Towards a geography of agribusiness

by Iain Wallace

T h e t e r m 'agribusiness' was c o i n e d a n d formally defined 3 0 years ago. Its subse­

q u e n t u s e , h o w e v e r , has revealed considerable c o n c e p t u a l fuzziness, e x a c e r b a t e d b y
t h e w o r d ' s appeal t o polemicists of t h e left and t h e right. D i s c o m f o r t w i t h t h e
substance or semantics of t h e t e r m m a y p a r t l y explain t h e o t h e r w i s e surprising
academic neglect of t h e p h e n o m e n a w i t h w h i c h it is associated; b u t c o n c e p t u a l
clarification and a m a p p i n g of t h e research agenda in this field are long o v e r d u e .
This review m a k e s an initial a t t e m p t t o achieve these goals. It d r a w s o n p u b l i c a t i o n s
w h i c h have a p p e a r e d since 1 9 7 0 , including F r e n c h studies w h i c h have lacked
a t t e n t i o n in t h e English-language literature. It will b e c o m e a p p a r e n t t h a t t h e
writings of geographers d o n o t figure p r o m i n e n t l y in t h e b i b h o g r a p h y , b u t there
are m a n y t h e o r e t i c a l and empirical characteristics of agribusiness w h i c h s h o u l d
stimulate future geographical research.

I The concept of agribusiness

In t h e first substantial p u b l i c a t i o n t o p r o m o t e ( a w o r d used advisedly) t h e c o n c e p t ,

Davis and G o l d b e r g ( 1 9 5 7 , 3 ) , of t h e G r a d u a t e S c h o o l of Business A d m i n i s t r a t i o n ,
Harvard University, defined agribusiness as:

the sum total of all operations involved in the manufacture and distribution of farm
supplies; production operations on the farm; storage; processing and distribution of farm
commodities and items made from them.

Their rationale for t h e neologism w a s t h e rapidly changing face of m u c h of w e s t e r n ,

especially N o r t h A m e r i c a n , agriculture in t h e d e c a d e s following t h e s e c o n d w o r l d
w a r . F a r m i n g , or ' t h e agricultural sector', w a s b e c o m i n g t r a n s f o r m e d i n t o a c o m ­
p o n e n t (albeit t h e largest o n e ) o f an e m b r y o n i c system w h i c h increasingly l i n k e d
farm o p e r a t i o n s w i t h u p s t r e a m a n d d o w n s t r e a m m a n u f a c t u r e r s and d i s t r i b u t o r s . In
m a n y r e s p e c t s , these p o s t w a r d e v e l o p m e n t s a n d their c o n s e q u e n c i e s m e r i t t h e title
of t h e 'agricultural r e v o l u t i o n ' m o r e t h a n t h e events of t h e e i g h t e e n t h c e n t u r y
(Grigg, 1 9 8 4 ) . T h e role of p u r c h a s e d (off-farm) i n p u t s h a d b e e n very small in pre-
industrial agriculture a n d , despite significant advances in m e c h a n i z a t i o n a n d t h e
492 Towards a geography of agribusiness

i n t r o d u c t i o n of artificial fertilizers d u r i n g t h e n i n e t e e n t h c e n t u r y , it remained

m o d e s t u p t o 1 9 4 0 (Grigg, 1 9 8 2 ) . F o l l o w i n g t h e s e c o n d w o r l d war, however,
d r a m a t i c increases in fertilizer a p p l i c a t i o n , t h e use of t r a c t o r s a n d ancillary equip­
m e n t , a n d t h e a d o p t i o n of p u r c h a s e d i n p u t s b y livestock enterprises, were b o t h
cause a n d effect of widespread agricultural p r o s p e r i t y . T h e integration of farm
p r o d u c t i o n w i t h o t h e r sectors o f t h e e c o n o m y b e c a m e equally p r o n o u n c e d in a
d o w n s t r e a m d i r e c t i o n . A n increasingly u r b a n i z e d and affluent p o p u l a t i o n , with
rising levels of female p a r t i c i p a t i o n in t h e l a b o u r force, c r e a t e d an e c o n o m i c and
social e n v i r o n m e n t w h i c h e n c o u r a g e d substantial changes in t h e f o o d processing
a n d retailing industries ( B u r n s , 1 9 8 3 ) . I n n o v a t i o n s such as frozen f o o d s , super­
m a r k e t s , and television advertising p r o m o t e d t h e proliferation of m a n u f a c t u r e d
(i.e. substantially t r a n s f o r m e d ) foodstuffs at t h e same t i m e t h a t t h e y t e n d e d t o
accelerate t r e n d s t o w a r d s c o φ o r a t e c o n c e n t r a t i o n in these sectors. W h a t was needed,
in t h e view of Davis a n d G o l d b e r g , w a s t h a t managers of enterprises involved in
agribusiness s h o u l d d e v e l o p a clear awareness of t h e t o t a l p r o d u c t i o n system in
w h i c h t h e y are p a r t i c i p a n t s a n d shape their decisions strategically in this c o n t e x t .
Initially, t h e n , 'agribusiness' d e n o t e s a s y s t e m , r a t h e r t h a n an i n s t i t u t i o n . Davis
a n d G o l d b e r g ' s d e f i n i t i o n has t h e formal a p p e a r a n c e of deriving from an i n p u t -
o u t p u t analysis of t h e t r a n s a c t i o n s e n t e r e d i n t o b y p r i m a r y agricultural p r o d u c e r s .
A n y ( a n d every) sector w h i c h intersects as a b u y e r or seller w i t h 'agriculture'
b e c o m e s ipso facto an e l e m e n t in t h e agribusiness system or c o m p l e x . In this
r e s p e c t , 'agribusiness' largely c o r r e s p o n d s t o t h e F r e n c h t e r m les industries agro-
alimentaires ( t h e agri-food industries) w h i c h b e c a m e increasingly used b y t h e late
1 9 6 0 s (Mallassis, 1 9 7 3 ) . Malassis ( 1 9 7 5 ) argues t h a t this functional grouping com­
prises: agricultural p r o d u c e r s , t h e processing a n d m a n u f a c t u r i n g industries de­
p e n d e n t o n agricultural i n p u t s , d i s t r i b u t o r s of agricultural a n d f o o d p r o d u c t s , and
c o m m e r c i a l eating e s t a b l i s h m e n t s . He e x c l u d e s h o u s e h o l d s (while acknowledging
t h a t t h e y form a substantial final link in t h e c h a i n ) a n d also, m o r e d i s p u t a b l y , farm
i n p u t suppliers, o n t h e g r o u n d s t h a t their major line of business is n o t c o n c e r n e d
w i t h agri-food p r o d u c t s . T h e same could be said of p a r t s of o t h e r sectors included
a b o v e , a n d t h e fact t h a t fertilizer a n d t r a c t o r sales, for i n s t a n c e , m a y c o n s t i t u t e
o n l y a small p r o p o r t i o n of t h e activity o f t h e leading m u l t i n a t i o n a l firms in t h e oil
a n d a u t o industries d o e s n o t alter t h e fact t h a t these are d o m i n a n t suppliers o f basic
i n p u t s t o t h e agricultural sector.
Despite t h e a p p a r e n t equivalence of 'agribusiness' and les industries agro-alimen-
taires, t h e r e is a s e m a n t i c difference, w h i c h p o i n t s t o w h y Davis a n d G o l d b e r g ' s
definition h a s proved u n s t a b l e in u s e . T h a t t h e F r e n c h phrase carries few ideo­
logical o v e r t o n e s , w h e r e a s 'agribusiness' is, despite G o l d b e r g ' s p r o t e s t a t i o n s (see
b e l o w ) , u n d e n i a b l y ' l o a d e d ' , m a y be a t t r i b u t e d p a r t l y t o differences in t h e insti­
t u t i o n a l research c o n t e x t in w h i c h t h e t e r m s gained c u r r e n c y and p a r t l y t o sub­
stantial differences, at least until c o m p a r a t i v e l y r e c e n t l y , b e t w e e n t h e s t r u c t u r e of
t h e F r e n c h and t h e N o r t h A m e r i c a n agri-food sectors. T h e agribusiness research
o f t h e Harvard Business S c h o o l a n d t h e w o r k of t h e closely associated Agribusiness
C o u n c i l ( d e d i c a t e d t o 'bringing t h e resources a n d capabilities of agribusiness firms
 Iain Wallace 493

t o bear o n e c o n o m i c d e v e l o p m e n t ' ) has u n a s h a m e d l y evangehstic t h r u s t ( H e i n z ,

1 9 7 4 , v). In a w o r l d of still p r e c a r i o u s f o o d s u p p l y , t h e fact t h a t , especially in
'developing c o u n t r i e s , agricultural p o t e n t i a l is being w a s t e d because of an inability
t o b r i n g m o r e m o d e r n t e c h n o l o g y and m a n a g e m e n t t o bear o n the p r o b l e m s ' of
the agri-food sector is t a k e n as m a n d a t e e n o u g h . A major focus of t h e 'Harvard
S c h o o l ' of agribusiness research, w i t h satellite i n s t i t u t i o n s in c e n t r a l A m e r i c a a n d
t h e Philippines, is therefore t h e provision of r e s o u r c e materials for training agri­
business managers (e.g. D r i l o n , 1 9 7 1 ; A u s t i n , 1 9 7 4 ; G o l d b e r g , 1 9 7 4 . F o r a c r i t i q u e
see F e d e r , 1 9 7 8 ) . In c o n t r a s t , research in t h e n o t a b l y less e n t r e p r e n e u r i a l a t m o s ­
p h e r e of F r e n c h university a n d p a r a g o v e r n m e n t a l research i n s t i t u t e s h a s t a k e n t h e
f o r m , primarily, of positive analyses of t h e s t r u c t u r e and e v o l u t i o n of t h e agri-
food sector a n d its d o m i n a n t c o r p o r a t i o n s . T h e U n i t e d N a t i o n s C e n t r e o n
T r a n s n a t i o n a l C o r p o r a t i o n s has d r a w n heavily o n this s t r e a m o f d o c u m e n t a t i o n
a n d analysis ( H e n r y , 1 9 6 9 ; R a s t o i n , 1 9 7 3 ; B é n e t i é r e , 1 9 7 6 ; U N I D O , 1 9 7 7 ) in
its survey o f c o r p o r a t i o n s in f o o d a n d beverage processing ( U N C T C , 1 9 8 1 ) .
T h e fact t h a t m a r k e t p o w e r w i t h i n t h e F r e n c h agri-food s y s t e m has b e e n sub­
stantially m o r e diffused t h a n w i t h i n its US o r British c o u n t e r p a r t s has n o
d o u b t c o n t r i b u t e d t o t h e m o r e dispassionate t o n e o f m u c h o f t h e F r e n c h liter­
ature.
If 'agribusiness' were n o m o r e t h a n a generic d e s c r i p t i o n o f t h e e n s e m b l e ( s y s t e m )
of activities d e p e n d e n t o n agricultural p r o d u c e r s as m a r k e t s o r u l t i m a t e sources o f
s u p p l y , w e might legitimately b e critical o f its overinclusiveness, b u t t h e w o r d
w o u l d h a r d l y have a c q u i r e d ideological o v e r t o n e s . I n d e e d , as a corrective t o t h e
misleadingly small c o n t r i b u t i o n t o aggregate e m p l o y m e n t a n d value-added w h i c h
t h e agricultural sector, n a r r o w l y defined, a p p e a r s t o m a k e in c o n t e m p o r a r y in­
dustrialized societies, t h e c o n c e p t h a s c o n s i d e r a b l e value. I n t h e U n i t e d K i n g d o m , for
i n s t a n c e , food processing a n d food d i s t r i b u t i o n e a c h c o n t r i b u t e a p p r o x i m a t e l y t h e
same a m o u n t ( 2 . 5 p e r c e n t ) t o G D P as d o e s farm p r o d u c t i o n itself ( B u m s , 1 9 8 3 ) .
In the U n i t e d S t a t e s , Hadwiger a n d T a l b o t ( 1 9 7 9 ) s h o w t h a t n e t farm receipts in
1 9 7 3 were only n i n e per c e n t of t h e value of o u t p u t of t h e agribusiness s y s t e m
overall; a n d A p p l e t o n ( 1 9 7 3 ) has d e m o n s t r a t e d t h e sizeable e x t e n t of t h e multi­
plier associated w i t h C a n a d i a n farm p r o d u c t i o n . T h e p r o b l e m w i t h 'agribusiness'
is n o t t h e validity of t h e c o n c e p t ; it is, as G r e g o r y ( 1 9 8 0 ) h a s convincingly d e m o n ­
s t r a t e d , t h a t t h e language of s y s t e m s t h e o r y m a s k s ' t h e i d e o l o g y of c o n t r o l ' .
A u s t i n ' s succinct p o r t r a y a l of agribusiness as 'a s e e d - t o - c o n s u m e r s y s t e m ' ( A u s t i n ,
1 9 7 4 , 1; cf. N e w b y , 1 9 8 2 , 1 4 6 ) a n d his f o r t h r i g h t a c k n o w l e d g e m e n t t h a t t h e
'Harvard S c h o o l ' a p p r o a c h 'focuses o n t h e o n e f u n c t i o n t h a t c u t s across t h e entire
system and ties it all t o g e t h e r : m a n a g e m e n t ' ( p . 3 ) characteristically d o e s n o t
e x t e n d t o an equally explicit analysis of who m a n a g e s t h e s y s t e m , t o w h a t e n d s ,
and w i t h w h a t effects. T h e p o s t w a r e v o l u t i o n of agribusiness h a s b e e n p r o m o t e d
b y t h e p o h c i e s and a c t i o n s of s o m e , b u t certainly n o t all, of t h e p a r t i c i p a n t s in t h e
system. B o t h t h e e t h o s a n d t h e c o n s e q u e n c e s of t r a n s f o r m m g agri-food p r o d u c t i o n
b y t h e pervasive p e n e t r a t i o n of t h e t e c h n o l o g i c a l a n d m a r k e t r a t i o n a l i t y of con­
t e m p o r a r y capitalism have b e e n resisted b y large n u m b e r s of t h o s e c a u g h t u p in
494 Towards a geography of agribusiness

t h e changes. It w a s therefore either naive or disingenuous of G o l d b e r g ( 1 9 7 7 ,

1 7 4 - 7 5 ) t o a t t e m p t t o deflect critiques of agribusiness b y claiming t h a t t h e word

is a non-political, non-partisan, descriptive term that attempts to describe the interrelated

nature of the domestic and global food system. It includes small and large farmers, small
and large food distributors, rich and pooi consumers [which is where you and I legitimize
the system]. It is not an attempt to pit one segment of society against another.

All farmers are c a u g h t u p in t h e agribusiness s y s t e m , b u t its d y n a m i c s t e n d t o

polarize t h e farming c o m m u n i t y . This is a major t h e m e of the only substantial
s t u d y of agribusiness w h i c h has so far b e e n w r i t t e n b y a geographer (Vogeler,
1 9 8 1 ) . Whereas ' m e d i u m - a n d small-scale p r o d u c e r s are m o r e victims t h a n bene­
ficiaries of agribusiness i n s t i t u t i o n s ' , t h e i n t e r e s t s of profitable large-scale farmers
generally coincide w i t h t h o s e of t h e non-farm c o r p o r a t i o n s , t o t h e e x t e n t t h a t
large farms can be c h a r a c t e r i z e d as ' t h e p r o d u c t i o n side of agribusiness' (Vogeler,
1 9 8 1 , 1 0 6 , 1 0 ) . T h e r e is s o m e a m b i g u i t y in Vogeler's use of t h e t e r m , for he also
claims t h a t 'agribusiness m a n i p u l a t e s all farmers, regardless of size and t y p e ' ( p . 10).
His reference t o t h e c o n t r a s t i n g c u l t u r e s of agrarian capitalism a n d agrarian d e m o ­
cracy in t h e U n i t e d S t a t e s , h o w e v e r , clarifies t h e degree t o w h i c h t h e emergence
of t h e agribusiness s y s t e m h a s b e e n congenial t o t h e o u t l o o k of one set of farmers
( w h e t h e r or n o t it is u l t i m a t e l y t o their a d v a n t a g e ) a n d resisted b y o t h e r s . N e w b y
( 1 9 7 9 ) p o i n t s t o similar n u a n c e s w i t h i n British agriculture. In b o t h c o u n t r i e s , t h e
social i m p a c t in rural areas h a s , of c o u r s e , b e e n heavily m o d i f i e d b y g o v e r n m e n t
intervention.
In s u m m a r y , t h e t r a n s f o r m a t i o n of t h e agricultural e c o n o m y i n t o a n agribusiness
p r o d u c t i o n s y s t e m h a s b e e n b r o u g h t a b o u t b y , or a t least b e e n associated w i t h , t h e
g r o w t h of specific i n s t i t u t i o n a l foci of p o w e r w h i c h exercise varying degrees o f con­
t r o l over s u b o r d i n a t e e l e m e n t s of t h e s y s t e m . In t h e Soviet U n i o n and Eastern
E u r o p e t h e typical focus is the agro-industrial c o m p l e x ( H a m i l t o n and Linge,
1 9 7 9 , 1 0 , s u m m a r i z i n g W a d e k i n , 1 9 7 7 ) : in t h e w e s t e r n w o r l d t h e d o m i n a n t institu­
t i o n is t h e large, p r e d o m i n a n t l y t r a n s n a t i o n a l , c o r p o r a t i o n involved at o n e or m o r e
strategic stages of t h e agri-food p r o d u c t i o n process. U n d e r s t a n d a b l y , if unhelpfully,
t h e s e c o r p o r a t i o n s are f r e q u e n t l y referred t o as 'agribusiness(es)', h e n c e t h e ambig­
u i t y over w h e t h e r t h e t e r m d e n o t e s a s y s t e m o r an i n s t i t u t i o n ( s y s t e m e l e m e n t ) .
M o r e o v e r , u n t i l r e c e n t l y , t h e w o r d h a s b e e n used m o s t f r e q u e n t l y either b y 'Harvard
S c h o o l ' p r o t a g o n i s t s of agribusiness or b y critics for w h o m it is s y n o n y m o u s w i t h
The famine business ( T u d g e , 1 9 7 9 ) , Strawberry imperialism (Feder, 1977), the
secretive a n d p o w e r f u l Merchants of grain ( M o r g a n , 1 9 8 0 ) , or the c o r p o r a t i o n s
responsible for How the other half dies ( G e o r g e , 1 9 7 6 ) . With this critical c o n n o t a ­
t i o n , 'L'agrobusiness' ( G a r r e a u , 1 9 7 7 ) has e n t e r e d t h e F r e n c h l i t e r a t u r e . T o con­
fine t h e t e r m 'agribusiness' t o institutions, as distinct from t h e 'agri-food' system,
w o u l d serve t h e i n t e r e s t s o f clarity b u t fly in t h e face of established usage and
stylistic c o n v e n i e n c e . It is desirable t h a t those w h o c o n t i n u e t o w r i t e a b o u t 'agri­
business' give it a c o n t e x t u a l d e f i n i t i o n : it is even m o r e so t h a t t h e y should p r o b e
f u r t h e r t h e processes of e c o n o m i c a n d social change w h i c h have given it c u r r e n c y .
 Iain Wallace 495

II Agribusiness and geography

T h e e v o l u t i o n of farming i n t o an e l e m e n t of t h e agri-food industrial s y s t e m w o u l d

a p p e a r , at first glance, t o provide a focus for fruitful c o o p e r a t i o n b e t w e e n practi­
tioners of t h e well-established s y s t e m a t i c b r a n c h e s of agricultural a n d industrial
g e o g r a p h y . T h e r e are signs t h a t this is finally c o m i n g a b o u t ( H e a l e y a n d I l b e r y ,
1 9 8 5 ) ; b u t in its a b s e n c e , o t h e r social scientists, n o t a b l y e x p o n e n t s of a r e n e w e d ,
critical rural sociology ( B u t t e l and N e w b y , 1 9 8 0 ; F r i e d l a n d et al., 1 9 8 1 ) a n d a
g r o u p of F r e n c h applied e c o n o m i s t s (Malassis, 1 9 7 9 ; P e t i t , 1 9 8 2 ) , have spear­
h e a d e d research i n t o t h e g r o w t h of agribusiness.
T h e relative neglect of these p h e n o m e n a b y English-language geographers (con­
trast t h e w o r k of Dorel ( 1 9 7 5 ; 1 9 7 6 ; 1 9 8 2 ) a n d Diry ( 1 9 7 9 ) ) m a y p e r h a p s be
explained as follows. Tradifional agricultural g e o g r a p h y , as S m i t h ( 1 9 8 2 , 2 8 3 )
n o t e d in t h e review of a r e c e n t r e p r e s e n t a t i v e s t u d y , 'is n o longer f a s h i o n a b l e ' .
P r e o c c u p i e d w i t h classification at t h e e x p e n s e of c o n c e p t u a l analysis, it t e n d s t o
p r o d u c e w o r k w h i c h is ' e x h a u s t i v e , t e d i o u s , a n d d u l l ' ( p . 2 8 4 ) . T h e n o t a b l e e x p a n ­
sion over t h e past decade of m o r e intellectually s t i m u l a t i n g research across t h e
wider h o r i z o n s o f rural g e o g r a p h y ( P a c i o n e , 1 9 8 3 ; 1 9 8 4 ) m a y be seen in p a r t as a
response t o this s t a g n a t i o n . R u r a l geographers have t o u c h e d u p o n t h e agricultural
sector selectively, giving considerable a t t e n t i o n t o land c o n s o H d a t i o n a n d social
change in rural c o m m u n i t i e s , b u t tracing t h e e m e r g e n c e of t h e agribusiness s y s t e m
only incidentally. Gregor's ( 1 9 8 2 a ; 1 9 8 2 b ) perceptive studies a n d S m i t h ( 1 9 8 4 )
are n o t a b l e e x c e p t i o n s t o the p r e d o m i n a n t empiricism o f agricultural geographers
reviewing c o n t e m p o r a r y t r e n d s (e.g. E . S m i t h , 1 9 8 0 ) .
R e c e n t industrial g e o g r a p h y , in c o n t r a s t , has displayed n o shortage of
theoretically-informed analysis, from a variety of p h i l o s o p h i c a l p o s i t i o n s (see, for
e x a m p l e , t h e p a p e r s in H a m ü t o n a n d U n g e , 1 9 7 9 ; 1 9 8 1 ; 1 9 8 3 ) , b u t very little of
this has addressed t h e changes taking place in t h e agri-food s y s t e m . C e r t a i n l y , t h e r e
are detailed studies of l o c a t i o n a l a d j u s t m e n t in n o t a b l y raw-material o r i e n t e d
(Watts, 1 9 7 1 ; 1 9 7 4 , o n beet sugar refining) a h d t r a d i t i o n a l l y m a r k e t - o r i e n t e d
activities (Watts, 1 9 8 0 , on b r e w i n g ) . T h e latter s t u d y gives considerable a t t e n t i o n
t o t h e spatial d i m e n s i o n of c o r p o r a t e strategy, b u t little t o t h e b r o a d e r c o n t e x t
of m a r k e t t r e n d s w h i c h have e n c o u r a g e d c o r p o r a t e diversification b y b r e w e r s .
Mackenzie ( 1 9 7 9 ) a n d Diry ( 1 9 7 9 ) exemplify an a p p r o a c h t o t h e geographical
analysis of s t r u c t u r a l change in t h e agri-food sector w h i c h deserves w i d e r applica­
t i o n . Wadley's ( 1 9 7 9 ) analysis of c o r p o r a t e r e s p o n s e s t o recession in t h e A u s t r a l i a n
agricultural m a c h i n e r y i n d u s t r y a n d G y l l s t r o m ' s ( 1 9 7 7 ) efforts t o trace t h e regional
linkage and multiplier i m p a c t of different i n s t i t u t i o n a l f o r m s of p r o d u c t i o n in t h e
K e n y a n tea i n d u s t r y are also avenues of research w h i c h m e r i t further a p p l i c a t i o n .
Overall, h o w e v e r , o n e gets t h e impression t h a t industrial geographers h a v e , of l a t e ,
regarded t h e agri-food sector as a m a t u r e , stable i n d u s t r y , lacking t h e intellectual
stimulus or t h e g l a m o u r associated w i t h t h e high-tech research frontier. B e t w e e n
t h e m , t h e r e f o r e , agriculture and industrial geographers have so far c o n t r i b u t e d
less t h a n m i g h t have b e e n e x p e c t e d t o w a r d s an u n d e r s t a n d i n g of t h e d y n a m i c s of
496 Towards a geography of agribusiness

agribusiness, w h e t h e r defined as a p r o d u c t i o n system o r as t h e d o m i n a n t institu­

t i o n s w i t h i n it. T h i s is u n f o r t u n a t e , for t h e changing n a t u r e of the agri-food system
offers a challenging focus for geographical research, as I shall a t t e m p t briefly to
demonstrate.
T h e r e are at least four d i m e n s i o n s of t h e agri-food s y s t e m w h i c h invite a t t e n t i o n :
a) By a n y m e a s u r e , global f o o d p r o d u c t i o n r e m a i n s a t o p i c of f u n d a m e n t a l sub­
stantive significance in t h e late t w e n t i e t h c e n t u r y . T h e polemicists w o u l d have us
believe t h a t agribusiness i n s t i t u t i o n s a n d p r a c t i c e s are t h e only h o p e for adequately
feeding t h e w o r l d or else t h e greatest obstacle t o achieving t h a t goal. A s L i p t o n
( 1 9 7 7 , i) a d m i t s , ' p r a c t i c a l ' p e o p l e m i g h t feel t h a t O n l y an overdeveloped sense of
p a r a d o x ' c o u l d s t i m u l a t e research g r o u n d e d in t h e belief t h a t ' u n e x p l o i t e d com­
m o n a l i t i e s of interest exist b e t w e e n t h e w o r l d ' s p o o r e s t agriculturalists a n d its
richest m u l t i n a t i o n a l c o r p o r a t i o n s ' . Y e t n o t o n l y can such c o m m o n a l i t i e s be
identified, t h e y r e p r e s e n t b u t o n e of t h e p a r a d o x e s e n c o u n t e r e d in agribusiness
research. T h e r e is every incentive, t h e r e f o r e , for t h e positive b u t reflexive s t u d y by
geographers o f this i m p o r t a n t a n d d e m a n d i n g t o p i c .
b ) T h e i n d u s t r i a l i z a t i o n of agricultural p r o d u c t i o n raises f u n d a m e n t a l questions
a b o u t t h e r e l a t i o n s h i p b e t w e e n an e c o n o m i c system w i t h m e c h a n i s t i c character­
istics ( c o n c e p t u a l as well as m a t e r i a l ) a n d a p r o d u c t i o n system t h a t r e m a i n s essen­
tially tied t o n a t u r a l biological cycles. T h e c o n c e p t of t h e political e c o n o m y of soil
e r o s i o n (Blaikie, 1 9 8 4 ) , t h o u g h d e v e l o p e d in a t h i r d w o r l d c o n t e x t , invites appli­
c a t i o n e q u a l l y t o t h e c o n t e m p o r a r y agricultures o f t h e industrialized n a t i o n s
o f east a n d west. Evidence o f e n v i r o n m e n t a l stress ( C r o s s o n , 1 9 8 2 ; Crosson and
F r e d e r i c k , 1 9 7 7 ) a n d of unresolved social tensions associated w i t h t h e increas­
ingly single-nunded p u r s u i t o f e c o n o m i c r a t i o n a l i t y b y agribusiness i n s t i t u t i o n s
suggests t h a t h e r e is a focus for fruitful c o o p e r a t i v e research b y physical a n d h u m a n
geographers.
c) O v e r l a p p i n g , t o s o m e e x t e n t , w i t h t h e previous issues, are the t h e o r e t i c a l argu­
m e n t s s u r r o u n d i n g t h e i n t e r p r e t a t i o n of c o n t e m p o r a r y agricultural e v o l u t i o n . Even
in t h e a d v a n c e d industrial n a t i o n s , m a n y e l e m e n t s of t h e farming c o m m u n i t y retain
an a d e q u a t e m a t e r i a l base for resisiting t o t a l i n t e g r a t i o n i n t o t h e d o m i n a n t m o d e
of p r o d u c t i o n , be it a m i x e d capitalist e c o n o m y or centraUzed state socialism. T h e
a m b i g u o u s and u n e v e n p e n e t r a t i o n o f industrial capitalism i n t o agrarian society
has g e n e r a t e d historical a n d t h e o r e t i c a l c o n t r o v e r s y ever since K a u t s k y ' s seminal
m a r x i a n s t u d y of The agrarian question (Banaji, 1 9 8 0 ) . I n t e r p r e t a t i o n s of t h e
relations b e t w e e n farmers a n d agribusiness c o r p o r a t i o n s as t h e ' n e w feudaUsm'
( P e r e l m a n , 1 9 7 7 ) are a n a c h r o n i s t i c a n d misleading, b u t p o i n t nevertheless t o n e w
p o w e r r e l a t i o n s h i p s w h i c h d e m a n d t o be e l u c i d a t e d . T h e political e c o n o m y of
agri-food p r o d u c t i o n p r o m i s e s t o be a s t i m u l a t i n g a r e n a for geographical research.
d ) F i n a l l y , t h e e m e r g e n c e o f b i o t e c h n o l o g y as a prospective leading edge of revolu­
t i o n a r y technological a n d e c o n o m i c change b y t h e e n d of this c e n t u r y places
t h e agri-food s y s t e m in p a r t i c u l a r in a radically n e w c o n t e x t . T h e p o t e n t i a l for
genetic m a n i p u l a t i o n of p l a n t a n d animal life t o c i r c u m v e n t e n v i r o n m e n t a l con­
straints a n d n a t u r a l h m i t a t i o n s (including diseases) o n f o o d p r o d u c t i o n m a y
 Iain Wallace 497

transform c o n t e m p o r a r y agriculture a n d t h e processing of its p r o d u c t s . T h e possible

benefits of a m o r e secure a n d a b u n d a n t food s u p p l y n e e d t o b e weighed against t h e
risks a n d ethical c o n c e r n s associated w i t h genetic engineering. T h e i n s t i t u t i o n a l
c o n t e x t w i t h i n w h i c h b i o t e c h n o l o g y is a d v a n c e d a n d applied raises q u e s t i o n s a b o u t
t h e social a n d e c o n o m i c incidence of its benefits a n d o f their d i s t r i b u t i o n a m o n g
t h e world's major ecological z o n e s ( K l o p p e n b u r g a n d K e n n e y , 1 9 8 4 ; K e n n e y et
al., 1 9 8 3 ) . T h i s t o p i c t o o , t h e r e f o r e , offers p l e n t y of scope for geographical
analysis.
In s u m , t h e relative neglect of agribusiness research b y geographers is h a r d t o justify
and overdue for r e m e d y . T h e r e m a i n d e r of this review is d e v o t e d t o identifying
h t e r a t u r e o n w h i c h such research can build, g r o u p e d u n d e r t h r e e b r o a d h e a d i n g s :
the politcal e c o n o m y of agriculture, t h e s t r u c t u r e a n d b e h a v i o u r of agri-food
c o r p o r a t i o n s , and t h e role of a d v a n c e d t e c h n o l o g y . T h e focus is o n w e s t e r n in­
dustrial e c o n o m i e s : agribusiness in t h e t h i r d w o r l d is t o u c h e d o n o n l y t a n g e n t a l l y
b u t will, I h o p e , receive similar a t t e n t i o n in a future p a p e r .

in The political economy of agriculture

T h e p o h t i c a l e c o n o m y of c o n t e m p o r a r y w e s t e r n agriculture a b o u n d s in ambiguities.
( T o e s t a b h s h t h a t capitalist e c o n o m i e s are n o t u n i q u e in this respect o n e h a s o n l y
t o n o t e t h e e c o n o m i c and political significance of agricultural p r o d u c t i o n from
private p l o t s in t h e Soviet U n i o n . ) O n e can identify at least t h r e e sources of con­
fusion. First, t h o s e w h o w o r k t h e land a n d can satisfy some p r o p o r t i o n of their
subsistence n e e d s t h e r e f r o m retain a (variable) degree o f i n d e p e n d e n c e from t h e
c o n s t r a i n t s of t h e prevailing m o d e of p r o d u c t i o n . This i n d e p e n d e n c e has b o t h
material and m o t i v a t i o n a l d i m e n s i o n s : it h a s t h e effect o f limiting t h e applicability
of theories of p r o d u c e r b e h a v i o u r , w h e t h e r t h e y be neoclassical, m a r x i a n , or of
some o t h e r origin. S e c o n d l y , p o p u l a r ( a n d t h e r e f o r e politically relevant) c o n c e p ­
tions a n d m u c h a c a d e m i c i n t e r p r e t a t i o n o f t h e agricultural sector has failed t o k e e p
pace w i t h its t r a n s f o r m a t i o n since t h e 1 9 4 0 s . T h e image or m o d e l of farmers as
relatively h o m o g e n e o u s s m a l l - t o - m e d i u m scale e n t r e p r e n e u r s selling i n t o near-
perfect b u t characteristically u n s t a b l e m a r k e t s is at considerable variance w i t h
reality. It ignores t h e massive a n d universal i n v o l v e m e n t of t h e state in w e s t e r n
agriculture (Bowler, 1 9 7 9 ) a n d t h e substantial h e t e r o g e n e i t y of business size,
t y p e , and goals w i t h i n t h e c o n t e m p o r a r y farming c o m m u n i t y . T h i r d l y , t h e em­
ergence of an agribusiness s y s t e m , in w h i c h t h e state is a major e l e m e n t (despite
its n o t a b l e absence from t h e definitions reviewed a b o v e ) h a s served t o focus t h e
conflicts of interest w h i c h exist b e t w e e n different c o m p o n e n t s o f t h e system a n d
w h i c h t e n d t o result in agri-food poUcies O f considerable c o m p l e x i t y a n d d o u b t f u l
c o n s i s t e n c y ' (Sinclair, 1 9 8 0 , 3 2 9 ) . Moreover, any a t t e m p t t o p e n e t r a t e t h e am­
biguities t o provide a c o n s i s t e n t a c c o u n t of w h a t is h a p p e n i n g t o w e s t e r n agri-food
p r o d u c t i o n m u s t remain sensitive t o i m p o r t a n t i n t e r n a t i o n a l variations in t h e
cultural and historical f o u n d a t i o n s of c u r r e n t issues. T h e persistent ideology of
498 Towards a geography of agribusiness

Jeffersonian agrarianism in t h e U n i t e d S t a t e s , t h e value a t t a c h e d t o d o m e s t i c food

self-sufficiency b o r n of w a r t i m e e x p e r i e n c e in Britain, a n d the s t r e n g t h of the rural
v o t e in t h e 1 9 6 0 s in F r a n c e are p o w e r f u l sources of c o n t e x t u a l i z a t i o n .

1 Agribusiness and the mode of production

T h e r e c e n t a p p e a r a n c e of farm m a n a g e r s installed b y financial i n s t i t u t i o n s o n land

a c q u i r e d for i n v e s t m e n t p u r p o s e s has clarified t h e distinction b e t w e e n a t t i t u d e s
of ' p u r e ' capitalist o p e r a t o r s a n d t h o s e of t h e m a j o r i t y of farmers w h o c o n t i n u e t o
derive n o n - p e c u n i a r y satisfactions f r o m their p r o d u c t i v e activity ( B o w e r s and
Cheshire, 1 9 8 3 ) . T h a t t h e values a t t a c h e d b y m a n y p r o d u c e r s , of all sizes and
i n c o m e levels, t o i n d e p e n d e n c e , w o r k i n g w i t h n a t u r e , a n d m a i n t a i n i n g t h e quality
(variously defined) of t h e rural e n v i r o n m e n t have b e c o m e embellished in politically
effective ideologies d o e s n o t negate t h e fact t h a t t h e y are g r o u n d e d in worldviews
w h i c h resist t h e r e d u c t i o n i s m of m a k i n g profit m a x i m i z a t i o n t h e sole measure of
t h e w o r t h o f their activity ( N e w b y , 1 9 7 9 ) . I n d e e d , t h e effectiveness o f t h e farmers'
voice is in p a r t a m e a s u r e o f t h e p u b h c c o n s e n s u s t h a t farming is n o t j u s t a n o t h e r
i n d u s t r y ; t h a t it r e m a i n s a different w a y of life. T h e e m e r g e n c e of t h e agribusiness
s y s t e m is seen t o t h r e a t e n t h a t difference, h o w e v e r , b y facing agricultural p r o d u c e r s
w i t h increasing pressures t o act strictly in a c c o r d a n c e w i t h e c o n o m i c rationaUty.
It is t h e r e f o r e necessary t o define m o r e clearly t h e n a t u r e of farm o p e r a t i o n s within
c o n t e m p o r a r y capitalism.
T o w h a t e x t e n t d o farmers differ, n o t j u s t a t t i t u d i n a l l y b u t in m a t e r i a l sub­
stance, from o t h e r p r o d u c e r s in capitalist societies? Within neoclassical e c o n o m i c s ,
t h e distinctive feature of agricultural p r o d u c e r s is their stance as price takers in a
m a r k e t e n v i r o n m e n t of a t o m i s t i c c o m p e t i t i o n . M o r e o v e r , 'a c o m b i n a t i o n of supply
i n s t a b i l i t y , rapid technological c h a n g e , increases in food p r o d u c t i o n , and low
income-elasticity of d e m a n d for food t h r e a t e n s c h r o n i c o v e r p r o d u c t i o n a n d / o r
violent fluctuations in b o t h p r o d u c t i o n a n d p r i c e ' ( N e w b y , 1 9 8 2 , 1 3 7 ) ; from which
w e s t e r n g o v e r n m e n t s have felt b o u n d t o p r o t e c t t h e farming c o m m u n i t y w i t h
policy i n t e r v e n t i o n s t o stabilize m a r k e t s and g u a r a n t e e prices. P r e v e n t e d b y their
sheer n u m b e r s from r e s p o n d i n g t o adverse m a r k e t c o n d i t i o n s like a cartel, farmers
'have an especially s t r o n g incentive t o c o m b i n e t o g e t h e r as a political pressure
g r o u p ' ( B o w e r s and C h e s h i r e , 1 9 8 3 , 6 4 ) . T h e success of farm interest g r o u p s in
n u r t u r i n g a n d capitalizing o n l a t e n t p u b l i c s y m p a t h y has f o u n d expression in
Britain in t h e privileged p o s i t i o n of t h e N a t i o n a l F a r m e r s U n i o n in t h e f o r m a t i o n
of price s u p p o r t decisions b y t h e Ministry of A g r i c u l t u r e . In t h e U n i t e d S t a t e s ,
' t h e 'agricultural e s t a b l i s h m e n t ' , m o s t observers have long agreed, has comprised
one of t h e m o s t closely k n i t , i m p e n e t r a b l e cadres of political decision m a k e r s
in t h e w h o l e o f A m e r i c a n g o v e r n m e n t ' ( B r o w n e , 1 9 7 8 , 3 ) . H o w e v e r , a l t h o u g h
t h e legitimacy of state i n t e r v e n t i o n in agriculture rests m o s t securely o n its pro­
claimed defence of t h e family farm (Vogeler, 1 9 8 1 ) , in practice 'it can be estab­
lished as a principle t h a t w h e n g o v e r n m e n t u n d e r t a k e s t o assist s o m e special g r o u p ,
t h e chief beneficiaries will t u r n o u t t o be t h o s e in t h e u p p e r ranges of eUgibility'
 Iain Wallace 499

(Paarlberg, 1 9 7 8 , 1 4 0 ) , i.e. t h e largest farm enterprises m o s t strongly i n t e g r a t e d

i n t o t h e agribusmess s y s t e m . T h e C o m m o n Agricultural PoUcy of t h e E E C d e m o n ­
strates t h i s powerfully (Marsh a n d S w a n n e y , 1 9 8 0 ) .
Within m a r x i a n analysis, c o m m e r c i a l agricultural p r o d u c e r s in a d v a n c e d capital­
ist societies appear as a delayed b u t t r a n s i t o r y survival of precapitalist r e l a t i o n s .
T h e family farmer is a p r o p e r t i e d l a b o r e r , an i n d e p e n d e n t p r o d u c e r of agricultural
c o m m o d i t i e s w h o o w n s b o t h t h e m e a n s o f p r o d u c t i o n a n d t h e fruits of his l a b o r '
(Davis, 1 9 8 0 , 1 3 4 ) . A l t h o u g h p r o p e r t y o w n e r s h i p , a n d t h e subsistence p o t e n t i a l it
confers, p r o t e c t t h e farmer from the full force of m a r k e t pressures, his or her
i n d e p e n d e n c e o f t h e m u U i m a t e l y rests o n t h e degree t o w h i c h 'possession of t h e
m e a n s of p r o d u c t i o n assures autonomous p r o d u c t i o n ' ( p . 1 3 8 ) . In o t h e r w o r d s , t o
the e x t e n t t h a t farming practice b e c o m e s d e p e n d e n t o n p u r c h a s e d i n p u t s , n o t least
in order t o satisfy an increasingly n a r r o w l y speciaUzed m a r k e t for o u t p u t s , t h e
p r o d u c e r ' s e c o n o m i c a n d managerial i n d e p e n d e n c e is e r o d e d . Even t h e l a n d o w n i n g
farmer is caught b e t w e e n oligopolistic m a r k e t s u p s t r e a m and d o w n s t r e a m of his
or h e r o p e r a t i o n s a n d tied t o a treadmill of e x p a n s i o n t o c o m p e n s a t e for s h r i n k i n g
profit margins. S t a t e i n t e r v e n t i o n t o p r o t e c t t h e t r a d i t i o n a l family farm from
t h e e c o n o m i c pressures t o w a r d agrarian r e s t r u c t u r i n g c r e a t e d b y t h e agribusiness
oHgopolies is seen t o e n c o u n t e r growing c o n t r a d i c t i o n s .
T h e r e is an e l e m e n t of c o m m o n g r o u n d , t h e r e f o r e , b e t w e e n m a r x i a n a n d liberal
i n t e r p r e t a t i o n s of t h e d y n a m i c s of c o n t e m p o r a r y agriculture. Given t h e industrial
and aggregate d e m a n d s t r u c t u r e of w e s t e r n e c o n o m i e s , farmers face an incessant
'cost-price s q u e e z e ' , w h i c h h a s been a m e U o r a t e d o n l y b y state i n t e r v e n t i o n , a rapid
rise in agricultural p r o d u c t i v i t y (Ghersi a n d W a m p a c h , 1 9 7 1 ) , a n d successful
a d a p t a t i o n t o a changing m a r k e t e n v i r o n m e n t o n t h e p a r t of some p r o d u c e r s . These
forms of a d j u s t m e n t , h o w e v e r , have served progressively t o polarize t h e farming
c o m m u n i t y i n t o a m i n o r i t y of highly capitalized, large-scale e n t e r p r i s e s , w h i c h
a c c o u n t for a growing p r o p o r t i o n of t o t a l agricultural p r o d u c t i o n , a n d a vulnerable
majority of i n a d e q u a t e l y capitalized farms w h o s e abiUty t o p r o v i d e their p r o p r i e ­
t o r s w i t h a livelihood is being increasingly u n d e r m i n e d . T h e c u l t u r a l a n d political
d i l e m m a w h i c h this p o l a r i z a t i o n p r e s e n t s in societies raised t o a p p r e c i a t e t h e
virtues of t r a d i t i o n a l h u s b a n d r y is a c u t e ( G r e g o r , 1 9 8 2 b ) , b u t is ideologically
diffused in t h a t family o w n e r s h i p (albeit h a b i t u a l l y in c o r p o r a t e form a m o n g t h e
larger u n i t s ) p r e d o m i n a t e s across t h e entire size/capitalization s p e c t r u m . T h i s is
t h e ambiguity reflected in Vogeler's ( 1 9 8 1 ) definition of agribusiness n o t e d earlier.
It should c o m e as n o surprise t h a t a farm sector w h i c h is increasingly i n t e g r a t e d
i n t o t h e non-farm e c o n o m y s h o u l d display characteristics l o n g associated w i t h n o n -
agricultural p r o d u c t i o n . Business u n i t s of diverse size, p r o f i t a b i l i t y , a n d f o r m
engaged in o n e or m o r e specialized activities are t h e n o r m in m a n u f a c t u r i n g a n d t h e
services. T h e q u e s t i o n o f considerable t h e o r e t i c a l and p o h t i c a l interest w h i c h p o s e s
itself, h o w e v e r , is w h e t h e r t h e basis of agricultural p r o d u c t i o n r e m a i n s sufficiently
different from t h a t of o t h e r sectors of t h e e c o n o m y for s m a l l - t o - m e d i u m sized
family busmesses t o survive as t h e m o d a l g r o u p of o p e r a t o r s , a n d m o r e t h a n t h a t ,
t o p r o s p e r . N e w b y a n d B u t t e l ( 1 9 8 0 , 2 0 ) review t h e alternatives in these t e r m s :
500 Towards a geography of agribusiness

If the family farm is destined to disappear through a progressive differentiation process,

the major emerging force in the agricultural sector will be the agricultural proletariat; the
eventual decomposition of the family farmer into a rural bourgeoisie and rural proletariat
would make efforts to 'save' the family farm increasingly Utopian. On the other hand, if
petty commodity production is likely to persist in the indefinite future, efforts to improve
the terms of trade for, and otherwise assist, the petty commodity producer . . . can be
expected to bear some fruit.

K l o p p e n b u r g a n d K e n n e y ( 1 9 8 4 ) s u m m a r i z e t h e reasons for believing t h a t there

is s o m e t h i n g distinctive a b o u t agricultural p r o d u c t i o n w h i c h m a k e s t h e complete
p e n e t r a t i o n o f t h e sector b y a technologically r a t i o n a l capitalism unlikely. Despite
t h e e m e r g e n c e of a p p r o p r i a t e l y styled ' f a c t o r y farming' in some b r a n c h e s of live­
s t o c k enterprise (broilers, pigs), farm o p e r a t i o n s still retain features w h i c h t e n d to
r e d u c e t h e rate of r e t u r n o n capital invested in agriculture b e l o w t h a t in other
s e c t o r s . D e p e n d e n c e o n n a t u r a l cycles of g r o w t h a n d m a t u r a t i o n m e a n s t h a t pro­
d u c t i o n is d i s c o n t i n u o u s . This slows t h e t u r n o v e r rate of capital, lowers t h e utiliza­
t i o n rate of e q u i p m e n t , and r e s u h s in seasonal u n d e r e m p l o y m e n t of paid labour.
Risks associated w i t h disease a n d u n p r e d i c t a b l e climatic events c o n t i n u e t o be
u n a v o i d a b l e . T h e physically extensive n a t u r e of p r o d u c t i o n increases t h e task of
m a n a g e m e n t w i t h respect t o t h e oversight a n d c o n t r o l of labour i n p u t s . T h e pur­
chase or o w n e r s h i p of l a n d locks an increasingly large a m o u n t of capital i n t o an
illiquid a n d relatively u n p r o d u c t i v e f o r m . In general, t h e r e f o r e , t h e integration of
farm o p e r a t i o n s i n t o t h e activities of n o n - f a r m businesses has b e e n achieved less b y
direct i n v e s t m e n t t h a n b y c o n t r a c t u a l linkages w h i c h leave t h e agricultural p r o d u c e r
a n o m i n a l l y i n d e p e n d e n t p r o p r i e t o r b u t one whose freedom of action is t o a
greater or lesser e x t e n t c o n s t r a i n e d (Allen, 1 9 7 2 ; H a r t , 1 9 7 8 ; Davis, 1 9 8 0 ; Malcolm,
1983).
T h e distinctiveness of agriculture from o t h e r s e c t o r s of t h e e c o n o m y is n o t con­
fined t o t h e perspective of t h e suppliers o f capital. N e w b y ( 1 9 8 2 , 150) argues t h a t
t h e m e c h a n i z a t i o n of m o s t t r a d i t i o n a l f o r m s of t e m p e r a t e agriculture has n o t
p r o d u c e d t h e alienating w o r k e n v i r o n m e n t of assembly-line m a n u f a c t u r i n g . I n d e e d ,
he suggests t h a t m o s t farm w o r k e r s ( p r o p r i e t o r s a n d their regular e m p l o y e e s ) con­
t i n u e t o e x p e r i e n c e a s u b s t a n t i a l a m o u n t of ' a u t o n o m y , discretion [and] v a r i e t y '
o n t h e j o b . T h e seasonality and physical extensiveness of farm o p e r a t i o n s m e a n s
t h a t ' m e c h a n i s a t i o n has t r a n s f o r m e d t h e pace of w o r k o n t h e land, b u t left its
r h y t h m u n a l t e r e d . M o r e o v e r , it has e n a b l e d t h e m a c h i n e t o r e m a i n t h e servant of
t h e w o r k e r , rather t h a n vice versa a n d in d o i n g so has r e m o v e d m u c h of t h e r o u t i n e
[physical] d r u d g e r y ' from a g r i c u h u r a l l a b o u r . This is n o t t h e case, h o w e v e r , in
e n v i r o n m e n t s in w h i c h it h a s p r o v e d possible a n d profitable t o eliminate t h e con­
straints of s e q u e n c e a n d seasonality o n p r o d u c t i o n . Large-scale p o u l t r y enterprises
a n d intensive h o r t i c u l t u r a l holdings in irrigated s u b t r o p i c a l regions are character­
ized b y extensive a u t o m a t i o n a n d t h e r o u t i n i z e d , i n s e c u r e , a n d p o o r l y paid labour
c o n d i t i o n s o f c o m p a r a b l e unskilled j o b s in the m a n u f a c t u r i n g sector. (See Fried-
land etal., 1 9 8 1 , o n t h e California l e t t u c e i n d u s t r y . )
H o w far w o u l d t h e i n s t i t u t i o n a l s t r u c t u r e of t h e farm sector in w e s t e r n n a t i o n s
 Iain Wallace 501

nevertheless resemble t h a t of t h e m a n u f a c t u r i n g sector m o r e closely w e r e it n o t for

massive state i n t e r v e n t i o n t o m a i n t a i n t h e viability of t r a d i t i o n a l family farms?
T h e ambiguities o f policies w h i c h , while p u r p o r t i n g t o assist t h e small p r o p r i e t o r ,
invariably benefit large h o l d i n g s d i s p r o p o r t i o n a t e l y , m a k e s it particularly difficult
t o answer this q u e s t i o n satisfactorily. T h e increasing incidence o f p a r t - t i m e farming,
a l t h o u g h n o t invariably a s y m p t o m of growing e c o n o m i c m a r g i n a l i t y , d o e s reflect
t h e rising t h r e s h o l d of c o m m e r c i a l farm o p e r a t i o n s (Sinclair, 1 9 8 0 ) . G r e g o r ( 1 9 8 2 b )
identifies farm capitalization as t h e critical variable d e t e r m m i n g t h e profitability
of c o n t e m p o r a r y agricultural p r o d u c t i o n . It h a s b e c o m e m u c h m o r e difficult for
the smaller family farm t o c o m p e t e effectively o n t h e basis of its t r a d i t i o n a l advan­
tage, the higher yields associated w i t h greater l a b o u r i n t e n s i t y , for increasingly
'intensification t u r n s m o r e o n t h e use of capital t h a n l a b o r , and capital is usually
m o r e easily a c c u m u l a t e d o n farms of larger scale' ( p . 6 ) . T h e f o r m a t i o n of agri­
cultural cooperatives h a s long b e e n a favoured response t o t h e difficulties en­
c o u n t e r e d b y small-to-medium sized farmers in their deaUngs w i t h t h e rest o f t h e
e c o n o m y . H o w e v e r , their t h e o r e t i c a l benefits as non-capitaUst i n s t i t u t i o n s are
realized only i n f r e q u e n t l y , a n d t h e m o r e successful t h e y are as businesses, t h e
m o r e t h e y t e n d t o reinforce t h e prevailing m a r k e t forces favouring large o p e r a t o r s
( L e b o s s é a n d Ouisse, 1 9 7 3 ) .

2 Agriculture, agribusiness, and the state

T h e agri-food s y s t e m of industrialized w e s t e r n n a t i o n s c o n s t i t u t e s a sizable e l e m e n t

of t h e e c o n o m y , b u t it is associated w i t h a w i d e variety of i n t e r e s t g r o u p s e x e r t i n g
divergent a n d even c o n t r a d i c t o r y poUtical d e m a n d s . F a r m e r s seek g u a r a n t e e d
prices and c o n s u m e r s low f o o d c o s t s , placing ' d o w n s t r e a m ' agribusinesses in struc­
tural o p p o s i t i o n t o b o t h parties. Agricultural b u r e a u c r a c i e s t e n d t o have a d d i t i o n a l
objectives of their o w n (Sinclair, 1 9 8 0 ) . It is i n d i s p u t a b l e , hov/ever, t h a t despite
their shrinking n u m b e r s a n d r e d u c e d poUtical salience, farmers have b e e n dis­
p r o p o r t i o n a t e l y successful in p r o m o t i n g their i n t e r e s t s at t h e e x p e n s e o f t h e otlier
g r o u p s . In t h e absence o f a d e q u a t e steps t o limit farm p r o d u c t i o n , a c o m b i n a t i o n
of regulated prices ( t o g u a r a n t e e i n c o m e ) a n d rising physical p r o d u c t i v i t y h a s
resulted in t h e d o u b l e h e a d a c h e for state officials of m o u n t i n g c o m m o d i t y sur-
plusses and increasing b u d g e t a r y b u r d e n s . B o d y ( 1 9 8 2 ) e s t i m a t e s t h a t in 1 9 8 0 / 8 1
the overall level o f s u p p o r t t o UK farmers from t a x p a y e r s a m o u n t e d , directly a n d
indirectly, t o 166 per c e n t of n e t farm i n c o m e . S u p p o r t t o US farmers t e n d s t o be
m o r e n a r r o w l y d i s t r i b u t e d b u t p r o p o r t i o n a t e l y n o less significant overall t h a n t h a t
prevailing in t h e E E C [The Economist, 14 April 1 9 8 4 ) . T h e g r o w i n g p o l a r i z a t i o n
of w e a l t h w h h i n t h e farming c o m m u n i t y , itself p a r t l y t h e result of t h e u n e v e n
incidence of g o v e r n m e n t s u p p o r t , h a s strained a n d even fractured t h e u n i t y of
farmers' u n i o n s a n d pressure g r o u p s (Mitchell, 1 9 7 5 , C h a p t e r 2 ) . M a c L e n n a n a n d
Walker ( 1 9 8 0 ) n o t e t h e e m e r g e n c e of t h e popuUst A m e r i c a n A g r i c u l t u r a l Move­
m e n t in t h e late 1970s w h o s e m e m b e r s h a d little in c o m m o n w i t h ' t h e n e w
A m e r i c a n f a r m e r ' c e l e b r a t e d in t h e cover s t o r y of Time ( 6 N o v e m b e r 1 9 7 8 ) . T h e
502 Towards a geography of agribusiness

o p p o s i n g factional interests of dairy a n d cereal farmers w i t h i n t h e British N F U

c a m e t o a h e a d in t h e spring of 1 9 8 4 in t h e a f t e r m a t h of t h e i m p o s i t i o n of reduced
m i l k q u o t a s b y t h e E E C (The Times, 11 J u n e 1 9 8 4 ) . B u t even these developments
have so far d o n e little t o u n d e r m i n e t h e s t r e n g t h of farm l o b b i e s .
It h a s b e e n clearly established t h a t a s u b s t a n t i a l p r o p o r t i o n of t h e (over)generous
state aid t o British agricultural p r o d u c e r s h a s b e c o m e capitalized in t h e value of
f a r m l a n d ( B o w e r s a n d C h e s h i r e , 1 9 8 3 ) a n d t h a t t h e E E C - f u n d e d p r o s p e r i t y of grain
farmers in particular a t t r a c t e d a surge of i n s t i t u t i o n a l i n v e s t m e n t in farmland in
t h e m i d - 1 9 7 0 s at a t i m e w h e n o t h e r o u t l e t s for funds l o o k e d less attractive ( M u n t o n ,
1 9 7 6 ; 1 9 7 7 ) . B o d y ( 1 9 8 2 , 3 4 ) is u n d o u b t e d l y c o r r e c t i n arguing t h a t ' t h e industries
t h a t service agriculture [such as] Shell, B P , ICI, R a n k Hovis M c D o u g a l l . . . have
. . . r e a c h e d their p r e s e n t size because t h e y have shared in t h e advantages of agri­
cultural p r o t e c t i o n ' . U n f o r t u n a t e l y , h o w e v e r , it is e x t r e m e l y difficult t o p r o d u c e
d o c u m e n t e d e s t i m a t e s o f c o r p o r a t e benefits t o s u p p o r t this claim, a n d n o writer
appears t o have d o n e so. H i g h t o w e r ( 1 9 7 5 ) argues t h a t in t h e U n i t e d S t a t e s the
p o l i c y - m a k i n g e n v i r o n m e n t w h i c h is s u p p o r t i v e of an increasingly capital- and
energy-intensive a g r i c u l t u r e , and h e n c e its associated i n p u t suppliers, is the out­
g r o w t h of 'agribusiness-agrigovernment'. Transfer of p e r s o n n e l b e t w e e n executive
p o s i t i o n s in agribusiness c o φ o r a t i o n s and t h e D e p a r t m e n t of Agriculture ensures
a c o m m o n a l i t y of interest b e t w e e n tlie state a n d c o r p o r a t e interests akin t o the
b e t t e r k n o w n military-industrial variant. G u i t h e r ( 1 9 8 0 ) provides an exhaustive
catalogue of o r g a n i z a t i o n s w i t h legislative interests in t h e U S agri-food system.
B u t t e l et al. ( 1 9 8 3 ) w a r n t h a t t h e r e s t r u c t u r i n g of agricultural research in the
U n i t e d S t a t e s associated w i t h c o m m e r c i a U z a t i o n of b i o t e c h n o l o g y is increasing
t h e p o w e r of agribusiness c o r p o r a t i o n s at t h e e x p e n s e of t h e public-service thrust
of t h e land-grant universities.

IV The structure and behaviour of agri-food corporations

T h e off-farm e l e m e n t s of t h e c o n t e m p o r a r y agribusiness system consist, for the

m o s t p a r t , of l o n g - e s t a b h s h e d specializations in t h e m a n u f a c t u r i n g and service
s e c t o r s . Despite t h e growing t e n d e n c y for agri-food c o r p o r a t i o n s t o diversify their
activities w i t h i n or b e y o n d t h e s y s t e m , t h e r e r e m a i n s a substantial degree of separa­
t i o n b e t w e e n , say, t h e major agricultural i n p u t m a n u f a c t u r e r s , t h e f o o d and drink
m a n u f a c t u r e r s , a n d t h e major f o o d d i s t r i b u t o r s . T h i s is reflected in r e c e n t sectoral
studies p r e p a r e d b y t h e U n i t e d N a t i o n s C e n t r e o n T r a n s n a t i o n a l C o r p o r a t i o n s
( U N C T C , 1 9 8 1 ; 1 9 8 2 ; 1 9 8 3 ) a n d in m o s t o t h e r relevant p u b U c a t i o n s , a m o n g w h i c h
studies of f o o d m a n u f a c t u r i n g p r e d o m i n a t e .

1 Farm input manufacturers

T h e principal i t e m s of e x p e n d i t u r e b y British farmers in 1977 were feedstuffs

( 5 8 per c e n t of o u t l a y s ) , m a c h i n e r y ( 1 5 per c e n t ) , fertilizers ( 1 4 per c e n t ) , and
 Iain Wallace 503

seeds a n d fuel ( a p p r o x i m a t e l y 6.5 per cent e a c h ) ( B a r k e r , 1 9 8 1 , 179). F e e d firms

are distinguished b y i n p u t — o u t p u t relations w h i c h link t h e m almost exclusively
w i t h agriculture in each d i r e c t i o n (Malassis, 1 9 7 3 ) , b u t Diry ( 1 9 7 9 ) p o i n t s t o t h e
critical d e p e n d e n c e of even large m a n u f a c t u r e r s o n i n p u t s s u c h as v i t a m i n s f r o m t h e
leading t r a n s n a t i o n a l p h a r m a c e u t i c a l c o r p o r a t i o n s . Effective c o n t r o l of farm
o p e r a t i o n s b y c o n t r a c t s t i p u l a t i o n s is stronger in t h e f e e d - p o u l t r y i n d u s t r y t h a n
a n y w h e r e else in t h e agribusiness s y s t e m . N o t only is i n d e p e n d e n t e n t r e p r e n e u r i a l
decision m a k i n g largely r e m o v e d from t h e farmer t h e r e b y , t h e i m p o s i t i o n b y trans-
nafional feed firms of t h e N o r t h A m e r i c a n recipe of maize a n d soya based i n p u t s
denies E u r o p e a n farmers t h e o p p o r t u n i t y t o e x p l o i t alternative sources of p r o t e i n ,
such as pulses, w h i c h are often m o r e suited t o E u r o p e a n growing c o n d i t i o n s ( D i r y ,
1 9 7 9 ) . Nevertheless, t h e C o m m o n A g r i c u l t u r a l Policy of t h e E E C has itself c r e a t e d
d i s t o r t i o n s in t h e E u r o p e a n feed i n d u s t r y and p u t feed-Uvestock o p e r a t i o n s for­
m e r l y based o n c h e a p offshore raw materials at a l o c a t i o n a l disadvantage (Harris
etal., 1 9 8 3 C h a p t e r 1 0 ) .
T r a c t o r s c o n s t i t u t e over half t h e w e s t e r n w o r l d ' s agricultural m a c h i n e r y pur­
chases, a n d c o m b i n e harvesters j u s t u n d e r o n e q u a r t e r . In 1 9 8 0 , 11 t r a n s n a t i o n a l
c o r p o r a t i o n s a c c o u n t e d for m o r e t h a n 7 0 p e r cent of all agricultural m a c h i n e r y
sales, b u t for o n l y t w o firms in t h e i n d u s t r y ( J o h n Deere a n d M a s s e y - F e r g u s o n )
were these p r o d u c t s t h e principal line of business ( U N C T C , 1 9 8 3 ) . K u d r l e ' s ( 1 9 7 5 )
s t u d y of t h e w o r l d t r a c t o r i n d u s t r y p o i n t s t o an inefficiently f r a g m e n t e d i n d u s t r y
structure and persistent large price differentials b e t w e e n n a t i o n a l m a r k e t s w h i c h
could h a r d l y have survived a less a t o m i s t i c set of b u y e r s t h a n farmers r e p r e s e n t .
Fertilizer p r o d u c t i o n is also c o n c e n t r a t e d , t h o u g h less so, in t h e h a n d s of trans­
n a t i o n a l c o r p o r a t i o n s , for w h o m it is usually o n e of a w i d e range of chemical
p r o d u c t s . H o w e v e r , agricultural c o o p e r a t i v e s have a s s u m e d a m u c h m o r e active role
in fertilizer p r o d u c t i o n t h a n t h e y have in m a c h i n e r y p r o d u c t i o n , n o t least in t h e
United S t a t e s ( U N C T C , 1 9 8 2 ) . B o t h these farm i n p u t industries face c o n t i n u i n g
challenges in effectively adjusting their p r o d u c t m a r k e t i n g a n d d i s t r i b u t i o n c h a n n e l s
t o a rural central place s y s t e m still changing in response t o t h e declining n u m b e r
of farms a n d t o f a r m e r s ' greater d e p e n d e n c e o n high order financial a n d t e c h n i c a l
services. Vogeler ( 1 9 8 1 ) u p d a t e s G o l d s c h m i d t ' s ( 1 9 4 7 ) e x a m i n a t i o n of t h e conse­
q u e n c e s for rural t o w n s of different s t r u c t u r a l p a t t e r n s of agricultural l a n d o w n e r -
ship ( n o t e t h e caveat of H a y e s and O l m s t e a d , 1 9 8 4 ) , b u t t h e r e is scope for a
b r o a d e r c o n t e m p o r a r y analysis of t h e r e l a t i o n s h i p b e t w e e n t h e agribusiness s y s t e m
and trade c e n t r e viability ( H o d g e , 1 9 6 5 ) .

2 Food processing and manufacturing

F o o d processing and m a n u f a c t u r i n g is one o f t h e w o r l d ' s principal industrial

activities, responsible in 1 9 7 5 for 19 per c e n t of t o t a l o u t p u t a n d 12.5 per c e n t
of e m p l o y m e n t a n d value a d d e d in t h e m a n u f a c t u r i n g sector ( U N C T C , 1 9 8 1 ) .
A l t h o u g h it is p r o p o r t i o n a t e l y m o r e significant in p o o r t h a n in rich c o u n t r i e s , even
in an e c o n o m y such as t h e U n i t e d K i n g d o m f o o d processing r e m a i n s o n e o f t h e
504 Towards a geography of agribusiness

largest s u b s e c t o r s of m a n u f a c t u r i n g ( B u r n s et al., 1 9 8 3 ) . Increasingly, h o w e v e r ,

t h e r e is a d i s t i n c t i o n b e t w e e n e s t a b l i s h m e n t s a n d firms o r i e n t e d t o t h e processing
of agricultural i n p u t s a n d t h o s e o r i e n t e d t o t h e p r o d u c t i o n a n d m a r k e t i n g o f m a n u ­
f a c t u r e d f o o d s , for w h i c h i n p u t s are processed r a t h e r t h a n raw. T h e former cate­
gory o f o p e r a t i o n s are c o n c e r n e d t o p r o c u r e reliable s u p p h e s of p r o d u c e a n d t o
p r o c e s s t h e m a t m i n i m u m c o s t , o f t e n r e l y m g o n b y p r o d u c t s for t h e b u l k of t h e h
p r o f i t s . T h e l a t t e r g r o u p c o n s t i t u t e a n increasingly c o n s u m e r - o r i e n t e d i n d u s t r y ,
striving t o p r o d u c e a n identifiable, differentiated, p a c k a g e d g o o d ( B u r n s , 1 9 8 3 ) .
Against t h i s b a c k g r o u n d of Engel's L a w a n d sluggish p o p u l a t i o n g r o w t h , firms t h a t
a r e heavily reliant o n basic processing, s u c h as sugar refiners a n d flour millers, face
critical decisions t o e n s u r e their c o n t i n u e d p r o s p e r i t y . T h e m o s t d y n a m i c g r o w t h in
t h e f o o d sector is at t h e o t h e r e n d o f t h e p r o d u c t s p e c t r u m , a m o n g convenience
f o o d s , w h e r e t h e challenge is t o m a i n t a i n c o n t i n u a l p r o d u c t i n n o v a t i o n in a highly
competitive environment.
Given t h e u n i v e r s a h t y o f t h e d e m a n d for processed foodstuffs in industrialized
societies a n d t h e l o w t e c h n i c a l barriers t o e n t r y , f o o d p r o d u c t i o n is surprisingly
c o n c e n t r a t e d . In 1 9 7 6 , a p p r o x i m a t e l y o n e t h i r d of t h e n o n - c o m m u n i s t w o r i d ' s
m a n u f a c t u r e d f o o d w a s p r o d u c e d b y 1 8 9 firms, e a c h w i t h a t u r n o v e r exceeding
$ 3 0 0 million ( U N C T C , 1 9 8 1 ) . In c o u n t r i e s such as t h e U n i t e d K m g d o m a n d t h e
U n i t e d S t a t e s , t h e four leading firms in e a c h subsector of t h e f o o d m a r k e t fre­
q u e n t l y a c c o u n t for 5 0 - 7 0 p e r c e n t o f sales. B u r n s ( 1 9 8 3 ) suggests t h a t t h e con­
c e n t r a t i o n o f p r o d u c t i o n in Britain since 1 9 5 0 h a s b e e n h a s t e n e d b y factors
c o m m o n t o o t h e r i n d u s t r i e s , such as t h e a t t i t u d e of financial i n s t i t u t i o n s and a
' s o f t ' merger p o h c y , a n d b y t h o s e specific t o t h e f o o d sector, including c o n s u m e r
a c c e p t a n c e o f processed f o o d s a n d t h e i m p a c t o f h y g i e n e a n d effluent regulations
o n smaller a n d older processing p l a n t s . Excessive specialization in sectors of un­
certain p r o f i t a b i h t y h a s h a r m e d t h e g r o w t h a n d profitability o f s o m e firms ( R a s t o i n ,
1 9 7 3 ) , a n d m o s t large f o o d m a n u f a c t u r e r s e x h i b i t substantial i n t r a s e c t o r a l diversi­
fication ( U N C T C , 1 9 8 1 ) . Mergers a n d acquisitions have b e e n t h e principal r o u t e t o
c o r p o r a t e g r o w t h , a l t h o u g h a n u m b e r of d y n a m i c m e d i u m - s i z e d firms have emerged
in r e c e n t d e c a d e s .
H o r s t ( 1 9 7 4 ) analysed t h e g r o w t h p a t t e r n s of large U S food-processing firms in
t h e p e r i o d p r i o r t o 1 9 5 0 (see also D o c u m e n t a t i o n F r a n c a i s e , 1 9 7 6 ) . H e identified
four strategies of achieving m o n o p o h s i t c or oügopolistic c o n t r o l in specific sub-
s e c t o r s . T h e m e a t p a c k e r s ( n o t a b l y Swift a n d A r m o u r ) secured their d o m i n a n c e b y
c o n t r o l o f t h e d i s t r i b u t i o n s y s t e m w h i c h linked s t o c k y a r d s t o individual b u t c h e r s '
s t o r e s . F i r m s s u c h as B o r d e n ( c a n n e d m i l k ) a n d C a m p b e l l S o u p ( c o n d e n s e d s o u p )
achieved leadership b y their i n n o v a t o r y processing t e c h n o l o g y . H e i n z ' s success
w i t h its m o r e t h a n ' 5 7 varieties' rested o n t h e singlemindedness of its sales effort.
Kellogg's d o m i n a n c e of breakfast cereals w a s u l t i m a t e l y based o n s a t u r a t i o n adver­
tising, a l t h o u g h p a t e n t e d p r o d u c t i o n t e c h n o l o g y also h a d an early role. C o r p o r a t e
c o n c e n t r a t i o n in these s u b s e c t o r s w a s well a d v a n c e d b y 1 9 1 4 : t h e e m e r g e n c e of
large, w i d e l y diversified f o o d c o m p a n i e s s u c h as G e n e r a l F o o d s a n d S t a n d a r d
B r a n d s w a s p a r t o f t h e b r o a d e r merger b o o m o f t h e 1 9 2 0 s . T o these a n d similar
 Iain Wallace 505

c o m p a n i e s ( s u c h as Nestle) for w h i c h f o o d processing w a s t h e initial core business

can be a d d e d those w h i c h have achieved s t a t u r e in t h e f o o d i n d u s t r y o n t h e basis of
b r o a d e r initial interests in c o m m o d i t y t r a d e , shipping, a n d finance. C o m p a n i e s
such as Unilever, w h i c h developed w i t h i n t h e f r a m e w o r k of E u r o p e a n imperialism
and were involved in t h e e s t a b U s h m e n t o f tropical p l a n t a t i o n s , are characteristic of
this g r o u p , a l t h o u g h a n u m b e r of U S c o m p a n i e s have similar origins ( U N C T C ,
1981;Chalmin, 1980; Fieldhouse, 1978).
R e c e n t British e x p e r i e n c e , w h i c h is n o t a t y p i c a l , indicates t h a t f o o d m a n u ­
facturing is n o t o u t s t a n d i n g l y p r o f i t a b l e , a l t h o u g h sUghtly m o r e so t h a n m a n u ­
facturing as a w h o l e ( A s h b y , 1 9 8 3 ; Hairy et al., 1 9 7 3 b ) . T h e largest f o o d firms are
therefore showing an increasing willingness t o shift i n t o a n d o u t of f o o d p r o d u c t i o n
or o t h e r lines of business in t h e Ught of their s h o r t - t e r m revenue p r o s p e c t s ( U N C T C ,
1 9 8 1 ) . A t t h e same t i m e , m a n u f a c t u r i n g c o m p a n i e s w h o s e core business is far
r e m o v e d from the agri-food s y s t e m , such as Boeing a n d V o l k s w a g e n , have m a d e
specific i n v e s t m e n t s in agribusiness ( D o r e l , 1 9 7 6 ; G a r r e a u , 1 9 7 7 ; Vogeler, 1 9 8 1 ) .
T h e t e n d e n c y for major f o o d firms t o a b a n d o n activities in w h i c h p r o d u c t
differentiation and b r a n d n a m e advertising have p r o v e d unsuccessful a n d m a r k e t
shares unreUable h a s b o t h i n s t i t u t i o n a l a n d spatial expressions. D i r y ( 1 9 7 9 ) n o t e s
t r e n d s in t h e F r e n c h agri-food system w h e r e b y t h e private sector d o m i n a t e s t h e
high value-added and high-profit b r a n c h e s , w h e r e a s basic processing o p e r a t i o n s
w h i c h tie u p large a m o u n t s o f fixed capital b u t have relatively l o w value-added
characteristics, such as slaughtering and fluid m i l k c o l l e c t i o n , are increasingly con­
c e n t r a t e d in t h e h a n d s of c o o p e r a t i v e s . Boulet a n d Faillenet ( 1 9 7 3 ) n o t e a c o m ­
parable p o l a r i z a t i o n in t h e w i n e i n d u s t r y . F a r from c o m p e t i n g w i t h t h e private
sector, t h e c o o p e r a t i v e s o f t e n appear m o r e as a necessary b u t clearly s u b o r d i n a t e
c o m p l e m e n t t o t h e g r o w t h of large private c o r p o r a t i o n s , a n d their role is certainly
m o r e d o m i n a n t in peripheral t h a n core regions. N o u y r i t ( 1 9 7 6 , 2 0 ) n o t e s t h a t
following t h e p u r c h a s e b u t s u b s e q u e n t r a t i o n a l i z a t i o n b y Unilever o f s o m e F r e n c h
dairy c o m p a n i e s , disposed of because of t h e p o o r profitability of this sector, ' t h e
co-operatives were u n d e r a general m o r a l o b l i g a t i o n t o t a k e over t h e s e c o l l e c t i o n
areas again at t h e request of t h e p r o d u c e r s ' . T h e state a u t h o r i t i e s , a l t h o u g h n o
d o u b t glad t o see c o o p e r a t i v e s fulfil a social welfare role Uke this, have m e a n w h i l e
pursued a p o h c y of 'progressive d i s e n g a g e m e n t . . . from directly m a n a g i n g o u t p u t
in t h e major m i l k p r o d u c i n g regions in s t e p w i t h t h e c o n c e n t r a t i o n of t h e process­
ing i n d u s t r y i n t o firms or regional g r o u p s sufficiently large t o t a k e over from p u b l i c
agencies [with respect t o i n d u s t r y r e g u l a t i o n , credit provision, e t c . ] ' (Hairy et al.,
1 9 7 3 a , 2 2 7 0 - 7 1 , m y t r a n s l a t i o n ) . N o u y r i t ( 1 9 7 6 ) p o i n t s t o t h e similarly cir­
cumscribed role of c o o p e r a t i v e s in t h e U S grain t r a d e . T h e s t r u c t u r a l difficulties
w h i c h cooperatives e n c o u n t e r in a t t e m p t i n g t o c o m p e t e w i t h t r a n s n a t i o n a l agri­
business c o r p o r a t i o n s are o u t l i n e d b y Bénetiére ( 1 9 7 6 ) a n d N o u y r i t ( 1 9 7 6 ) . A t
least w i t h respect t o t h e dairy p r o d u c t s i n d u s t r y , t h e y c o n c l u d e t h a t ' f o r m i n g
p a r t n e r s h i p s w i t h t h e m u l t i - n a t i o n a l s is t h e b e s t w a y co-operatives c o u l d set a b o u t
limiting their o w n g r o w t h ' ( N o u y r i t , 1 9 7 6 , 2 0 ) .

T h e w i t h d r a w a l of t h e largest f o o d c o r p o r a t i o n s from direct i n v o l v e m e n t in basic

506 Towards a geography of agribusiness

processing a n d t h e p r o d u c t i o n of u n d i f f e r e n t i a t e d goods is c o n f i r m e d by their

p a t t e r n s of foreign i n v e s t m e n t . O n t h e face of it, a tecimologically m a t u r e industry
w i t h a relatively s t a n d a r d i z e d range of p r o d u c t s d o e s n o t fit t h e image of an active
foreign investor. N o t o n l y d o f o o d f h m s display l o w R & D i n t e n s i t y , H o r s t ( 1 9 7 4 )
n o t e d t h a t t h e y w e r e t h e o n l y b r a n c h of U S i n d u s t r y in w h i c h R & D spending
increased less t h a n p r o p o r t i o n a t e l y t o firm sales. Within t h e E E C , Unilever alone
e m p l o y s m o r e t h a n o n e q u a r t e r of f o o d firms' research w o r k e r s ( O E C D , 1982).
Nevertheless, h o m e m a r k e t s c h a r a c t e r i z e d b y high levels of c o r p o r a t e concentra­
t i o n a n d in w h i c h individual firms already have a major m a r k e t share c o n s t i t u t e a
major incentive for e x p a n d i n g a b r o a d , even i n t o structurally similar m a r k e t s , as
d e m o n s t r a t e d b y C a n a d i a n a n d E u r o p e a n firms e n t e r i n g t h e U n i t e d S t a t e s ( C o n n o r ,
1 9 8 1 ) . I n w a r d foreign direct i n v e s t m e n t i n t o t h a t c o u n t r y is c o n c e n t r a t e d in sectors
w i t h highly differentiated p r o d u c t s , including alcoholic beverages, c o n f e c t i o n e r y ,
snack f o o d s , a n d m a r g a r i n e , a n d is reflected in a foreign-owned food firm advertising-
to-sales r a t i o a l m o s t t h r e e t i m e s higher t h a n t h e U S food i n d u s t r y average. T h e
high barrier t o e n t r y w h i c h m a r k e t i n g costs o n this scale r e p r e s e n t is n o d e t e r r e n t
t o t h e domestically w e l l - e n t r e n c h e d o l i g o p o h s t s w h o s e efforts are r e w a r d e d b y sales
in t h e U S m a r k e t w h i c h are large in a b s o l u t e t e r m s . T h e same p a t t e r n of sectoral
c o n c e n t r a t i o n b y foreign investors has also b e e n d o c u m e n t e d in t h e M e d i t e r r a n e a n
region ( R a s t o i n , 1 9 7 7 ) .

3 Food distribution and retailing

E v e n in n a t i o n s s u c h as t h e U n i t e d S t a t e s , t h e U n i t e d K i n g d o m , and C a n a d a , where
f o o d o u t l a y s ( i n c l u d i n g p u r c h a s e d meals) are in t h e o r d e r of o n l y o n e fifth of
c o n s u m e r e x p e n d i t u r e , f o o d prices are generally t h e m o s t poUtically sensitive
of all retail prices. T h e f o o d price inflation o f t h e m i d - 1 9 7 0 s , and its c o m p l e x
i n t e r d e p e n d e n c i e s w i t h o t h e r inflationary pressures, p r o m p t e d p o p u l i s t (People's
F o o d C o m m i s s i o n , 1 9 8 0 ) a n d official inquiries ( s u c h as t h e studies of C a n a d a ' s
F o o d Prices Review B o a r d ) i n t o t h e agri-food s y s t e m , a n d t h e revival of state regu­
l a t i o n of t h e price of basic foodstuffs (see R e e k i e , 1 9 7 8 , o n b r e a d in Britain).
PopuUst c o m m e n t a t o r s d r e w u p o n l a t e n t pubUc s y m p a t h y for farmers b y p o i n t i n g
t o t h e w i d e discrepancy b e t w e e n farm gate and f o o d s t o r e prices, t h e r e b y imph-
cating oligopolistic e x p l o i t a t i o n b y large f o o d m a n u f a c t u r e r s and d i s t r i b u t o r s . In
fact, c o m p e t i t i v e r e l a t i o n s h i p s in t h e agribusiness system d o w n s t r e a m of the farm
are q u i t e c o m p l e x , a n d t h e divergence of farm and retail prices is m o r e a reflection
of t h e m t r m s i c c h a r a c t e r of t h e c o n t e m p o r a r y w e s t e r n f o o d s y s t e m , w i t h its stress
o n p r o c e s s e d , p a c k a g e d , ' c o n v e n i e n c e ' f o o d s , t h a n o n oligopoly profits p u r e and
simple ( B u r n s et al., 1 9 8 3 ) . This is n o t t o d e n y t h a t t h e l a t t e r exist, for t h e y have
b e e n d e m o n s t r a t e d , n o r t o d o w n p l a y t h e degree t o w h i c h the entire food system
is s h a p e d b y t h e p r o f i t m o t i v e .
Given t h a t h o u s e h o l d f o o d p u r c h a s e s r e p r e s e n t low o r d e r g o o d s w i t h i n central
place s y s t e m s , t h e degree of c o m p e t i t i o n in local retail m a r k e t s is one of t h e m o r e
critical issues w i t h i n t h e entire agribusiness s y s t e m . F o o d retailing is increasingly
 Jain Wallace 507

d o m i n a t e d b y large ' m u l t i p l e s ' or ' c h a i n s ' , firms of n a t i o n a l or macro-regional

scale whose m a r k e t p o w e r h a s g r o w n , since t h e 1 9 5 0 s , a t t h e e x p e n s e of f o o d p r o ­
cessors and m a n u f a c t u r e r s , as well as of small retailers. A firm's m a r k e t share is a
key d e t e r m i n a n t of its profitability, a n d this is m o s t a p p r o p r i a t e l y m e a s u r e d at
t h e level of individual m e t r o p o U t a n areas. ' I n at least s o m e m a r k e t s , t h e t y p i c a l
large chain enjoys a b o v e - n o r m a l profits t h a t enable it t o engage in cross-subsidization
t o e n h a n c e or m a i n t a i n its p o s i t i o n in o t h e r m a r k e t s ' ( M a r i o n , 1 9 7 9 , 3 9 ) . U S
a n t i t r u s t agencies have t a k e n only limited a c t i o n t o p r e v e n t t h e c r e a t i o n o f localized
m a r k e t d o m i n a n c e , b u t in w e s t e r n C a n a d a t h e u r b a n h e g e m o n y of C a n a d a Safeway
has a t t r a c t e d stronger state i n t e r v e n t i o n ( M a r i o n , 1 9 7 9 ) . M a n y m e t r o p o l i t a n
m a r k e t s in N o r t h A m e r i c a a n d in t h e U n i t e d K i n g d o m r e m a i n strongly c o m p e t i ­
tive, h o w e v e r , a n d major retailers o p e r a t i n g o n very n a r r o w profit m a r g i n s e x e r t
d o w n w a r d pressure o n prices charged b y f o o d processors a n d m a n p f a c t u r e r s .
T h e claim t h a t 'nearly all t h e largest f o o d retailers of E u r o p e , N o r t h A m e r i c a
and J a p a n have . . . integrated u p s t r e a m i n t o processing' ( U N C T C , 1 9 8 1 , 7) is
qualified b y Marion ( 1 9 7 9 ) , w h o s e d a t a indicate t h a t c h a i n s ' m a n u f a c t u r i n g is
heavily c o n c e n t r a t e d in perishables ( b r e a d , fluid milk, m e a t ) . In o t h e r p r o d u c t
lines, O w n l a b e l ' b r a n d s ( g o o d s m a n u f a c t u r e d b y small or m e d i u m - s i z e d i n d e p e n d ­
e n t firms b u t sold u n d e r the retailer's private label) are s t o c k e d in c o m p e t i t i o n
with t h e equivalent i t e m p r o d u c e d by major b r a n d n a m e m a n u f a c t u r e r s . Marion
( 1 9 7 9 ) f o u n d an average 12 p e r c e n t price differential b e t w e e n o w n label a n d b r a n d
n a m e g o o d s , a n d Parker a n d C o n n o r ( 1 9 7 9 ) , arguing t h a t t h e f o r m e r ' s prices are
a p p r o x i m a t e l y ' c o m p e t i t i v e ' , suggest t h a t m o n o p o l y overpricing b y t h e leading U S
food m a n u f a c t u r e r s e x c e e d e d $ 1 2 bilUon in 1 9 7 5 . Insofar as t h e m a r k e t p o w e r of
the major food retailers w o r k s in t h e interests o f t h e c o n s u m e r , t h e accessibility of
their stores t o l o w - i n c o m e g r o u p s , b o t h in rural a n d inner-city areas, raises i m p o r t ­
ant welfare c o n s i d e r a t i o n s .

V Agribusiness technology

Every e l e m e n t of the agribusiness system is associated w i t h a specific b u n d l e of

technologies and n o a t t e m p t is m a d e h e r e t o review t h e m all. A s m i g h t be e x p e c t e d
in a large a n d long-established i n d u s t r y , t h e agri-food sector overall e x h i b i t s rela­
tively m a t u r e t e c h n o l o g i e s , b o t h u p s t r e a m of farm o p e r a f i o n s (e.g. t r a c t o r s ) a n d
d o w n s t r e a m (e.g. f o o d c a n n i n g ) . Nevertheless, it is easy t o d i s c o u n t t h e s t r e a m of
new t e c h n i q u e s w h e r e b y f o o d processing and m a n u f a c t u r i n g have b e e n t r a n s f o r m e d
over r e c e n t d e c a d e s t h r o u g h such d e v e l o p m e n t s as rapid freezing, d e h y d r a t i o n , a n d
v a c u u m packaging (Blanchfield, 1 9 8 3 ) . Technological affinity b e t w e e n , for i n s t a n c e ,
food and d r i n k p r o d u c t i o n a n d t h e p r e p a r a t i o n of p h a r m a c e u t i c a l p r o d u c t s has
p r o m o t e d t e c h n o l o g y transfer ( J a m e s , 1 9 7 7 ) . G r e a t e s t i n t e r e s t a n d greatest u n ­
c e r t a i n t y , h o w e v e r , are c u r r e n t l y associated w i t h t h e r e v o l u t i o n a r y i m p a c t t h a t
b i o t e c h n o l o g y (including g e n e t i c engineering) could have o n t h e entire agribusiness
system ( B u t t e l etal., 1983;Kenney e r a / . , 1 9 8 3 ; K l o p p e n b u r g a n d Kenney, 1 9 8 4 ) .
508 Towards a geography of agribusmess

T h e major p e t r o c h e m i c a l a n d p h a r m a c e u t i c a l firms were first a t t r a c t e d t o

b i o t e c h n o l o g y b y its p r o m i s e of i m p r o v i n g existing p r o d u c t s a n d increasing the
efficiency of p r o d u c t i o n processes. T h e i n v o l v e m e n t of these firms' in t h e agri­
business s y s t e m s o o n alerted t h e m , h o w e v e r , t o t h e convergence of agricultural
c h e m i s t r y w i t h t h e b i o c h e m i s t r y of p l a n t breeding. ' B i o t e c h n o l o g y p r o m i s e d to
increase greatly t h e speed a n d efficiency o f germ-plasm evaluation . . . a n d [had t h e
p o t e n t i a l ] t o b e applied d i r e c t l y t o m o d i f y m g p l a n t a n d animal organisms' (Buttel
etal., 1 9 8 3 , 1 3 3 ) . I n d e e d clonal p r o p a g a t i o n can p r o d u c e disease-free p l a n t material
in o n e t h i r t i e t h of t h e t i m e r e q u i r e d t o g r o w o u t p l a n t i n g stock a n d this h a s already
h a d a c o m m e r c i a l i m p a c t o n s o m e c r o p s . B u t t h e greatest a t t r a c t i o n of biotech­
n o l o g y t o t h e leading agribusiness t r a n s n a t i o n a l s is t h a t :

It should be possible to move genes controlling particular features between varieties and
even between species; that is . . . wholly circumvent [ing] conventional barriers of genetic
incompatibility . . . to actually design novel plant varieties engineered to meet specific
economic goals (Kloppenbuig and Kenney, 1984, S).

N o t o n l y are t h e c o m m e r c i a l impUcations of successful genetic engineering likely

t o b e p r o f o u n d , progress in this field raises ethical (especially w i t h respect t o ani­
m a l s ) a n d pubUc i n t e r e s t q u e s t i o n s w h i c h have scarcely b e g u n t o receive sustained
analysis b u t w h i c h m a y p r o m p t legal a n d legislative i n t e r v e n t i o n (The Economist,
2 6 May 1 9 8 4 ) . M e a n w h i l e , K l o p p e n b u r g a n d K e n n e y ( 1 9 8 4 , 1) suggest t h a t 'a
major r e s t r u c t u r i n g o f t h e agricultural s e c t o r ' is already u n d e r w a y . It is character­
ized b y :
a) increasing c o r p o r a t e c o n c e n t r a t i o n a m o n g agribusiness firms, involving in
p a r t i c u l a r t h e rapid b u y i n g u p b y t h e p e t r o c h e m i c a l a n d p h a r m a c e u t i c a l majors
o f i n d e p e n d e n t seed f i r m s ;
b ) u n p r e c e d e n t e d leverage over farm o p e r a t i o n s b y these agricultural i n p u t sup­
pliers. ( T h e seed is itself t h e e n d - p r o d u c t of t h e e n t i r e R & D p r o g r a m ' ( K l o p p e n -
b u r g a n d K e n n e y , 1 9 8 4 , 5 ) : it is ' n o w t h e g a t e w a y t o c o n t r o l over t h e p r o d u c t i o n
p r o c e s s as a w h o l e ' ( K e n n e y et al., 1 9 8 3 , 4 8 1 ) ) ;
c) particularly in t h e U n i t e d S t a t e s , t h e r e s t r u c t u r i n g of t h e agricultural research
c o m m u n i t y t o reserve c o m m e r c i a l l y attractive w o r k for t h e private s e c t o r ;
d ) ' r e c o g n i t i o n o f t h e . . . strategic i m p o r t a n c e o f . . . c o n t r o l over genetic resources'
(Kloppenburg and Kenney, 1984, 2); and
e ) specific i m p l i c a t i o n s for t h e t h i r d w o r l d of these d e v e l o p m e n t s .
A t t h e p r e s e n t t i m e t h e r e is a wide diversity o f b i o t e c h n o l o g i e s u n d e r investigation,
each o n e of t h e m possibly of great benefit t o agricultural p r o d u c e r s . B u t t e l et al.
( 1 9 8 3 , 1 3 9 ) are c o n c e r n e d , h o w e v e r , t h a t biotechnology-intensive agribusiness
c o r p o r a t i o n s will m a r k e t n e w p l a n t varieties as p a r t of a ' p a c k a g e ' w i t h a m a t c h i n g
suite o f p r o p r i e t o r y c h e m i c a l s , a n d so "will tie farmers m o r e securely t o p u r c h a s e d
i n p u t s r a t h e r t h a n liberating t h e m ' . T h e y n o t e , m o r e o v e r , t h a t t h e flow of funding
i n t o b i o t e c h n o l o g y is at t h e e x p e n s e of agroecological research, w h i c h m i g h t prove
of great public benefit b u t w h i c h yields few p r o p r i e t a r y c o m m o d i t i e s (see Merril,
1976).
It is t o o early t o assess t h e c o m m e r c i a l agricultural viability of m o s t c u r r e n t
 Iain Wallace 509

research, let alone t h e speed a n d e x t e n t of a d o p t i o n of its p r o d u c t s . It is already

clear, h o w e v e r , t h a t b i o t e c h n o l o g y t h r e a t e n s t h e political e c o n o m y of agriculture
w i t h major u p h e a v a l s . W h a t if p a l m oil does p r o v e ' c o n v e r t i b l e t o c o c o a oil t h r o u g h
t h e use o f genetically engineered b a c t e r i a ? ' ( K e n n e y et al., 1 9 8 3 , 4 8 4 ) . W h a t if
AustraUan sheep can b e m a d e t o s u r r e n d e r their fleeces w i t h o u t t h e n e e d for
shearers? {Financial Times, 6 J u n e 1 9 8 4 ) . Overall, applied b i o t e c h n o l o g y m a k e s for
a m o r e capital-intensive a n d less labour-intensive p r o d u c t i o n p r o c e s s t h a n conven­
tional a g r i c u l t u r e ; a n d b y e n c o u r a g i n g t h e closer m o n i t o r i n g of c r o p a n d animal
g r o w t h it p r o m o t e s t h e greater on-farm use o f e l e c t r o n i c d a t a r e c o r d i n g a n d analys­
ing t e c h n i q u e s ( K l o p p e n b u r g a n d K e n n e y , 1 9 8 4 ) . E v e n b e f o r e sustained research
in b i o t e c h n o l o g y was in progress or t h e a p p l i c a t i o n of m i c r o e l e c t r o n i c s h a d dif­
fused t o its c u r r e n t e x t e n t , it w a s being suggested t h a t

the farm of 2000 may he. comparable to the fuel-cracking plant of today . . . miles of pipe,
technical production processes, tanks, and gauges, with a few skilled workers superviaing
the whole operation (Hemmi, 1978,127, quoting Cockrane, 1970).

Nevertheless, it w a s claimed, t h e s t r u c t u r e of family farming can survive!

VI Conclusion

We have a t t e m p t e d t o clarify t h e c o n c e p t of 'agribusiness', t o suggest angles o f

inquiry from w h i c h geographers could usefully s t u d y it, a n d t o provide a brief
overview of s o m e of t h e literature w h i c h h a s b e g u n t o t h r o w light o n its character­
istics in industrialized w e s t e r n e c o n o m i e s . O u r p r e s e n t k n o w l e d g e is clearly frag­
m e n t a r y , a n d t h e r e are m a n y links in t h e agribusiness s y t e m w h i c h have scarcely
been t o u c h e d o n . F o r i n s t a n c e , even in t h e t r a d i t i o n a l farm e c o n o m y , credit is a
central f e a t u r e , b u t t h e role of b a n k s has a t t r a c t e d w i d e s p r e a d a t t e n t i o n o n l y
w h e n e c o n o m i c c o n d i t i o n s have led t o a n o t i c e a b l e increase in farm foreclosures, as
t h e y did in t h e 1 9 3 0 s a n d early 1 9 8 0 s . Given t h e e n o r m o u s increase in t h e capital­
ization n e e d e d t o s u p p o r t profitable farm o p e r a t i o n s t o d a y , t h e direct influence
of financial i n s t i t u t i o n s h a s a l m o s t certainly increased, b u t w e have scant k n o w ­
ledge of it. E n o u g h is a p p a r e n t , h o w e v e r , t o e n c o u r a g e and o r i e n t a t e a greater
c o n c e n t r a t i o n of research effort in this field.

Department of Geography, Carleton University, Ottawa, Canada

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