Gruma and Grupo Minsa controlling more than 90 percent of domestic corn flour production (Zahniser and Coyle 2004).
While Mexico has its own large companies in the tortilla and corn flour production segments of the market, the reduction in tariffs associated with NAFTA has brought a flood of cheap corn from the United States and stiff competition for local farmers. It is estimated that Mexico’s corn imports may reach 14 million metric tons by 2013. The corn being imported is mostly a genetically modified U.S. variety, and Monsanto is hoping to bring their genetically modified seeds to Mexico for local farmers to use. These seed varieties will require pesticides and fertilizers manufactured by transnational chemical companies (Ross 2007).
The survival of many of the ejidos (community farms) in Mexico is in jeopardy because of the new tariff phase-out. According to Ross (2007), in the first 13 years of NAFTA, 6 million Mexican farmers abandoned their farms, potentially making 59 distinct Mexican corn varieties extinct. Overall, tariff changes, continuing urbanization, and a complex distribution system are driving further structural changes in Mexico’s food system that could lead to future economic and social problems.
The above examples from China, Trinidad and Tobago, and Mexico show how the global value chains of food products connect developed and developing countries in direct and indirect ways. China has substantial amounts of FDI in its food manufacturing sector, but trade liberalization has increased the availability of key agricultural commodities like soybeans, with significant impacts on China’s local agricultural and food systems. While Trinidad and Tobago and Mexico have strong local firms, these companies have adopted the food-processing practices of TNCs in developed countries. These practices then have a ripple effect throughout the countries in changing the types of foods available for consumption. The recent evolution of global food and agricultural value chains favors the adoption of Western supply chain dynamics in developing countries. The story at the local level is one where global economic processes influence food consumption in ways that can be positive or negative for healthy diets.
(5) Drivers of Food Consumption: Transnational Corporations as Lead Firms GVC researchers use a variety of tools to gather data on the structure of global industries. One of the most effective techniques are case-based comparisons of lead firms in global value chains. A close look at specific companies facilitates the analysis of broad corporate strategies