Foreign Investment Adaptations to the Changing Political and Economic Environments of the Agro-Food Sector

Abstract

This paper focuses on the newly developing area for Russia of food processing and trade activities downstream of the farm which, according to Jeremy Hobbs, Executive Director of Oxfam International, is a "powerful, unique and poorly understood sector" (Murphy et al., 2012: 3); it is a sector which needs to be made 'visible' "if food is to be susceptible to democratic regulation" (Friedman, 1995: 29). The paper looks to identify the well-known criticisms made in the literature of agro-food corporations, specifically foreign multinational corporations (MNCs), examining their relevance in the case of Cargill Russia, one of the global four 'ABCD' traders. Further, attempts are made to ascertain the country-specific nature of Cargill's operations, and how the company responds to these general criticisms. The 2010s have seen a shift in the Russian Government's policies, and an attempt to move towards national self-sufficiency-as indicated by the 2010 Food Security Doctrine-and this has combined with the new import substitution drive accelerated as a result of the geopolitical crisis surrounding Russia's annexation of Crimea; although this seems restrictive for international business, companies well placed and rehearsed in the practice of domestic sourcing and supply stand to benefit. The findings indicate that Cargill has modified its operations according to the unique and peculiar political and economic environment of Russia, and that its actions are mediated by country and cultural processes, resulting in variance in the way that the company's business is conducted compared to elsewhere in the world; in some cases, this contrasts with the findings of more macro, global academic studies of corporate behaviour. Further, this research finds that the Russian context has led Cargill to adopt 'soft power' strategies of conducting business with farmers, develop local supply chains, and embrace an attitude of non-preference towards export or domestic supply, contradicting the global corporate ethos of the corporation. This paper posits a 'third school' of competing discourse pervasive amongst employees of Cargill surrounding the cause of global food price volatility: that non-agricultural actors on the financial markets, as well as supply and demand dynamics, are responsible. This displays a form of exclusivism as 'Cargill the agricultural financial player'-a 'qualified' company that is 'other' to non-agricultural speculators, and one that is, therefore, supposed to be involved in financial markets-abstracting the company from any questionable role in the aforementioned volatility. Juxtaposing this competing discourse against the research of Salerno (2016: 6)-in which some of Cargill's financial subsidiaries are found to act with, and trade on behalf of, non-agricultural investors-seems to support Clapp's (2014: 10) notion that 'distancing'-even distance within a company-has made it difficult to observe the connections between financial actors and the food system, and has contributed to the creation of such competing discour...

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