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38 Billion Dollar Question – Who is Driving the Destructive Industrial Agriculture Model?

Tuesday, September 20, 2022
By: Frederic Mousseau
Rolls of dollar bills in a field

Governments, international institutions, philanthropic institutions, and international initiatives such as the Alliance for a Green Revolution in Africa (AGRA) continue to promote and finance industrial agricultural practices dependent on the intensive use of commercial seeds and fossil-fuel based chemical inputs. Yet, there is no doubt that we need a drastic shift in the way we produce food in order to stop the destruction of our planet and to reduce greenhouse gas emissions. The Intergovernmental Panel on Climate Change (IPCC) has listed the abandonment of monocrops as a critical measure to mitigate the climate crisis. Farmer groups representing hundreds of millions in the Global South deem such a transition imperative to improve livelihoods, build resilience, and combat hunger. United Nations agencies, scientists, farmer organizations and NGOs have offered tremendous evidence of agroecological practices and approaches that are economically viable, environment friendly, and effective at addressing the climate crisis.

So the 38-billion-dollar question is — If the so-called ‘decision makers’ don’t listen to scientists, citizens, and farmers, then who are they listening to?

The large pesticide and fertilizer companies are extremely profitable, especially in crisis years like 2022. Net income of eight of the largest pesticides and fertilizer companies — Yara International; CF Industries Holdings Inc.; K+S Aktiengesellschaft; Nutrien Ltd.; The Mosaic Company; Corteva, Inc. (Dow Agroscience); BASF SE; and Bayer1 — are projected to double, from US$19 billion in 2021 to 38 billion in 2022.2 Their profits will continue to grow as long as the industrial agriculture production model on which they rely keeps expanding, resulting in more monocropping, human rights abuses, and environmental devastation.

Top 10 shareholders of the major pesticide and fertilizer companies
Rank CF Industries Holdings, Inc. K+S
Aktiengesell-
schaft
Nutrien Ltd. The Mosaic Company Corteva, Inc. (Dow Agroscience) BASF SE Bayer Yara
International
1 Vanguard Group Inc. BlackRock Inc. FMR LLC Vanguard Group Inc. Vanguard Group Inc. BlackRock Inc. BlackRock Inc. Narings- Og
Handels-
departementet
2 BlackRock Inc. Vanguard Group Inc. Vanguard Group Inc. BlackRock Inc. BlackRock Inc. Vanguard Group Inc. Vanguard Group Inc. The Government Pension Fund - Norway
3 FMR LLC Dimensional Fund Advisors LP T. Rowe Price Group Inc. FMR LLC State Street Global Advisors Inc. Deutsche Asset & Wealth Management Massachusetts Financial Services Company Folketrygdfondet
4 T. Rowe Price Group Inc. Norges Bank Investment Management Fidelity International Ltd. State Street Global Advisors Inc. Capital Research & Mgmt Co. Norges Bank Investment Management Harris Associates LP Vanguard Group Inc.
5 State Street Global Advisors Inc. Deutsche Asset & Wealth Management RBC Global Asset Management Inc. Capital Research & Mgmt Co. Aristotle Capital Management LLC Franklin Resources Inc. Norges Bank Investment Management Sprucegrove Investment Management Ltd
6 Geode Capital Management LLC The Goldman Sachs Group Inc. BMO Asset Management Corp. Geode Capital Management LLC FMR LLC Amundi Asset Management SAS Deutsche Asset & Wealth Management BlackRock Inc.
7 Northern Trust Global Investments Goldman Sachs Asset Management LP RBC Dominion Securities Inc. Soroban Capital Partners LP Geode Capital Management LLC Union Asset Management Holding AG Dodge & Cox DNB Asset Management AS
8 Capital Research & Mgmt Co. Deka Investment GmbH Capital Research & Mgmt Co. Northern Trust Global Investments Northern Trust Global Investments Capital Research & Mgmt Co. Capital Research & Mgmt Co. Polaris Capital Management LLC
9 BNY Asset Management Alken Asset Management LLP Mackenzie Financial Corp. BNY Asset Management Norges Bank Investment Management Deka Investment GmbH Teachers Insurance and Annuity Association-College Retirement Equities Fund Storebrand Kapitalforvaltning As
10 Invesco Ltd. Northern Trust Global Investments Dodge & Cox Dimensional Fund Advisors LP Independent Franchise Partners LLP Geode Capital Management LLC FMR LLC Arrowstreet Capital Ltd. Partnership
Chart: 10 shareholders of the major pesticide and fertilizer companies
Top 10 shareholders of the major pesticide and fertilizer companies

Analysis of the shareholding of these eight companies reveals who actually benefits from this growth with two investment firms — Blackrock and Vanguard — being by far their largest shareholders. The Vanguard Group is a shareholder in all of the eight companies, while Blackrock is in seven out of the eight. Together these two firms account for US$28 billion worth of shares of these companies. Other major shareholders include investment firms, banks, and pension funds from Europe and North America — the largest being FMR LLC, Capital Research & Mgmt Co. and State Street Global Advisors Inc.

With respectively USD$10 trillion and US$8 trillion in assets under management,3 BlackRock and Vanguard are the world’s largest asset management firms. They are among the largest institutional investors in fossil fuels — with share and bond holdings in the coal industry of US$109 billion and US$101 billion.4 The world needs these giants to divest from the fossil-fuel industry. But it is equally imperative that they are made to divest from agrochemical corporations — major contributors of greenhouse gas emissions which thrive on a production model that is devastating for the people and the planet.