Problem

Domination of agricultural equipment industry by transnational corporations

Nature:
The oligopolistic character of the farm machinery industry and the prevailing production technology that has enabled the major manufacturers to rationalize geographically their production operations and to achieve a measure of global standardization of parts and components, have also contributed to considerable inertia as regards changes in standard product designs not instigated by the manufacturers' perception of what is necessary for developed country markets. Thus, new products specifically designed to be convenient and economically available to small-scale farmers unaided by government subsidies have not originated from transnational corporations but from small, independent local manufacturers in developed and certain developing countries.

Transnational corporations have the capacity to meet most, if not all, the farming mechanization needs of developing countries. The above analysis of the situation seems to make it clear, however, that the primary orientation of transnational corporations towards developed country markets will continue to dominate strategic decisions, especially with regard to product design, global rationalization of the production process, and the standardization of parts and components to facilitate external sourcing from ancillary industry. Largely due to the inertia born of the established (and until recently profitable) order of operations, therefore, transnational corporations are (with minor exceptions) unlikely to make any special efforts to design and manufacture equipment within the budget of small-scale peasant farmers in developing countries without large subsidizing by the host government.

Values:
Dominance
Problem Type:
E: Emanations of other problems
Date of last update
01.01.2000 – 00:00 CET