A new analysis has found that geopolitical turmoil has handed agrifood corporations a windfall, while driving hunger, deforestation, and rural poverty worldwide.
Global food corporations have used the cover of geopolitical disruption to squeeze higher profits from consumers by raising prices, consolidate market power, and push smaller competitors to the wall, according to a new report by the International Panel of Experts on Sustainable Food Systems (IPES-Food).
The report, The New Geopolitics of Food, documents how trade wars, military conflicts, and the breakdown of international institutions have not simply raised costs, they have created opportunities for dominant firms to widen their margins at the expense of the public.
Since 2008, a wave of mega-mergers has shrunk the number of leading seed and agrochemical companies from six to four, while concentration has risen across virtually every other segment of the food supply chain. As food price inflation surged after 2020, some of those dominant firms appear to have raised consumer prices beyond what their own cost increases warranted, due to thin competition in those markets.
The evidence was striking in part because some companies have effectively admitted it. The report gives the example of US grocery giant Kroger attempting, unsuccessfully, to acquire rival Albertsons, and acknowledging in proceedings that it had inflated the consumer price of milk and eggs beyond the level of its own cost increases.
Grocery retailers in the US, Canada, and Japan all recorded profit increases between 2020 and 2022, suggesting widespread use of market instability to pad margins.
The disruptions are rooted in a cascade of geopolitical shocks: Russia’s invasion of Ukraine in 2022 destabilised global grain supplies, US trade wars have upended agricultural export markets across the Global South, and recent military strikes on Iran and Iran’s retaliation across the region have threatened shipping through the Strait of Hormuz, through which over a third of the world’s fertiliser exports pass.
The ripple effects
The pattern repeated itself in fertilisers: the spike in prices during 2021 and 2022 coincided with rising profits for leading firms in the sector, and fertiliser giant Nutrien explicitly stated in its 2021 annual report that it had raised prices beyond the increase in its own production costs.
The consequences ripple far beyond supermarket shelves. Trade disputes between the United States and China have pushed Beijing to seek alternative soybean suppliers in South America, spurring Brazil to expand production into the Cerrado — one of the world’s most biodiverse savannas. The report links that expansion directly to deforestation, increased agricultural chemical use, human rights violations, and rising local food prices that squeeze the very smallholder farmers the expansion nominally benefits.