The Hindu Business Line : Big cos reaping windfall profits from high food prices

NEW DELHI: Big companies like Nestle and Monsanto are benefiting from a food price rise in developing countries and not the small farmers and consumers, an international agency Oxfam said in a report on Thursday.

“Misguided or inadequate national agricultural policies, coupled with unfair trade rules and poor economic advice, has created a situation where big traders and supermarkets are gaining from price rises, and small farmers and consumers are losing out,'' said Mr Teresa Cavero, author of the report 'Double Edged Prices'.

Mr Cavero, who heads Research at Oxfarm, highlighted windfall profits made by some of the biggest international food firms.

He said, “Commodity-trader Bunge saw its profits quadruple in the second quarter of 2008. Nestle's global sales grew nearly by 9 per cent in the first half of 2008, and UK supermarket Tesco's profits rose by 10 per cent from last year.

“Seed company, Monsanto, reported a 26 per cent increase in revenue to a record $3.6 billion in the first quarter ending May, 2008,'' he said.

The report noted that the impact of food inflation has been less severe in countries where governments have invested in agriculture, and put policies in place to target vulnerable and marginalised groups.

In contrast, the effects have been devastating in the countries where there have been unmanaged trade liberalisations, underinvestment in agriculture, and little support from government, it said.

Noting India, the report said, “In India, the impact of increased food prices on poverty is likely to be complex. Poor people such as landless labourers and others spend a large proportion of their incomes on food, will suffer from food price increases a nd are likely to be pushed further into poverty as a result''. - PTI

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