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 The Invisible Giant: Cargill and Its Transnational Strategies
http://www.whyhunger.org/news-and-alerts/why-speaks/510.html
THE WHY SPEAKS BOOK REVIEW

Agribusiness corporations have achieved enormous power in our present food 
system. We need to know how they operate. WHY Speaks is therefore gratified 
to reprint, with permission from CropChoice, Mary Hendrickson's review of 
Brewster Kneen's book on agribusiness giant Cargill.

The Invisible Giant: Cargill and Its Transnational Strategies, 2nd edition, 
2002. Brewster Kneen. Pluto: London and New Sterling, Virginia.
Reviewed by Mary Hendrickson, Ph.D., University of Missouri, for CropChoice

Anything one person wanted to know about Cargill - the world's largest grain 
trader, the largest privately held US company, one of the world's largest 
salt traders - can be found in one handy source, Brewster Kneen's Invisible 
Giant . An update of his 1995 Cargill expose of the same name, this book 
contains information on every aspect of Cargill's business - the known ones 
like grain trading and the obscure ones like salt and financial derivatives. 
It isn't hard to imagine that few people besides Cargill President Warren 
Staley and his top managers know more about Cargill's business than the 
Canadian farmer and writer, Brewster Kneen. As he demonstrates in tracking 
down corporate offices and conducting interviews with Cargill salesmen and 
middle managers across the world, few inside or outside the company know the 
extensive reach of Cargill.

This book is intended to be "an outsider's guide to understanding how Cargill 
works, where it has been and where it is going." (1) The second edition of 
this book was motivated by Kneen's "renewed interest in the broad issue of 
increasing corporate concentration and control in every economic sector, but 
particularly in agribusinesses." (2) Kneen has proved an incredibly diligent 
researcher, logging onto Cargill's websites and looking for company press 
releases, talking to academics, reading trade journals, monitoring business 
magazines, and interviewing Cargill employees - all of which has become much 
more difficult since Invisible Giant was first published in 1995.

This is a book of stories, strategies and information about one transnational 
corporation compiled into a somewhat indigestible whole. What is Cargill 
exactly? Who is Cargill? Where is Cargill? Perhaps more importantly, who 
resists Cargill?

As many know, Cargill is an agribusiness giant operating across the globe. 
This mutant giant "continues to mutate, always with the objective of 
expanding the control of its business interests and our food." (3) It is 
involved in beef production and processing, pork production and processing, 
grain trading, cotton trading, fertilizer, feeds, peanuts, malting, sugar, 
corn milling, flour milling, transportation, storage, financial tools, orange 
juice, and e-commerce. Cargill controls ten percent of the world's salt 
production, is the largest cattle feeder in the US, provides one out of four 
further processed poultry products eaten in the UK, owns Costa Rica's largest 
meat processor, owns two of the five major cotton exporters in the US, has 30 
percent of Europe's market in glucose and high-fructose corn syrup, is the 
largest purchaser of China's corn products, and maintains large meat 
processing and feed facilities in Indonesia and Thailand.

Cargill produces 7 percent of the total US phosphate fertilizer supply, is 
the second largest phosphate fertilizer producer in the world, built one of 
the largest nitrogen fertilizer plants in the world in conjunction with the 
Saskatchewan government, ships about 42 percent of all US corn exports, 31 
percent of soybeans, and 18 percent of wheat. Cargill Brazil - from where it, 
along with two other companies, provides 53 percent of the world's orange 
juice - is second only in size to Cargill's US operations. Remember, too, 
that this is the largest privately owned company in the US.

So who is Cargill? Still essentially a family company, "in 1986, it was 
reported that Cargill's $2.6 billion in shareholder equity was held by fewer 
than 50 descendants of the Cargills and MacMillans, and 450 others, all 
current members of the company's management, who received about $10 million a 
year in dividends." (4) With such valuable assets concentrated among so few, 
Cargill is able to invest in - itself! "Cargill says that since 1981 it has 
reinvested 87 percent of its cash flow, with only 3 percent of the company's 
profits being paid out in dividends." (5) The essential aspect of what 
started as an upper Midwestern company that has grown and prospered for over 
100 years is its flexibility and adaptability. Kneen calls these management 
structures "highly fluid....Cargill is neither structurally nor ideologically 
rigid." (6) In other words, those who would try to pigeonhole Cargill do so 
at their own peril. While flexible and adaptable, Kneen finds that Cargill's 
"structure and business are contradictory to decentralization and 
self-provisioning." (7)

The details of this book are fascinating. However, the service Kneen provides 
is to lay out clearly the strategies a transnational agribusiness like 
Cargill uses to retain profitability and dominance. First, is the beachhead 
strategy. Cargill is a master at testing the water and seeing what happens. 
"The company's operating philosophy throughout the world is to begin with 
reasonably small capital investments...and to grow our business from that 
small beginning." (8) In other words, is this an industry sector or 
geographical region that is good for the firm's profitability?

Second, the firm employs a valuable ecological perspective. In this vision, 
political jurisdictions are of little relevance as compared to the economics 
of inland waterways, crop production areas, climate and population centers. 
If only we would pay attention, the implications of such a perspective are 
indeed stark - especially as to how farmers, farm organizations and policy 
makers view exports. This could be one of the most important points in the 
book - Cargill's single-minded determination to view the world economically 
and not politically suggests a conflict with "free trade" ideology promoted 
in many circles. As Kneen puts it, "They live everywhere and nowhere in the 
world of markets." (9) Moreover, "Cargill appears to devote far more energy 
to establishing favourable national or regional business climates...than it 
devotes to international trade agreements. (It) has been developing its own 
internal global trading arrangements far longer than the World Bank and 
International Monetary Fund have been around." (10)

A third strategy that Kneen attributes to Cargill is not particularly unique 
- the use of public money whenever possible to subsidize sales, construction 
or acquisitions. The author cites numerous examples from the historical - 
port facilities in Albany and Memphis, to the current - port facilities in 
Vancouver, a fertilizer plant in Saskatchewan, and tax deductions for 
donations of salt ponds to wildlife preserves in California. It helps that 
Cargill is intimately involved in public policy at many different levels in 
the US, Canada and around the world. Cargill presidents chair trade groups, 
are appointed to presidential advisory boards, and steer bills through 
Congress (a la William Pearce). Cargill executives are even appointed to lead 
restructuring efforts in Iraq - as is the case with Daniel Amstutz.

It is clear that Kneen is respectful of Cargill's business acumen, its 
adaptability, it's patience and its unwillingness to act rashly. Indeed the 
author never underestimates the firm. But he does point out some who resist 
the firm's business strategy - from the Japanese and Korean business 
associations who have banded together to defend their territory, to the 
Indian farmers who stormed Cargill's office to protect their seeds. Kneen is 
sure that Cargill is not invincible. Indeed, even Pioneer (since acquired by 
DuPont) won a legal challenge to Cargill's appropriation of genetic material, 
a case that had to be settled before Cargill could sell it's North American 
seed business to Mycogen, a subsidiary of Dow, in 2000.

While Kneen can turn a pithy phrase, the tendency clearly points out his 
political leanings. This is unsettling, because this thoroughly researched 
and documented book is too important a resource to be undermined by any 
critic's claims of lack of objectivity. These small asides do enliven the 
prose, which suffers from density. Discussing financial derivatives or beef 
packing or the Far East market for feed does not lend itself to lively 
writing. Thus, while engaging, the book is difficult to read in one or two 
sittings. There is simply too much information to digest, and that may put 
off some readers. However, the reader who pursues the book to the very end 
will find himself enlightened and well prepared to engage in public debates 
and dialogues about transnational agribusiness.

At the final accounting, that is indeed the most important attribute of the 
book. It brings to the public information that is absolutely critical to 
know, but that is hidden from all but the most diligent researchers. In order 
for all of us to understand and engage in our food and agriculture system, we 
need to have this information. Read it for your own good! And then share it 
with your land-grant university president, agriculture committee staffers or 
your local cooperative elevator operators. Kneen's book deserves wide 
circulation.

(1) P. ix. (2) P. viii. (3) P. 3. (4) P. 27. (5) P. 28. (6) P. 167. (7) P. 
199. (8) P. 109. (9) P. 7. (10) P. 9.

Reprinted with permission of CropChoice. Farm News from Cropchoice is an 
alternative news service for American farmers. Visit 
http://www.cropchoice.com for more information. May be reproduced freely for 
non-commercial purposes and with appropriate credit.