U.N.: These 7 Companies Impede Global Food Security

Rural India.  Source: McKay Savage, via Wikimedia Commons 

Tell me if this sounds about right.

There are billions of starving people worldwide. The main reason is that our population is growing faster than our food supply. Without surplus food donated by wealthier nations, many people would die, especially in sub-Saharan Africa.

You've heard this story before, no?

Well, according to a massive report (pdf link) from the United Nations Conference on Trade and Development, much of this story is patently false. And when it comes to guaranteeing food security throughout the world, there are a handful of companies that stand in the way of achieving this crucial goal.

The real reason people go hungry
We'll get to those companies in a second, but first, let's investigate the claim that the world doesn't have enough food for everyone.

In 2002, the Food and Agriculture Organization of the U.N. estimated that there was more than enough food produced in the world to meet our global needs. Specifically, the group believed that, if divided evenly, available arable land could offer the global population 2,720 calories per person per day. People don't go hungry because the world is running out of food.

Many people, especially urban-dwelling Americans, assume that hunger is most prevalent in the slums of major cities in Asia and Africa. While hunger is certainly no stranger in these areas, a full 70% of the one billion undernourished people in the world actually live in rural areas.

So how do these predominantly Chinese, Indian, and sub-Saharan farmers become so impoverished? For years, they have been encouraged by their governments to produce cash crops for export—often in an unsustainable manner—to provide themselves a steady income. Over time, however, global markets have been flooded with an overabundance of these crops, and these farmers now only receive a pittance of what they need to purchase a balanced diet for their families. Farmers from wealthier countries—generally the ones supplying this overproduction—"can usually call on their governments for compensation (which, for many, represents up to 60 percent of their income)," according to the U.N. report.

In other words, because the world's wealthy countries dump their oversupply in poorer countries, urban elites get access to cheaper foods while massive rural populations are pushed even deeper into poverty.

A plan for sustainable productivity
Though a slew of potential solutions have been proposed, one came up again and again in the U.N. report: sustainable, organic agriculture. Not only would its proliferation provide poorer rural farmers in the third world a more balanced diet, but when applied to industrialized nations the use of sustainable and organic agricultural practices would mitigate many of the effects of climate change.

According to Swiss researchers at the Research Institute of Organic Agriculture, this type of farming has five key benefits: it is highly adaptable to local variabilities; it increases water retention in the soil, making it less susceptible to water stress; biodiversity increases, mitigating the total damage pests and weeds can do; damage from extreme weather events is less extensive; and the chance of total crop loss is virtually eliminated, as nature's inherent balancing helps ensure the survival of at least some of each year's harvest.

Just as significantly, adoption of sustainable and organic farming methods in developed countries would -- by necessity -- create a more diverse base of crops available. While this would drive up the costs of food -- currently at all time lows -- it would also dramatically increase the nutritional value of food, and help mitigate the rampant obesity epidemic in America, one that is caused in part by cheap by-products of corn and soy.

Who's standing in the way?
Now, back to the companies identified in the U.N. report as standing in the way of achieving food security. Monsanto (NYSE: MON  ) , BASF, Bayer, Cargill, DuPont (NYSE: DD  ) , Syngenta (NYSE: SYT  ) , and Dow Chemical (NYSE: DOW  ) are all called out by name.

It would take too long to go through each and every offense named in the report, but take this as an example: "Monsanto and its affiliates lobbied Indonesian legislators in the 1990s to support genetically engineered (GE) crops. In 2005, the firm was fined $1.5 million by the United States Department of Justice for violating the Foreign Corrupt Practices Act by bribing a senior Indonesian Environment Ministry official."

The view from 30,000 feet is clear: these companies represent the majority of worldwide agribusiness. 

Source: United Nations Conference on Trade and Development 

Though some of those names might be hard to read, the biggest chemical companies on the list are Monsanto, DuPont, Syngenta, Bayer, Dow, and BASF -- in that order.  These companies obviously have a huge financial motivation to maintain the status quo.

The problem is that the status quo is largely responsible for the environmental degradation and starvation we have today. Because these companies have enormous resources to influence public policy, they will continue to lobby for what is in their own best interest, to the detriment of poor rural farmers worldwide. The bottom line: None of these companies stands to benefit from a proliferation of organic, sustainable agriculture.

Is there a light at the end of the tunnel?
There aren't any easy answers when trying to untangle what will work best to create a healthier global population. One thing is clear, however: Food will be important in investors' portfolios for decades to come.

And yet, there is one natural resource more valuable than food. It's not gold. Or even oil. But it's more valuable than both of them. Combined. And here's the crazy part: one emerging company already has the market cornered... and stands to make in-the-know investors boatloads of cash. We reveal all in our special 100% FREE report The 21st Century's Most Precious Natural Resource. Just click here for instant access!


Read/Post Comments (35) | Recommend This Article (44)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 24, 2013, at 6:43 PM, cmalek wrote:

    You are making a blanket indictment without providing any proof. All you offer is innuendo.

  • Report this Comment On September 24, 2013, at 7:01 PM, jssiegel wrote:

    Let us not forget the mandate for corn ethanol in US gasoline. Ethanol is a very poor choice for motor fuel due to its low energy density and corrosive properties. Butanol, another type of alcohol, would be much better as a renewable liquid fuel. Besides the use of edible corn as the input, ethanol actually takes more energy to produce and deliver than it produces in the vehicle's engine. Ask your elected representatives why this is allowed, much less mandated, and watch their noses grow..

  • Report this Comment On September 24, 2013, at 7:53 PM, TMFCheesehead wrote:

    @cmalek-

    As I said, there were far too many examples cited in the report to cover in this article, which is why I provided a link to the report.

    That said, the premise remains the same: these companies have a financial incentive to influence legislation that maintains the status quo, which will not help improve global food security.

    Brian Stoffel

  • Report this Comment On September 24, 2013, at 7:54 PM, jrgyardley wrote:

    Yes Brian, and I have a bridge I want to sell you.

  • Report this Comment On September 24, 2013, at 8:25 PM, prginww wrote:

    @jrgyardley

    If you're trying to imply that Brian's points are naive then you're sadly mistaken. I applaud Brian and the Fool for publishing this article, which barely scratches the surface in exposing the deadly chokehold of giant agribusiness. Monsanto is a particularly odious example of corporate greed gutting the health of people worldwide, including right here in the US.

  • Report this Comment On September 24, 2013, at 9:45 PM, todamo13 wrote:

    Monsanto has been very profitable causing untold amounts of harm with Agent Orange, PCBs, Roundup, GMOs, etc, but the truth is finally getting out to enough people to make a difference.

    Americans are waking up to this issue, as you can see by the growth in organic food sales and the rapidly growing movement to label GMOs. The tide is turning on Monsanto and its fellow pesticide makers, and really the entire industrial food production model.

  • Report this Comment On September 24, 2013, at 10:03 PM, todamo13 wrote:

    I just had to come back and say this was a great article about a really important issue, put into a global context. Keep up the good work!

    Hopefully the link will show up, but there was even a funny bit on the Daily Show recently about Monsanto's antics:

    http://www.thedailyshow.com/watch/thu-september-12-2013/mons...

  • Report this Comment On September 25, 2013, at 12:33 AM, AZOASISPOOLS wrote:

    I think the biggest problem is these companies don't want us to know their seeds were used to grow our food and then taxpayers pay to subsidize them. I don't want GE corn and soy in everything I eat but the government makes it so cheap to use food companies use it in everything (almost). Whether or not these companies harm global food security, our legislators should be doing their utmost to protect us and let us be informed. They don't, they seem to be doing their best to protect corporate profits of the food company oligopoly.

  • Report this Comment On September 25, 2013, at 4:53 AM, enginear wrote:

    This looks like a congressional debate... 'you're wrong', 'I'm right', 'These companies are evil', 'you're an idiot'. Even a comedy video to watch!

    Monsanto and the gang of seven 'evil' corporations don't have CEO's that get out of bed in the morning trying to conceive of better ways to make more people hungry (his name's not Lex Luther is it?!??).

    The green revolution which has happened in the last hundred years or so has improved crop yields dramatically, feeding more people than anyone used to believe would be fed (see 'The Population Bomb' by Paul Ehrlich, 1968). It has been a good thing, but distribution has brought people to rail centers (cities) and depopulated rural areas. The subsistence farms of the poor and uneducated have suffered and even gone back to untended land. If those people had used the organic methods advocated by the author they would have been fine. Unfortunately they didn't use good methods in all cases. Slash and burn farms wasted the land (rainforests sometimes) and were soon abandoned. They don't all have county agents to help them improve their methodology'. Digging with sticks makes for a difficult situation.

    I don't want to say the 7 corporations have the holy grail, but lets not throw the baby out with the bathwater. They have made VAST improvements over the years, and if you want to do business in Indonesia without some money for lubrication, you may as well go to live on the moon without oxygen - you won't last long. (You may argue that you shouldn't try to go there, in that case, but it's a truism.)

    People on both sides need to be reasonable. What's 'right' for American society is not necessarily 'right' for Indonesian society, and what's good for people that are genuinely starving is different than what's good for people battling against obesity.

  • Report this Comment On September 25, 2013, at 12:15 PM, maiday2000 wrote:

    So we are blaming Monsanto because several Asian and African governments encouraged their people to grow crops for cash, and now they can't make the same amount of money?

    Sounds to me like you need to blame the governments.

    The rest of this is just fairy tale and pixie dust. I am sure every poor person in rual China is just chomping at the bit to become an organic subsistence farmer! "Oh boy, I can't wait to just barely survive!"

    The economic benefits of organic farming seem obvious to a Prius-driving tech executive in Palo Alto, but in a country with little wealth per capita, the reality is a little different. Does anyone really believe there are a higher percentage of starving people in the world today than 50 years ago? Seriously?

    We aren't going to solve starvation problems with organic farming, and we aren't about to starve to death because of agri-business. In fact, wasn't it the Green God Paul Ehrlich who said about 30 years ago we would all be dead by now becuase of mass starvation?

  • Report this Comment On September 25, 2013, at 1:26 PM, Northisland wrote:

    This article is left wing rubbish. "Sustainable organic" farming techniques will feed the extra billion people coming along in the next 10 years or so?? Pure nonsense. Its scary that political pieces like this are are being promoted as providing investing insights. It calls to question the validity of all Motley Fool opinion pieces. I have been in Ag Research for 30 years and GMOs are the future of world agriculture. Their present and future benefits are astounding. Every investor should be in this sector buying the life science companies the author distains. He does not know what he is talking about.

  • Report this Comment On September 25, 2013, at 2:00 PM, funfundvierzig wrote:

    The "leaders" of DuPont proclaim in PR propaganda they are running a "food" company with the mission of feeding the planet and enhancing "food security". Meanwhile, with their partner, oil giant BP, they gobble up more than 1 million tonnes of wheat annually to manufacture into motor fuel (bad mileage ethanol) in a huge factory in Hull, England. In addition, DuPont feeds food to factories to crank out over-priced corn-made carpets and corn clothes.

    In short, DuPont's flawed and amoral business model, FOOD-to-FUEL & FABRICS destroys human food supplies and inflates the price of food. Classic DuPlicity.

    ...funfun..

  • Report this Comment On September 25, 2013, at 2:08 PM, TMFCheesehead wrote:

    @northisland-

    I encourage you to read the report--or at least part of it (it's huge)--and let me know where the errors in thinking are.

    As it stands right now, current techniques provide an overabundance of food in poor countries that cannot be used while not offering up the nutritional variety needed in a steady human diet. At the same time, various affects of climate change and green house gas emissions can be traced back to our current system of global agriculture.

    Brian Stoffel

  • Report this Comment On September 25, 2013, at 5:55 PM, groggy920 wrote:

    Brian-

    As you mentioned, the report is huge and I’m not going to pretend that I read it all. And I do commend you for linking to the report so that your readers could draw their own conclusions. What I can’t comprehend is how you read 321 pages, from over 45 different reports, and summed it up as a commendation of 7 large Ag companies. There were literally dozens of concepts and areas explored as threats to food security including availability of land, availability of labor, availability of water, protectionist agricultural policies, soil erosion, effects of climate change/contributions to climate change, energy policy, biosecurity, deforestation, etc.

    While being very all-encompassing from a topic standpoint, I found that the positions of organic agricultural and the NGOs who promote organic were grossly overrepresented when you consider that organic agriculture is currently providing 2% of our food. What were grossly underrepresented were the vast scientific consensus viewpoints from mainstream ag researchers.

    The majority of points you made in your article came from only one or two reports in this massive manuscript. The attack on “Big Ag” with the accompanying scary looking “Seed Industry Structure” chart came from an article presented by the Pesticide Action Network North America, which, surprise, surprise, hates Monsanto, Dupont, and Syngenta. This is like asking Rush Limbaugh to comment on the problems of our country – you might just be getting one extreme side of the story.

    In fact, I think that your presenting of this information as coming from a “U.N. report” conveniently misses this quote from page 3:

    “The views expressed in the articles contained in this Review are the personal views of the authors and do not necessarily reflect the positions of their respective organizations or institutions. Therefore, the views expressed in this Review should be attributed to the authors and not to any institution or to UNCTAD or its member States”.

    So PANNA thinks everything wrong with our food system can be blamed on Big Ag. Wow – that’s news!

  • Report this Comment On September 25, 2013, at 6:14 PM, groggy920 wrote:

    Can you say that companies that are spending billions of dollars on R&D are really interested in the status quo?

    While I hate the overused "we have to feed the world" line for being overly simplified in addressing agriculture's mandate, I don't see how anyone can argue that making less food, or making food more expensive, is going to help.

  • Report this Comment On September 25, 2013, at 6:52 PM, Schneidku40 wrote:

    The book "Why Nations Fail" may have some insight on at least part of the reason so many people are hungry. When governments take so much from citizens, the citizens suffer greatly and often go hungry because they can be forced to grow crops that they can't keep or are not nutritous. Some governments won't allow modern agricultural equipment because the increased production will allow the citizens to have more income and better lives, and when that happens they tend to get the courage and strength to revolt and overthrow the dictator or whatever oppressive government is.

  • Report this Comment On September 25, 2013, at 8:00 PM, TMFCheesehead wrote:

    @groggy920-

    I greatly appreciate your taking the time to read over a good chunk of the presentation. A couple of points:

    1. I'm actually writing (some have been submitted but not published, some I am working on, some I have yet to get to) more than one article from the report, so this alone isn't meant to encompass the whole report.

    2. I don't think there's anything particularly misleading about the graph. It is a well known fact that a very small number of companies have a corner on the global seed market. It's whether or not it is viewed as a threatening situation or not that I think you're getting at.

    3. As this is a piece for a site dedicated towards investing, I am hyper aware of areas where publicly traded companies are included. In that respect, the sections that covered these topics stood out in my mind because they represented material that could be conveyed to readers.

    If you're interested, I would be eager to hear your feedback on further articles from the report,

    Best,

    Brian Stoffel

  • Report this Comment On September 26, 2013, at 12:19 PM, MelissainVA wrote:

    Thank you for this article!! Through slick marketing campaigns of companies like Monsanto as well as our own lack of knowledge of where food comes from, we have pushed the entire world's food chain further and further to the brink of unsustainability. This will harm us all in the end.

    As for those who state that Brian's comments are innuendo, do some research. Anyone who works in the International Development world (I do) understands that people do not go hungry due to lack of food. They go hungry due to politics and manipulation by powerful organizations.

    I am so glad to see MF venture into the real world of sustainability.

  • Report this Comment On September 26, 2013, at 12:26 PM, gskinner75006 wrote:

    We turn ours into gas so we can drive for the holiday season! Up yours world.

  • Report this Comment On September 26, 2013, at 12:31 PM, TMFBlacknGold wrote:

    U.N.-sponsored millenium villages would have to disagree that GM crops are bad for local farmers in impoverished nations. Years of data and numerous studies say the same.

    http://www.millenniumvillages.org/field-notes/emerging-from-...

    I have yet to read the report at the heart of this article, but it seems interesting. And contradictory from my understanding of the subject!

    --Maxxwell

  • Report this Comment On September 26, 2013, at 1:06 PM, TMFCheesehead wrote:

    @Maxx-

    Thanks for the input. I think it was an error on my part to make the one example (out of many) include GMOs. In essence, this was the only part of the story that mentioned GMOs.

    Instead, the focus of the article is on sustainable and organic farming practices, their potential benefits, and what stands in the way from it being common practice. GMOs are more of a side-issue, at least as far as this article is considered.

    Brian Stoffel

  • Report this Comment On September 26, 2013, at 2:34 PM, philippalmer wrote:

    Even more dangerous now that Monsanto execs have been appointed to high places in FDA and USDA. And their products, mostly banned in other parts of the world good to go here...lovely

  • Report this Comment On September 26, 2013, at 3:23 PM, hbofbyu wrote:

    This is Mansato in a nutshell:

    1. Dump toxic chemicals, including PCBs, dioxin and glyophosate (Roundup) into the water supply of various nations worldwide.

    2. See a profitable market niche, and begin privatizing the polluted water sources.

    3. Clean up the water and sell it back to the public for a profit.

  • Report this Comment On September 26, 2013, at 3:26 PM, hbofbyu wrote:

    Also, I wouldn't doubt that Mansanto has contributed to the unintentional demise of the bee population.

  • Report this Comment On September 26, 2013, at 4:07 PM, RenegadeIAm wrote:

    Why are the charges levelled against the companies only and not against the Big Government subsidies, regulations, and protections that crush sustainable organic farming?

    Small farms simply cannot compete with all of the crushing rules that are put into place by the government--but Monsanto can.

    Not only can Monstanto afford to comply, they are more than happy to work with Big Government to ADD ADDITIONAL regulations and restrictions that keeps competition from small farms at bay.

    Big Government rules crush the very thing Big Government leftists claim they want: sustainable organic farming.

    Look up Joel Salatin at Polyface Farms for the inside story on this.

  • Report this Comment On September 26, 2013, at 4:13 PM, hbofbyu wrote:

    Big government has no interest in enacting laws and regulations in a vacuum. The companies, their lobbying efforts and indirect payoffs, are the source.

  • Report this Comment On September 26, 2013, at 4:43 PM, TMFLomax wrote:

    Brian, excellent and well-researched article. It absolutely challenges the conventional wisdom that is too long assumed by many investors. And of course, we greatly need more organic and sustainable farming for a better future.

    Keep on keepin' on.

    Alyce

  • Report this Comment On September 26, 2013, at 11:53 PM, blablableh wrote:

    Motley Fool is not the proper forum for this. You need to post this stuff on Huffington Post and The Nation. Motley Fool is losing a lot of credibility by posting this crap.

  • Report this Comment On September 27, 2013, at 12:15 PM, bjlazyl wrote:

    dupont's pioneer seeds has historically

    devoted a portion of there research to developing seeds such as high lisine corn or plants that will grow with less wateror in poorer soil in order to help spread food growing in needy areas corn that grows in illinoise will not grow in africa the article is very short sighted and ill informed

  • Report this Comment On September 27, 2013, at 12:52 PM, patrick0409 wrote:

    To suggest that these companies stand in the way of adequately feeding the worlds populations would seem a bit irresponsible and lacks common sense. Most of the starving populations of the world are in countries that are governed by corrupt dictators, Socialists, war lords, clans, and religious zealots. Very few are willing to join the industrialized world and ask for help and work toward change. They just suck the life from their people and bilk the natural resource revenues. GMO technologies will be the only way that food production can ever hope to feed these populations. If you want to try to survive on your organic food, go plow up your backyard and see if you can come up with enough calories to feed yourself. Me .... I'll gladly embrace the technologies that will allow a nice variety in my diet .

  • Report this Comment On September 27, 2013, at 2:14 PM, Anishinabe wrote:

    A stimulating article, Brian. Many thanks. We, the

    investors, should be able to exert some influence in

    correcting the situation.

    In Mexico, farmers stopped growing corn, because they can't compete with corn sold by the U.S. So, they decided to come where the corn is grown.

    Haitians stopped growing rice because they could not compete with imported rice from here. Many of them decided to come here, too.

    In Guatemala, I have witnessed the misery of a country mismanaged and desperate for land reform and sustainable agriculture. Everyone I have met there wants to come here. They need a Marshall plan. The food problems are complex,

    but publishing facts about the situation can help.

    We must do something as investors to encourage

    better corporate management.

  • Report this Comment On September 27, 2013, at 3:55 PM, GingerMaster wrote:

    I find it comforting that Bryan and his superiors whom permitted this article do not fear the backlash that could be the result of such a bold action. Many truly inspirational scientists,Nobel Prize winners, and powerful professors have been discredited and removed for taking a similar stance.

    All of you who think Roundup(Glyphosate) is a safe over the counter herbicide, think again. My most favorite dog drank no more than 4 ounces of diluted Round-up that trickled out of a leaky trigger on the way to the field. She died frothing at the mouth within 2 hours before i could reach the Vet.

    Round-Up ready Soybeans.No thank you.

    No open pollinated seed,no deal.

    Kudos to Bryan and The Motley Fool Gang

  • Report this Comment On September 27, 2013, at 6:59 PM, cmalek wrote:

    If Big Ag is making the world so unfit to live in, let's go back to the agricultural methods of the 1700s & 1800s. There was no Big Ag, every farm was organically farmed and agriculture could only support one or two billion people.

    Which one of you Big Ag-haters is willing to starve to death for your "organic farming, back to nature" ideals???!!! How many of you Big Ag-haters is willing to play farmer and start raising crops in your backyard to feed your family???!!! All you Pollyannas are assuming that food production will remain at the same level after the switch to all organic farming. Did you ever think that genetically engineered crops, artificial fertilizers and other innovations came about BECAUSE organic farming wasn't providing enough food to feed the population? It's great to be idealistic when you are the one that is not starving.

  • Report this Comment On September 27, 2013, at 9:05 PM, tveb wrote:

    This is without question the most uninformed commentary that I've read on global food and the complex system that has been put in place to solve the problem of feeding the world's burgeoning population. Were it not for Monsanto, Cargill, and the other leading global food system business ventures, the modern technologies that are improving agricultural productivity would still be sitting on some scientist's shelf. Absolute rubbish.

  • Report this Comment On September 27, 2013, at 10:03 PM, TMFCheesehead wrote:

    One point I'd like commenters to consider: increased food production leads to increased population, not the other way around. I'd appreciate one example from nature where one species increased without the requisite food available.

    Once this key aspect is understood, the whole argument is flipped on its head.

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