The Global Agri-Food System: An Analysis of Value Capture Dynamics

In the complex landscape of the global agri-food system, a stark inequality is evident: while most agricultural goods are produced in the Global South, the economic benefits—particularly in higher-value sectors—are predominantly seized by countries in the Global North. This disparity highlights a significant issue that needs addressing in global economic dialogues.

Key Findings from Recent Research

A recent study conducted by the Institute of Environmental Science and Technology at the Universitat Autònoma de Barcelona (ICTA-UAB) sheds light on this matter. The research, published in the journal Global Food Security, was spearheaded by researcher Meghna Goyal, along with Jason Hickel from ICTA-UAB and Praveen Jha from Jawaharlal Nehru University in India. For the first time, this study provides a comprehensive analysis of the distribution of economic value in agri-food chains over a span of 25 years, specifically from 1995 to 2020.

Global North’s Dominance in Value Capture

The findings reveal a troubling trend: even though the Global South has increased its share of agricultural production, countries in the North continue to capture a disproportionate fraction of income from high-value sectors such as food processing, logistics, finance, and various services. This has significant implications for global food security and the economies of developing nations.

Tax Havens and Structural Inequalities

Moreover, the research highlights that a considerable amount of revenue is recorded in low-tax jurisdictions where agricultural production is minimal. This phenomenon points to a strategy wherein value addition is recorded based on profit-maximizing tactics rather than actual production practices. Notably, nations like Singapore and Hong Kong capture economic value significantly exceeding their agricultural outputs—by as much as 60 and 27 times, respectively.

The Call for Economic Sovereignty

The researchers emphasize the urgent need for economic sovereignty in the Global South as a vital measure to tackle the systemic inequalities ingrained in the global agri-food system. Goyal notes, “Value capture strategies reshape supply chains. Our findings alert us to its potentially negative consequences for development and equity for farming, and the Global South economies.”

Voices of Concern

Co-author Jason Hickel reinforces this sentiment by stating, “This is the first study to measure the global distribution of value in the agri-food system, and the results are damning. The people who do most of the agricultural production, which sustains global civilization, do not receive a fair share of food-system incomes.”

Conclusion

In conclusion, this groundbreaking research underscores the urgent need for reform in the global agri-food system. Addressing the structural inequalities tied to value capture is essential not just for the well-being of the Global South but for creating a more just and equitable global economy.