Emma Olde Bijvank
University of Groningen
DECLARATION BY CANDIDATE
I hereby declare that this thesis, “Understanding the role of Multinational Food and Beverages Companies towards increased dietary dependency in emerging markets leading to changing dietary patterns and increasing obesity“, is my own work and my own effort and that it has not been accepted anywhere else for the award of any other degree or diploma. Where sources of information have been used, they have been acknowledged.
Name: Emma Frederika Hermina Olde Bijvank Date: 30 June 2014
Signature:
Understanding the role of Multinational Food and Beverages Companies towards
increased dietary dependency in emerging markets leading to changing dietary
patterns and increasing obesity.
An illustrative case study of Brazil’s dietary dependency towards Nestlé
Master thesisInternational Political Economy
International Relations and International Organization
Emma (E.F.H.) Olde Bijvank Luttenbergerweg 52 8105 RV Luttenberg e.oldebijvank@gmail.com 0646137704 s1806602
With supervision of: Dr. N.W. Voelkner 2nd reader:
Foreword
On an individual level, it is advised to eat a variety of food products and a balanced amount. Although it is no problem to eat cake at a birthday party, it is widely known that eating only cake everyday makes one gain weight and can possibly lead to diet related diseases In the same way one could reflect on the health of a country. As such, it makes sense that growing one crop only, does not benefit a countries’ health, both on for its people and environment. It seems however, that as the scale of a problem rises and long-‐term goals need to be taken into account, it is more difficult to designate the causes of problems. The same holds for studying obesity on a country or a global level.
Good food, good life is the slogan of Nestlé, and the question raised on the front page of this thesis. Food is and will always be discussion of debate as it affects all people living on this planet. What is on the menu for dinner depends on culture and environment, but also economics and politics are involved. For that reason dietary intake around the world is always subject to change. As everybody is involved in food issues, it has been a pleasure discussing my thesis with friends and family. Discussions varied from people’s individual responsibility towards health, drinking milk as a consequence of the EU common agricultural policy, and the consequences of future urbanisation. This thesis shows the relevance of international political economy when addressing food issues. It helps the reader to understand how its individual food pattern is created within International Political Economy. As such it helps to determine what is good food and how this affects a good life for people around the world.
Table of Content
FOREWORD ... 3
LIST OF ABBREVIATIONS ... 6
INTRODUCTION ... 7
1.
MACRO LEVEL DRIVERS OF OBESITY ... 12
1.1.
DIETARY DEPENDENCY ... 12
1.2.
URBANISATION AND ECONOMIC DEVELOPMENT ... 13
1.3.
TRADE LIBERALIZATION ... 15
1.4.
AGRICULTURAL SUBSIDIES ... 17
1.5.
INTERNATIONAL ORGANIZATIONS ... 18
1.6.
INCREASING PRESENCE OF BIG FOOD ... 20
1.7.
CONCLUDING REMARKS ... 21
2.
THE INFLUENCE OF BIG FOOD ... 23
2.1
FRAMEWORK ON INDIVIDUAL DIETARY CHOICES ... 24
2.2
PROCESSED FOOD ... 26
2.3
INDIFFERENCE ... 30
2.4
SATURATION ... 30
2.5
INDIVIDUAL CHOICE ... 32
2.6
CONCLUDING REMARKS ... 34
3.
BIG FOOD IN BRAZIL ... 35
3.1.
RESEARCH FRAMEWORK ... 36
3.1.1.
HYPOTHESIS ... 36
3.1.2.
RESEARCH METHOD ... 36
3.2.
DIETARY DEPENDENCY IN BRAZIL ... 37
3.2.1.
URBANISATION AND ECONOMIC DEVELOPMENT ... 40
3.2.2.
CONSEQUENCES OF TRADE LIBERALIZATION ... 41
3.3.
THE MULTINATIONAL FOOD COMPANY NESTLÉ ... 43
3.4.
NESTLÉ IN BRAZIL ... 45
3.4.1.
PRICE ... 45
3.4.2.
AVAILABILITY ... 46
3.4.3.
MARKETING ... 47
3.5.
BRAZIL’S DEPENDENCY TOWARDS NESTLÉ ... 51
3.6.
CONCLUDING REMARKS ... 53
CONCLUSION ... 54
REFERENCES ... 58
ANNEX 1: PATTERNS OF THE NUTRITION TRANSITION ... 71
ANNEX 2: AVAILABLE FOOD PRODUCTS OF NESTLÉ IN BRAZIL ... 73
List of Abbreviations
AoA Agreement of Agriculture
Big Food Multinational Food and Beverages Companies BMI Body Mass Index
BOP Bottom of the Pyramid
DR-‐NCDs Diet Related Non-‐Communicable diseases CSR Corporate Social Responsibility
CSV Created Shared Value EU European Union
FAO Food and Agricultural Organisation FDI Foreign Direct Investment
HICs High Income Countries HFCS High Fructose Corn Syrup
IGO International Governmental Organisation IMF International Monetary Fund
IPE International Political Economy LMICs Low and Middle-‐Income countries MDG Millennium Development Goal
MFBC Multinational Food and Beverages Companies MNEs Multinational Enterprises
NAFTA North American Free Trade Agreement NTBs non-‐tariff barriers
PAHO Pan American Health Organization PPP Popularly Positioned Products SAP Structural Adjustment Programme UN United Nations
UNDP United Nations Development Programme USA United States of America
Introduction
‘Today, many of the threats to health that contribute to non-‐communicable diseases come from corporations that are big, rich, and powerful, driven by commercial interests and far less friendly to health. … Currently more than half of the world’s population lives in an urban setting. Slums need corner food stores that sell fresh products, not just packaged junk with a cheap price and a long shelf life’.1
These are the words of Margaret Chan, World Health Organization (WHO) Director-‐General, in April 2011 on the First Global Ministerial Conference on Health Lifestyles and Non-‐communicable Disease Control. Nowadays, one billion adults are overweight and at least 300 million people clinically obese.2 The global burden of diet-‐related non-‐communicable diseases (DR-‐NCDs, or
simplified non communicable diseases), such as obesity,3 diabetes, cardiovascular diseases, cancer,
dental diseases, and osteoporosis, is rising.4 Non-‐communicable diseases are not passed from
person to person, are of long duration and generally slow in progression.5 Physical inactivity and an
unhealthy diet lead to metabolic changes that increase the risk of non-‐communicable diseases.6 Also
the use of tobacco and alcohol plays a role in developing chronic diseases.
Especially in low and middle-‐income countries (LMICs)7 the problem of overweight and obesity is a growing. The dominant explanation for increasing obesity is perceived as a misbalance in the energy consumption of an individual. Whereas energy intake would be too high, energy expenditure, in other words physical activity, too low.8 In general it is believed that fatness is a result
of wrong individual choices towards food consumption. Also genetic factors are an explanation of susceptibility to obesity.9 This however, does not explain the significant changes in consumption and
rising obesity rates in emerging markets lately. Academics speak of a nutrition transition, referring to
1 Chan, “WHO | The Rise of Chronic Non-‐communicable Diseases.”
2 “WHO | Non-‐communicable Diseases Damage Health, Including Economic Health.”
3 The WHO defines overweight and obesity as a condition of abnormal or excessive fat accumulation in adipose tissue, to the extent that health may be impaired. The WHO uses the Body Mass Index (BMI) to classify
overweight and obesity, respectively a BMI of 25, and 30. See “WHO | Obesity and Overweight.” 4 Chan, “WHO | The Rise of Chronic Non-‐communicable Diseases.”
5 “WHO | Non-‐communicable Diseases.”
6 Examples of non-‐communicable diseases are raising blood pressure, overweight/obesity, hyperglycemia (high blood glucose levels) and hyperlipidemia (high levels of fat in the blood).
7 In this thesis, the concept of LMICs is used in a broad context. It refers to all countries not considered as Western. It is based on a classification is made by the WorldBank. For a precise description one can visit the website of the World Bank. http://data.worldbank.org/about/country-‐classifications
8 Obesity in Britain, 437.
the shift in dietary consumption and energy expenditure that coincides with economic, demographic and epidemiological changes.10
Globalisation11 and urbanisation12 are factors influencing nutrition transition.13 Between
1960 and 2000 the population living in urban areas doubled from 21.6 per cent to 40.4 per cent in developing countries.14 At present, more than half of the word population lives in urban areas.15 In
addition to urbanisation and economic development, deregulation of markets led to an increased presence of multinational food and beverages companies (MFBCs or Big Food16) in emerging
countries. Increasingly they focus on LMICs’ markets, as there is a major room for market expansion.17 Big Food is aiming for, and achieving double-‐digit growth.18 In this way Big Food is
rapidly displacing traditional and long established dietary patterns and food systems. Therefore, it is important to understand their increasing role in dietary patterns in LMICs.
Trade liberalization gave room for multinational food companies to expand. Furthermore, the food industry is increasingly led by a few enterprises. A few of the biggest are Coca-‐Cola, DANONE, Nestlé, PepsiCo and Unilever.19 The impact of Big Food in LMICs involves a wider debate
about the consequences of globalisation and the deregulation of markets. It involves a critical perspective on the current economic system and its potential limitations. Opening markets to trade can increase the price of traditional, healthy foods in resource-‐poor countries and potentially price them out of the market. When rich countries subsidize oils, fat, and sugar, they put farmers and small businesses in poor countries at a competitive disadvantage as well as provide incentives for people to make unhealthy dietary choices. The exact impact of in Big Food on diets however, is
10 Mendez and Popkin, “Globalisation, Urbanisation and Nutritional Change in the Developing World,” 200. 11 Globalisation can be defined as ‘the increasing integration of the world in terms of communications, culture, and economics’. Goldstein, International Relations, 546. For a more detailed review on the concept of
globalisation and its influence on society one could study Baylis, Smith, and Owens, The Globalisation of World Politics.
12 Urbanisation is the process of people moving from rural areas to cities. The main reason for people to move to cities is a lack of employment and food security. For the most part, rich countries are already urbanized, and most of the expected urban growth will occur in less-‐developed regions, which have fewer resources for coping with the scale of the change. From United Nations Population Fund, “Linking Population, Poverty, and Development”; “State of World Population 2007 -‐ Online Report.”
13 Globalisation of Food Systems in Developing Countries. And Mendez and Popkin, “Globalisation, Urbanisation and Nutritional Change in the Developing World,” 220.
14 World Urbanisation Prospects, the 2011 Revision. 15 Enhancing Urban Safety and Security, 6; ibid., 68.
16 The term Big Food refers to the transnational and other large food corporations that increasingly control the production and distribution of ultra-‐processed products throughout the world. These products are created from substances extracted from whole foods such as the cheap parts or remnants of animals, inexpensive ingredients such as refined starches, sugars, fats and oils, preservatives, and other additives.
17 Passport Global Market Information Database: EuroMonitor International. 18 Stuckler et al., “Manufacturing Epidemics,” 1.
‘complex, under researched and poorly understood’.20 In research on obesity economic forces and
power relations towards have only rarely been addressed.21
An exception however, is the model of dietary dependency, developed by David Stuckler and Karen Siegel. The theory of dietary dependency offers a good link between trade liberalization, the rise of MFBCs, changes in dietary patterns and increasing obesity rates. It bridges health and economics. In short, dietary dependency is ‘a process by which food choices come to depend on choices of governments, producers, and multinational companies. Current models of economic development foster this dependency. These models emphasize trade liberalization, export-‐oriented agriculture, and foreign direct investment in foods and beverage sectors, especially in the context of unregulated marketing and governmental subsidies’.22
Contrary to high-‐income countries (HICs)23, governments of LMICs are facing a ‘double
burden’ of disease. While they continue to deal with problems of infectious diseases and under nutrition, they are experiencing a rapid upsurge in diet related non-‐communicable diseases.24 In
LMICs, it is not uncommon to find under nutrition and obesity existing side-‐by-‐side within the same country, the same community, and even within the same household.25 Healthcare services are often
limited, which means that treatment is expensive and difficult. This is a complex position, as increasing costs are influencing the whole society. For example, it impacts productivity and employment rates. A few academic researchers state that medical costs of illnesses due to non-‐ communicable diseases can have serious influence on economies of China, India, and many other LMICs.26 There are twice as many obese people in poor countries as in rich ones. Respectively, 904
million compared to 557 million.27 The inequality is striking and can affect sustainable development
in emerging markets. For that reason, attention for this problem is much needed.
In emerging markets like Brazil, China, India, Mexico, and South Africa, rapid economic growth is creating major opportunities for human development. This however comes with rapid and radical disruptions to their populations’ traditional ways of life. While the countries’ historical circumstances are unique and varied, they face a shared threat to the sustainability of their
20 Rayner et al., “Trade Liberalization and the Diet Transition,” 73.
21 Albritton, Let Them Eat Junk How Capitalism Creates Hunger and Obesity; Chopra and Darnton-‐Hill, Tobacco and Obesity Epidemics; Guthman, Weighing in; Wells, “Obesity as Malnutrition.”
22 Stuckler and Siegel, Sick Societies, 41.
23 High-‐income countries are defined by the World Bank as a country with a gross national income per capita above US$12,615 in 2012. According to the World Bank there are 76 countries (including territories) classified as ‘high-‐income economies’.
24Infectious diseases can be spread, directly or indirectly, from one person to another. It is caused by micro-‐ organisms such as bacteria, viruses or parasites. “WHO in general, global health needs are evolving from a focus on infectious diseases to chronic diseases. “WHO
25 “WHO | Obesity and Overweight.” 26 Popkin, The World Is Fat, 94–95.
development posed by rising obesity and diet-‐related diseases. Although, a comparative country analysis would help identify key drivers for obesity, a single country case study on Brazil also gives an idea of the obesity causes in emerging countries facing similar public health challenges that come with economic growth.
Also, as mentioned country specific research is limited and differs in research methods and detail, which makes a comparison between countries hard. Therefore, it is challenging to draw general empirical conclusions. Whereas the theory of dietary dependency provides a set of clues and puzzles for public health, this thesis conducts a single country case study to test the theory of dietary dependency and to provide detailed insights on the exact influence of Big Food in LMICs in practise. Literature review showed that Brazil, an emerging market with a middle-‐income status, is researched most extensively and is therefore most suitable for this research.28 Contrary to other
emerging markets like South-‐Africa, China, and India, fatness is not seen as a sign of prosperity in Brazil.29 Still, research showed obesity increased over the last years significantly. Between 1975 and
2003, the prevalence of obesity increased from 2.7% to 8.8% among men and from 7.4% to 13% among women.30 Nowadays about 60 million people in Brazil are overweight. To research the
specific role of Big Food, the case study focus on multinational food company. This limitation is based on market share of multinational food and beverages companies. Nestlé has been selected as it has the biggest market share in Brazil and it is the leading food cooperation in the world.31
The increasing problems in emerging countries together with the increasing role of Big Food on dietary intake, led to the following research question:
“How do Multinational Food and Beverages Companies contribute to increased dietary dependency in emerging markets leading to rising obesity? An analysis of Brazil’s dietary dependency
towards Nestlé.”
To research and formulate a clear answer to this question, this literature research is split up in several parts. The first chapter answers the sub question ‘how can the change in food patterns and the rise of obesity in emerging markets be explained?’ Relevant literature in the field of study will be discussed to understand the dominant explanations of increasing obesity rates. The theory of
28 Monteiro, “Nutrition and Health. The Issue Is Not Food, nor Nutrients, so Much as Processing”; Stuckler et al., “Manufacturing Epidemics”; Monteiro and Cannon, “The Impact of Transnational ‘Big Food’ Companies on the South.”
29 Stuckler et al., “Manufacturing Epidemics,” 234.
dietary dependency will be introduced as the leading theory to explain the changes in dietary patterns in emerging markets.
The second chapter will focus on the role of Big Food explicitly. It will formulate an answer to the sub question ‘how do Multinational Food and Beverages companies increasingly influence individuals’ dietary choices?’ The impact of processed foods is discussed, and a new distinction of food groups is explained. In addition, it is discussed how the link between Big Food and increasing obesity can be understood within the broader economic system. Only a few scholars linked the increasing rates of obesity within the broader economic system. The authors used in this thesis are critical towards the current system, and use the work of Marx to explain malfunctions of the current predominant neoliberal system. Three concepts are discussed that show the importance of addressing the obesity problem with a holistic point of view. These concepts complement the theory of dietary dependency and provide a political economic understanding of obesity. Together, the additional theory provided in the second chapter and the theory of dietary dependency, form the basis of the case study. As such, it is called the extended theory of dietary dependency. Combining these theories helps
The last chapter is the case study. Conducting a case study is important to understand the exact role of Big Food in emerging countries. A single-‐country study is chosen and a further limitation is made on Nestlé. What should be recognized is that conclusions made from single-‐country studies are less secure than those made from comparative case studies. Nevertheless, this illustrative case study is useful to provide contextual description, confirm and infirm theories, and explain theories in practise. 32 Also, it gains insights about comparative cases, like the strategy of other multinational
food companies in similar emerging markets. Based on Nestlé’s annual report and Created Shared Value reports, an analysis is made on Nestlé’s products and its nutrition policy towards overweight and obesity. The result of this research can be used to gain knowledge about the situation in Brazil. Moreover, it increases ones understanding of the position of Big Food in emerging countries.
With the theory of dietary dependency explained, and positioning causes of obesity within the current economic system, this thesis provides insights on how Multinational Food and Beverage Companies contribute to increased dietary dependency in emerging markets leading to rising obesity. The case study on Nestlé in Brazil not only provides insights on Brazil, is gives one a general understanding of strategies to position food. Furthermore, this research develops a new framework to research the role of Big Food in countries. As such, the so-‐called extended theory of dietary dependency can be used as a starting point for similar research on the role of Big Food.
1. Macro Level Drivers of Obesity
‘Because of the multiple shared paths through which urbanisation and globalisation may influence food availability and choices in developing countries, it is difficult to unravel effects of the two sets of forces on diet and health’ stated Kennedy, Nantel, and Shetty in the FAO nutrition paper about the globalisation of food systems.33 Whereas scholars agree on a change in diet and an increase in
overweight, obesity and diet related non-‐communicable diseases, the underlying causes are more difficult to designate. In order to structure the various influences Kennedy et al., Stuckler and Siegel,34 and Labonté, Mohindra, and Lencucha35 developed frameworks of the main drivers to
changes in food system. Whereas Kennedy et al. distinguish impact and outcome of changes in the foodsystem, Stuckler and Siegel provide a circle diagram to explain underlying causes of DR-‐NCDs in their book Sick Societies.36 Furthermore, they explain how individual dietary choices are influenced.
Labonté et al. developed a framework specifically focussed on the relation between international trade treaties and DR-‐NCDs. This chapter answers the question how changes in food patterns and the rise of obesity in emerging markets can be explained. By reviewing and comparing available literature, it is discussed what driving forces behind obesity are. First, it touches upon direct impacts like urbanisation and changes in income, thereafter, underlying causes like trade liberalization, agricultural subsidies, and treaties are discussed.
1.1. Dietary Dependency
Nutrition transition happens because of a complex combination of trade liberalization, transformation of agriculture, rising incomes, urbanisation, and the growing influence of multinational food and beverages companies. Stuckler and Siegel define these global macroeconomic processes as dietary dependency, summarized in the five statements below.
1. “Trade liberalization leads to greater intercountry dietary dependence.
2. Foreign direct investment in food and beverages in developing economies favours less healthy products
33 Globalisation of Food Systems in Developing Countries, 2. 34 Stuckler and Siegel, Sick Societies.
3. Export-‐oriented agriculture increases the dependence on western dietary goods and products of foreign food and beverages companies; technological change speeds up this process.
4. Advertising and marketing strategies of multinational companies influence persons in less developed countries to prefer Western products as their income rise.
5. Urbanisation, which is partly driven by agricultural reforms, lead to less active lifestyles and shifts food consumption away from home.” 37
Stuckler and Siegel argue that this dependency has tended to be beneficial for rich countries although governments continue to subsidize sugar, salts, and fats. They estimate that about 25% of dietary change is related to cultural factors, modern advertising, and other elements affecting food choice and dietary patterning; 30% to the economic forces of food and price changes; 30% to technological shifts linked with reduced energy expenditures at work, travel, home food processing, and leisure; and the remainder, 15%, to urbanisation.38 The next paragraphs further elaborate on
the five statements above.
1.2. Urbanisation and Economic development
Barry Popkin, Professor in Nutrition, argued that economic development pushes populations through a nutrition transition from under nutrition to over nutrition.39 An increase in income would
lead to shifting food preferences from traditional diets characterised by low salt, saturated fat, and glycaemic indexes, towards less healthy western diets40 that lead to obesity and associated
diseases.41 Recent studies however, showed that not higher income, but poverty may be a key risk
factor for consumption of unhealthy commodities.42 It is argued that poverty makes one buy cheap,
unhealthy foods.
Urbanisation is another driving force leading to decreased access to healthy food, less physical activity, and a more passive leisure time.43 At the moment half of the world population lives
37 Stuckler and Siegel, Sick Societies, 41.
38 Stuckler and Siegel, Sick SocietiesResponding to the Global Challenge of Chronic Disease, 77.
39 Popkin, “The Nutrition Transition and Its Health Implications in Lower-‐Income Countries,” 5; Popkin, “Part II. What Is Unique about the Experience in Lower-‐and Middle-‐Income Less-‐Industrialised Countries Compared with the Very-‐Highincome Industrialised Countries?,” 205. Popkin developed five stage of transition, a copy of these stages can be found in Annex 1: Patterns of the nutrition transition.
40 A diet low in salt, saturated fat, and glycaemic indexes is considered as healthy. In general, Western diets are considered as high in salt, saturated fat, and glycaemic indexes.
41 Popkin, “The Nutrition Transition and Its Health Implications in Lower-‐Income Countries,” 6.
42 Stuckler et al., “Manufacturing Epidemics,” 1; Ezzati et al., “Rethinking the ‘Diseases of Affluence’ Paradigm,” 0404.
in urban areas.44 Recent (2011) estimates state that the world urban population is expected to
increase with 72% by 2050, bringing the total number of urban dwellers to 6.3 billion people. Especially in LMICs most urban growth is expected.45 Related to dietary changes and increase in
obesity Popkin also argued that urbanisation leads to obesity.46 Furthermore, in urban areas people
are more exposed to advertisements and street sales. Also women employment is higher, which means that families usually have less time to prepare food. As a result, people tend to eat more in restaurants and consume fast-‐food and ready-‐to-‐eat meals.47 From this perspective, urbanisation is
a driving force behind increasing overweight in LMICs. However, rising obesity is not a phenomenon seen in cities only. When comparing urban and rural areas it seems that obesity in urban areas is higher at first stage. However, over time rural areas adapt to urban dietary patterns that are higher in fats and lower in vegetable consumption. The pace of adaptation depends on the level of urbanisation, infrastructure, and resources.48
The cause of urbanisation in developing countries is often related to renewed agricultural methods, also known as the green revolution.49 The green revolution is a term to describe the breakthrough in food production of new wheat and rice varieties developed in the 1960s. Although several traits are associated with the significant increases in yield potential of green revolution varieties of wheat and rice, the most important factor was plant height reduction achieved through the incorporation of specific genes for short stature. Together with the reductions in growth duration, this allowed cropping intensity to be increased to two or three crops a year.50 Although it brings innovation and increases crop yield, it might undermine smaller farms and causes forced migration of the rural poor urban areas. Often these people end up in slums without work, money, and possibility to buy healthy food. Also, their poverty is further exacerbated by poor sanitation, lack of hygiene, and crime associated with slums.51
Already one out of three urbanites worldwide (one billion people) lives in a slum, and it are expected that by 2020 one half of the world’s urban population will be living in slums or shantytowns.52
Agricultural subsidies play a role in urban migration. During the first ten years of the NAFTA,
44 Enhancing Urban Safety and Security, 9.
45 World Urbanisation Prospects, the 2011 Revision.
46 Popkin, “Urbanisation, Lifestyle Changes and the Nutrition Transition”; Chow et al., “Environmental and Societal Influences Acting on Cardiovascular Risk Factors and Disease at a Population Level: A Review”; Subramanian and Smith, “Patterns, Distribution, and Determinants of under-‐ and Overnutrition”; Agyemang et al., “Blood Pressure Patterns in Rural, Semi-‐Urban and Urban Children in the Ashanti Region of Ghana, West Africa.”
47 Popkin, “Urbanisation, Lifestyle Changes and the Nutrition Transition,” 1905.
48 Mendez and Popkin, “Globalisation, Urbanisation and Nutritional Change in the Developing World,” 235. 49 For a explanation of the green revolution in more detail see McKinney, Schoch, and Yonavjak, Environmental Science, 350.
50 Davies, “An Historical Perspective from the Green Revolution to the Gene Revolution,” 124. 51 Albritton, Let Them Eat Junk How Capitalism Creates Hunger and Obesity, 107.
1,175,000 Mexicans were displaced from agriculture largely as a result of highly subsidized American agricultural commodities (especially corn) flooding into Mexico.53 In the fourth paragraph of this
chapter the influence of agricultural subsidies is discussed in more detail.
In sum, nutrition transition is partly driven by urbanisation and economic development. In some cases urbanisation and economic development have a positive influence on health. For most of the people in emerging countries however, it has led to less active lifestyles and limited access to healthy food.
1.3. Trade Liberalization
Globalisation of the world economy has led to a relocation of transnational manufacturing centres to developing countries with cheap labour and access to raw materials. Opening up markets influences the food system of a country. In a positive way, it can increase availability of food and lower retail prices of products. Deregulation stimulated the global spread of supermarkets that can offer safe, packaged, and cheap food.54 Demand for supermarkets raised because of urbanisation, women into
work, and economic growth. Facilitated by trade liberalization, multinational food companies answered this demand by foreign direct investment and food imports.55 Trade liberalization affects
the food chain through food imports and exports, an alternating balance between global and local produced foods, and Foreign Direct Investment (FDI) in food processing and retail and commercial promotion of food.56 This can be either positive by providing nutritious food or health damaging
when food is highly processed.57 The subparagraphs below elaborate on this.
LMICs experience shifts in food imports because of trade liberalization. Large increases in import in processed grain products, while export in unprocessed bulk grains has declined.58 Over
years, multinational food enterprises consolidated into a few big concerns, selling mainly packaged food. Because of scale advantages, big food companies can buy agricultural products at lower cost. This could be beneficial as it can sell food for a lower price in LMICs. However, increasing imports can displace domestic producers and manufacturers.59 Consequently, local revenues for food
producers decline significantly. Also, if local food crops are displaced, an increase of dependency on foreign companies is seen. Due to this increased dependency of foreign products, it is more difficult
53 Campbell et al., “Mexico’s Corn Farmers See Their Livelihoods Wither Away / Cheap U.S. Produce Pushes down Prices under Free-‐Trade Pact.”
54 Bolling and Somwaru, “Global Food Trade -‐ U.S. Food Companies Access Foreign Markets Through Direct Investment”; Reardon, “The Rapid Rise of Supermarkets in Latin America.”
55 Rayner et al., “Trade Liberalization and the Diet Transition,” 70. 56 Ibid.
57 Labonté, Mohindra, and Lencucha, “Framing International Trade and Chronic Disease,” 7.
to introduce regulations constraining market growth of foreign products or raising corporate taxes to foreign multinational food companies.
Not only imports of food, also FDI plays a critical role in diet transition. FDI can increase trade in products (raw or finished) by investing in domestic production, which can create employment and economic activity. However, at the same time price competition will rise, and marketing and promotion leads to increase of consumption. In line with this, Hawkes argues that it is debatable whether FDI is required as Multinational Food Companies mainly produce highly processed foods.60
Apart from food imports and FDI, trade liberalization influences food exports. To stimulate economic growth, institutions like the UN and WTO recommend LMICs growing agricultural crops for export. Several high-‐income countries entered into long-‐term land lease arrangements with poorer, indebted countries to grow food specifically to meet the needs of high-‐income nations.61 Critics
argue that the focus on these ‘cash crops’62 decreases land available for domestic crops and thus
reduces the production of traditional food crops for local diets.63 Examples of cash crops are coffee,
tea, cotton, and tobacco. On the question of food crops versus cash crops has been much debate. Some argue that cash crops replace food crops, and causes decline in food production. However, some evidence shows that in areas where cash crop production has increased, so too has food crop production.
Putting this debate aside, it is seen that the increasing dependence on imports and FDI has led to a decline in consumption of traditional food crops and often a decline in the prestige of traditional foods.64 Export-‐oriented agriculture and trade specialization models increase the
dependence on Western dietary goods and products of Big Food.65 Stuckler and McKee concluded
that LMICs experiencing the highest exposure to unhealthy commodities are not just those in which economic growth is occurring most rapidly, but those in which such development is occurring in the context of food systems that are highly penetrated by foreign multinationals.66 The next paragraph
further discusses how trade liberalization and government policy influenced changing dietary patterns.
60 Hawkes, “The Role of Foreign Direct Investment in the Nutrition Transition.”
61 Labonté, Mohindra, and Lencucha, “Framing International Trade and Chronic Disease,” 4.
62In that sense they are not really competitive. For a discussion about food and cash crops one could study Waibel, “Government Intervention in Crop Protection in Developing Countries.”
63 Thow, “Trade Liberalisation and the Nutrition Transition,” 2150. 64 Ibid.
1.4. Agricultural Subsidies
While international trade of food and food products has increased due to trade liberalisation, so have the level of subsidies provided to agricultural producers in high-‐income countries with much of their products going to export markets. Protectionism 67 is antithetical to the idea of free trade.
However, it is not a matter of economics solely, they are also matters of politics. Some trade policy analysts to argue that the high level of subsidies can be viewed as dumping, defined in trade terms as goods entering a foreign market at less than normal prices.68 As such, subsidies damage the value
of food exports from developing countries by suppressing world prices.
It is argued that agricultural subsidies affect dietary intake as well. Michael Pollan, a well-‐ known author in the field studied the effect of processed food, argues that subsidies on corn and soy stimulate obesity. As example he refers to the omnipresence of highly subsidized corn in fast-‐food meals in the form of high-‐fructose corn syrup, a product used to sweeten soda.69 Also subsidies on
beet and corn encouraged the food industry to use more sugar in the production of certain food products. In the United States, the inflated sugar prices due to government protection of approximately $2 billion a year subsidize a small number of large sugar companies. It seems contradicting that citizens pay taxes in order to subsidize corporations making profit by producing food with low nutritional value for the same taxpayers.70 To that extent, one might argue that
eliminating subsidies might stop the increase of obesity.
Labonté et al. discuss the possibility of eliminating European and American subsidies on unhealthy food products. On the one hand, abrogating subsidies is likely to benefit health as it discourages the use of commodities related to weight gain like sugar. However, one should not forget that some LMICs have become net-‐food importers. As a result of population growth, loss of arable land, and years of stimulating advice to shift from food products for domestic consumption to non-‐food cash crops for export, LMICs now rely on foreign countries to secure enough food for its population.71
Guthman counter argues the assumption that commodity subsidies lead to obesity. First of all, because growing fresh fruits and vegetables is more expensive than harvesting primary ingredients for snack food like potatoes, corn, and wheat, she states.72 For one dollar a US citizen
67 ‘Protectionism is the practice of employing economic devices to restrict or distort trade and to benefit domestic producers. There are numerous forms of protection, notably tariffs, import quotas and other non-‐ tariff barriers, such as preferential procurement arrangement and export taxes.’ For a more detailed explanation see Hughes & O’Neill 2008, 168-‐194).
68 Anderson et al., “The Cost of Rich (and Poor) Country Protection to Developing Countries.” 69 Pollan, The Omnivore’s Dilemma.
70 Albritton, Let Them Eat Junk How Capitalism Creates Hunger and Obesity, 100.
could buy 1,200 calories of cookies or potato chips but only 250 calories of carrots.73 More
importantly is the tremendous power of processors, retailers, and food services, which have used their power to pressure farmers, fishers and ranchers to provide products at ever-‐lower prices. Not the actual products but the political influence are most harming, according to Guthman.74 This
influence is not only seen in policy directly related to food and agriculture but also in taxation, financial regulation, and economic development policies.75
Agricultural subsides can cause farmers moving from food crops to cash crops. Monoculture cash cropping for export agriculture often benefits multinational food companies, at the expense of family food production of those growing the crops, who are then obliged to rely on cheap food imports.76 In most countries, the past three decades of neoliberal policy have resulted in cutting
back support for people who produce food for domestic markets.77 Apart from workers in
agriculture, Guthman argues that working circumstances in the food processing and food service industry are below standard. In Fast Food Nation examples are given how the US food service industry keeps labour costs down.78 This is a documentary about the American fast-‐food industry.
Next to showing the bad quality of food produced, it reveals how low wageworkers come to depend on cheap goods to make ends meet. In this light, supersizing begins to take on a different moral valence. Not only in the food service sector, also lower down the supply chain food companies seem to influence peoples life and indirectly their food pattern. For now it is important to understand that governmental bodies initiate agricultural subsidies, however influenced by other international organizations and business. To get a better understanding of this international playing field, the next paragraphs elaborate on players in the field of food and international public health.
1.5. International Organizations
In 2002, the WHO and WTO prepared a joint report on public health implications of trade.79 This
report noted that trade agreements do take some account of health, permitting national trade-‐ restrictive measures that protect human health but only those that are the least trade-‐restrictive compared to any other measure. The report concluded that ‘there is common ground between
73 Drewnowski and Specter, “Special Articles -‐ Poverty and Obesity,” 9.
74 The sugar lobby is influential, and keeps their dominant position by for example financing election campaigns In the US they made mayor campaign contributions of $3.1 million to the 2004 federal election campaign. See documentary McKenna, “Big Sugar” Sweet, White & Deadly".
75 Guthman, Weighing in, 173.
76 Moradi and Baten, “Inequality in Sub-‐Saharan Africa New Data and New Insights from Anthropometric Estimates”; Rosset, “Preventing hunger,” 472.
77 Rosset, “Food Sovereignty and Alternative Paradigms to Confront Land Grabbing and the Food and Climate Crises.”
78 Schlosser, Fast Food Nation.
