PepsiCo Contracts with Mexican Corn Co-op - Who Really Benefits?

Pepsi has gone social? A recent New York Times article, For Pepsi, A Business Decision With Social Benefit, touted PepsiCo’s new relationship with farmers in Mexico.

In the story we read that a co-op of about 300 small farmers are now selling their corn directly to PepsiCo rather than to brokers and wholesalers. PepsiCo contracts for the corn and guarantees a price upfront.

While the article is talking up these kinds of relationships for the supposed social and economic benefits that small farmers and producers are supposed to receive, it does not ask – or answer – questions that will clarify who truly benefits from these agreements. In the case of PepsiCo:

  • Who is determining which seeds they grow?
  • Are the seeds patented hybrids or GMOs?
  • Can the farmers save their own seed?
  • Which pesticides are they instructed to use?
  • Are the costs for seeds, fertilizers, and pesticides going up?
  • Who actually negotiates and sets the price for the corn? Is it a “take it or leave it” pricing from PepsiCo or do the farmers have input?

PepsiCo is developing similar programs with sunflower and potato farmers.

Fair trade programs that help farmers get more money for their crops and access to secure markets are good. We just need to look under the covers and see what’s in it for PepsiCo as well as the small farmers.

While more and more companies are talking about the “triple bottom line,” transparency is a critical element to help the consumer understand the true value – and cost – of these programs.

 

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