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Food Production Systems, Trade, and Transnational Corporations: - page 3 / 29

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Popkin and Gordon-Larsen 2004). These forces are leading to price reductions in wheat, rice, maize, and meats, which are bolstered by export-enhancing subsidies for these products in developed countries.

Interestingly, economists are now predicting that the recent surge in demand for bio-fuels produced with feedstocks (e.g., sugar, maize, and soybeans) will jack up prices for these commodities and hence the processed foods that incorporate them (Schmiduder 2007). Drenowski et al. (2007) argue that this phenomenon could lead to a “Giffen effect”: even if energy-dense (calorie-intensive) processed foods become more expensive due to higher agricultural prices, low-income families may rely on processed foods more, not less, because the prices of “healthy” foods will also increase. However, all of these studies that use a global dimension to understand changing consumption patterns at the local level lack a detailed theoretical framework that situates why and how global economic processes are transmitted, and what is driving this phenomenon. The GVC approach outlined below helps to fill this void.

We structure the paper as follows. First, we define and describe the main concepts and methods of GVC analysis. Second, we outline how this approach can be used to analyze changes in food consumption patterns. We then show how the GVC framework can be applied to identify the direct and indirect linkages between the global economic processes of trade, foreign direct investment, and food consumption. Finally, we present evidence to highlight how selected TNCs are shaping food production and consumption around the world.

(2) Concepts and Methods of Global Value Chain Analysis Global value chain analysis examines the broad globalization story in terms of the actors and the mechanisms that shape and transform global economic processes and various types of inter-firm relationships (see http://www.globalvaluechains.org/concepts.html). GVC researchers incorporate and analyze the full range of activities lead firms and their suppliers undertake to bring a product from its initial conception to the consumer. Their activities are spread far and wide across geographic space. These dynamics allow us to understand the consequences of globalization, including the structural environment that sustains unhealthy diets.

Since the second half of the twentieth century, the global economy has been described as increasingly fragmented and dispersed. Firms are breaking apart the vertically integrated business model and procuring parts and services from a growing variety of suppliers, traders, and

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