World Food Policy WFP Volume 4, No. 2, Spring 2018 | Page 29

The Role of Multinational Corporations in the Supply of
Agricultural Production Technology to China & India
vested heavily in government and co-
operatives to accelerative fertilizer and
modern seed production in India. In-
dian central and state governments also
invested in tractor and pesticide SOEs,
but they were never important shares of
those markets. SOEs in most of these
industries were gradually sold to pri-
vate firms in the 1990s and 2000s. SOE, had a substantial market share
even before in purchased the largest ge-
neric pesticide company in the world –
Makhteshim in 2011 and Syngenta, one
of the largest global pesticide compa-
nies, in 2017.
agricultural machinery firms before
1978. These companies were organized
to produce and supply agricultural in-
puts and were owned by various levels
of government from the county level
up the national level. After 1978 the
government gradually replaced central
planning with markets in the input in-
dustries. In addition, the government
gradually commercialized these indus-
tries by allowing private firms to grow
and purchase some of the assets of the
SOEs while encouraging the remaining
SOEs to operate as private companies
and to consolidate into larger SOEs.
The remaining SOEs are owned by the
government agencies and must meet
certain government goals. P
4. Which country did the best
job of “exploiting” the MNCs?
The input industry was entire- Impact on farmers and global
ly state owned and consisted of thou- competitiveness of Chinese
sands of seed, pesticide, fertilizer and and Indian industries
rivate agricultural research for-
eign firms were much more im-
portant in India than China.
MNCs paid for about 40 percent of In-
dian private research in 2009 and there
are no obvious signs that the foreign
firms are crowding out private Indian
R&D (Pray & Nagarajan, 2014). In con-
trast in China only about six percent of
Chinese private agricultural input re-
search was conducted by foreign firms
in 2010.
In India MNCs play a larger role
in sales than in China. About 30% of
seeds sales, 30% of pesticides and 40%
of tractor sales are by MNCs (Pray and
Nagarajan 2014). In China less than 5%
of seeds sales, 6% of pesticides, 17%
of agricultural machinery and 12 % of
fertilizer sales were by foreign owned
firms in 2010 (calculated from Howell’s
dataset). The growth in market share
of MNCs in India has led less concen-
tration rather than more concentra-
tion as some predicted. MNCs reduced
concentration in the seed sector where
MNCs are most active and did not in-
crease concentration on pesticides and
Today the Chinese government
is promoting SOEs to become high tech
industries that are competitive global-
ly. China National Machinery Industry
Corporation (also known as Sinomach)
through its subsidiary has a 33% market
share of the medium to large tractors in
China (Deng 2018) Subsidiaries of state
owned SinoChem sold about 7% of the
pesticides (Agronews 2016). Subsidiar-
ies of ChemChina, another chemical
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