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Cereal Secrets:The world’s largest grain traders and global agriculture

Cereal Secrets:The world’s largest grain traders and global agriculture

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Published by Oxfam
The world’s largest commodity traders have a significant impact on the modern agri-food system. Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus, are dominant traders of grain globally and central to the food system, but their role is poorly understood. This report considers the traders – collectively known as the ABCDs – in relation to several global issues pressing on agriculture: the ‘financialization’ of both commodity trade and agricultural production; the emergence of global competitors to the ABCDs; and some implications of large-scale industrial biofuels, a sector in which the ABCDs are closely involved. The report includes a discussion of how smallholders in developing countries are affected by these changes, and highlights some development policy implications. The report highlights the ways in which these four firms are decisive actors in the global restructuring of the overlapping food, feed, and fuel complexes that is now under way, and considers how the firms are evolving as they respond to and shape new pressures and opportunities in the food system.
The world’s largest commodity traders have a significant impact on the modern agri-food system. Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus, are dominant traders of grain globally and central to the food system, but their role is poorly understood. This report considers the traders – collectively known as the ABCDs – in relation to several global issues pressing on agriculture: the ‘financialization’ of both commodity trade and agricultural production; the emergence of global competitors to the ABCDs; and some implications of large-scale industrial biofuels, a sector in which the ABCDs are closely involved. The report includes a discussion of how smallholders in developing countries are affected by these changes, and highlights some development policy implications. The report highlights the ways in which these four firms are decisive actors in the global restructuring of the overlapping food, feed, and fuel complexes that is now under way, and considers how the firms are evolving as they respond to and shape new pressures and opportunities in the food system.

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Published by: Oxfam on Aug 03, 2012
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05/13/2014

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OXFAM RESEARCH REPORTS AUGUST 2012
Oxfam Research Reports
are written to share research results, to contribute to public debateand to invite feedback on development and humanitarian policy and practice. They do not nec-essarily reflect Oxfam policy positions. The views expressed are those of the authors and notnecessarily those of Oxfam. 
www.oxfam.org
CEREALSECRETS
The world's largest grain traders and globalagriculture
MS. SOPHIA MURPHY
INDEPENDENT CONSULTANT AND SENIOR ADVISOR AT THE INSTITUTEFOR AGRICULTURE AND TRADE POLICY
DR. DAVID BURCH
HONORARY PROFESSOR SOCIOLOGY, THE UNIVERSITY OFQUEENSLAND
DR. JENNIFER CLAPP
PROFESSOR, ENVIRONMENT AND RESOURCE STUDIES ANDINTERNATIONAL AFFAIRS, UNIVERSITY OF WATERLOO
The four big commodity traders
 –
Archer Daniels Midland (ADM), Bunge, Cargill and Louis
Dreyfus, collectively referred to as „the ABCD companies‟ –
are dominant traders of grainglobally and central to the modern agri-food system. This report considers the ABCDs in relationto several global issues pressing on agriculture: the
„financialization‟ of both commodity trade
and agricultural production; the emergence of global competitors to the ABCDs, in particular from Asia; and some of the implications of large-scale industrial biofuels, a sector in which the ABCDs are closely involved. The report includes a discussion of how smallholders in developingcountries are affected by these changes, and highlights some development policy implications,given the importance of the ABCD firms in shaping the world of food and agriculture. The reporthighlights the ways in which these four firms are decisive actors in the global restructuring of theoverlapping food, feed, and fuel complexes that is now under way, and considers how the firmsare evolving as they respond to and shape the new pressures and opportunities in the modernagri-food system.
 
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Cereal Secrets: The world‟s largest commodity traders and global trends in agriculture
 
 
Cereal Secrets: The world‟s largest commodity traders and global trends in agriculture
3
FOREWORD
This research report provides an analysis
of the role and impacts of the world‟s largest
commodity traders on the modern food system. The report was commissioned to supportGROW,
Oxfam‟s
global campaign to deliver food security in a resource-constrained world. Thecampaign, launched in 44 countries over the last year, urges governments, companies and civilsociety to repair 
the world‟s
broken food system, which leaves nearly one billion people hungryevery night, including millions of small-scale farmers and workers who produce much of the
world‟s food.
 The traders are a powerful, unique and poorly understood sector. The major traders, Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus, collectively known as the ABCDtraders, share a significant presence in a range of basic commodities, controlling, for example,as much as 90 per cent of the global grain trade. Other emerging market trading companiessuch as Olam, Sinar Mas and Wilmar are also quickly establishing a global presence.The major traders do not just trade physical commodities
 –
they operate from the farm level allthe way to food manufacturing. They provide seed, fertilizer and agrochemicals to growers, andbuy agricultural outputs and store them in their own facilities. They act as landowners, cattleand poultry producers, food processers, transportation providers, biofuel producers andproviders of financial services in commodity markets. Traders have been integral to thetransformation of food production into a complex, globalized and financialized business. Foodprices, access to scarce resources like land and water, climate change and food security are allaffected by the activities of traders. As traders continue to exert a great deal of influence over the global food system, they shouldbe held accountable to be responsible actors. Traders are a central node in the food system,within which large-scale change is necessary in order to ensure that everyone has enough toeat
 –
today and in the future. Yet notwithstanding the
vast breadth of traders‟
influence andactivities, there is currently limited public information about the traders and their operations. Wehope this report contributes to the increased accountability and transparency of traders, andfurthers an urgent dialogue on making the global food system work for all.
 Jeremy Hobbs,Executive Director, Oxfam International

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