has always affected the poor at the very beginning of the production chain: the small farmers and the landless wage workers. The disastrous situation for the labourers employed in indigo production in Asia, after indigo was replaced by aniline dyes from Germany at the end of the 19th century, is one example of how product displacement affected the poor. The tremendous recession in whole regions of South America after rubber production was first transferred to Asia, and later shifted to synthetic rubber produced in the North, is another.

There is no indication that product displacements caused by biotechnology will have a less dramatic impact. Actually, the sugar crisis - in which the new biotechnologies played an important role - is already an example of the opposite. As quoted at the beginning of this chapter, the European Commission predicts disaster for developing countries, and OECD experts tend to agree. Serious thoughts on how to avoid such a tragedy are, however, difficult to find in the official circles. Preoccupied by a determination to stay ahead in the biotech race, industrialized countries advocate policies that will further eliminate the need for imports from the South, regardless of the implications for the poor and resourceless.

Notes and references

1. Commission of the European Communities, Document COM(86) 550 final/2,1986. Quoted in FAO, 'Implications of New Biotechnologies for the International Undertaking', CPGR/89/9, Rome, January 1989, p.8.

2. OECD, Biotechnology: Economic and Wider lmpacts, OECD, Paris, 1989, p.81.

3. FAO, Trade Yearbook 1987, FAO, Rome, 1988.

4. Belinda Coote, The Hunger Crop, Oxfam, London, 1987, pp.20-3.

5. Ibid., p.47.
6. Ibid., p.66.

7. FAO, Commodity Review and Outlook, 1987-88,FAO,Rome,1988,p.25. See also Belinda Coote, 1987, op. cit., p.30.

8. Quoted in F. Clairmore, J. Cavanagh, Merchants of Drinks, Third World Network, Penang, 1988, p.167.

9. FAO, Trade Yearbook 1988, op. cit.

10. Belinda Coote, 1987, op. cit., p.65.

11. FAO, Commodity Review and Outlook 1987-88, op. cit.,p.24.

12. Belinda Coote, 1987, op. cit., pp.60-2.

13. R. G. Lewis,'TheSourTaste of Sugar', in Ceres, No.118, FAO, Rome. 1978 and 1985 figures from Biotechnology Revalution and the Third World, RIS, New Delhi, 1988, p.209.

14. FAO, Trade Yearbook 1987, op. cit.; and Bijlman et al., The International Dimension of Biotechnology in Agriculture, University of Amsterdam, April 1986, p.46.

15. Quoted in Clairmore and Cavanagh, 1988, op. cit., p.168.

16. Belinda Coote, 1987, op. cit., p.14.

17. OECD, 1989, op. cit.,p.86.

18. Hanne Svarstad, Biotechnology and the International Division of Labour, University of Oslo, December 1988, p. l 27.

19. OECD, 1989, op. cit., p.87.

20. A. Sasson, Biotechnologies and Development, UNESCO, Paris, 1988, p.274.

21. Belinda Coote, 1987, op. cit., p.73.

22. OECD, 1989, op. cit., p.87.

23. Ibid.,p.86.

24. See, for example, RAFI Communique, 'Biotechnology and Natural Sweetners: Thaumatin', RAFI, Pittsboro, February 1987, for an excellent overview of research on thaumatin.

25. Tate & Lyle estimate. In Derwent Biotechnology Abstracts, Derwent Publications Limited,1987,EntryNo.87-13068.

26. Sasson, 1987, op. cit., p.270.

27. RAFI Communique. February 1987, op. cit. Price estimate from A. Sasson, 1988, op. cit.

28. Sasson, 1988, op. cit.,p.270.

29. Ibid.

30. Derwent, 1987, op. cit., Entry No.87-13068.

31. Rein Dekker, 'Multinationals en de Internationale herstrukturering van de cacaosektor', in Marquetalia, No.6, de Uitbuyt, Wageningen, 1983.
32. Ibid.

33. FAO, FAO Agricultural Commodity Projections to 1990,Rome,1986,p.123.

34. FAO, Production Yearbook 1987, Rome, 1988.

35. FAO, 1986, op. cit.; and FAO, Commodity Review and Outlook 1987-1988, Rome, 1988.

36. Transnational Information Exchange (TIE), 'Cocoa Processing and Chocolate Production' Conference report, TIE, Amsterdam 1988, pp.3-4.

37. FAO, Commodity Review and Outlook, 1988,op.cit.,p.29.

38 .'Bitter Times for Cocoa Growers', in Business Week, 4 April 1988, p.37; and TIE, 1988, op. cit.

39. FAO, 1986, op. cit.

40. TIE, 1988, op. cit., p.9.

41. In Africa Research Bulletin, Africa Research Limited, Vol.26, 30 June 1989, p.9583.

42. 'Bitter Times for Cocoa Growers', op. cit.

43. Africa Research Bulletin, Vol. 25,30April 1988,p.9082.

44. Africa Research Bulletin, Vol. 26,30 June 1989, p.9583.

45. 'K. Guthrie To Continue Diversifying Crop Mix', in Business Times, 12 April 1988.

46. RAFI, 'Cacao & Biotechnology: A Report on Work in Progress', RAFI Communique, Pittsboro, May 1987, p.3.

47. European Patent Office, Application No.88106774.8, 27 April 1988.

48. Dekker, 1983, op. cit. Calculation based on UNCTAD data.

49. Quoted in Hanne Svarstad, 1988, op. cit., p.169.

50. Ibid.,p.173.

51. Derwent Biotechnology Abstracts, Derwent Publications Limited, 1989, Entry No. 07054.

52. Hanne Svarstad, 1988, op. cit., p.180.

53. Derwent, 1989, op. cit., Entry Nos.89-02092 and 89-02093.

54. RAFl Communique, 1987, op. cit.

55. Derwent, 1989, op. cit., Entry No.89-05195.

56. Hanna Svarstad, 1988, op. cit., p.186.

57. FAO, Agricultural Commodity Projections to 1990, 1986, op. cit.

58. FAO, Trade Yearbook 1987, op. cit., figures for 1987.

59. FAO, Agricultural Commodity Projections to 1990, op. cit., (1990 figures is a FAO projection).

60. 'Biotechnologies des Corps Gras', in Biofutur, February 1986, p.20.

61. 'Biotechnology and Vegetable Oils Focus on Oil Palm,'RAFl Communique, June 1988, Pittsboro.

62. Sasson, 1988, op. cit., pp. 25-31,319-22.

63. Ibid., p.28.

64. RAFl Communique, June 1988, op. cit., Figure cited is œ Sterling 17.5 million.

65. 'Sex Problem in the Plantations', in South Magazine, London, January 1987.

66. Sondahl et al., in ATAS Bulletin, UNCSTD, Vol. l, No.1, New York, 1984.

67. In Far Eastern Economic Review, 8 October 1987, p.91.

68. FAO, Production Yearbook 1987, op. cit.

69. RAFI Communique, June 1988, op. cit.

70. Bijlman, v/d Doel, Junne, 'The Impact of Biotechnology on Living and Working Conditions in Western Europe and the Third World'. University of Amsterdam, Amsterdam, April 1986(Doc. No.85-1.3.5-3030-16).

71. Ibid.

72. Quotes from In Search of Progress: Science, Technology and Unilever, Unilever, Weert, The Netherlands, 1985,, pp.25,28.

73. Chemical & Engineering News, 29 April 1985.

74. Interview with Geoffrey Allen of Unilever, in Biofutur, Paris, January 1988, pp.20-2.

75. 'Biotechnologies des Corps Gras', inBiofutur, Paris, February 1986, p.26.

76. For case studies on these examples, see C. Fowler et al., 'The Laws of Life', in Development Dialogue, Dag Hammarskjold Foundation, 1988, nr.1-2.

77. V. R. Panchamukhi, N. Kumar, 'Impact on Commodity Exports', in Biotechnology Revolution and the Third World, RIS, New Delhi, 1988, p.218.