The global agri-food system is essential for sustaining billions of people, yet its economic structure reveals stark inequalities. A recent study conducted by the Institute of Environmental Science and Technology at the Universitat Autònoma de Barcelona (ICTA-UAB) reveals a significant issue. The value distribution across global food chains disproportionately favours countries of the Global North. This leaves the Global South with a limited share of economic benefits.
From 1995 to 2020, most agricultural goods were produced in the Global South. But, countries of the Global North dominated value capture. They controlled post-farmgate sectors, including food processing, logistics, finance, and services. These industries absorb far more value than agricultural production itself, reinforcing global inequalities in wealth and development.
The research, published in Global Food Security, marks the first global-scale analysis of economic value distribution in food systems. This analysis covers a 25-year period. The findings demonstrate that the Global South has increased its role in agricultural production. Meanwhile, income generated from higher-value sectors continues to concentrate in the Global North.
How Value Capture Works in Agri-Food Chains
Agricultural goods provide the foundation of global food systems, yet most profits are extracted after crops leave the farm. Processing industries, multinational corporations, and financial service providers, largely based in wealthier nations, control this stage of the chain. These sectors add branding, marketing, and distribution. They capture a disproportionate share of income compared to the farmers who grow the crops.
For instance, countries such as Singapore and Hong Kong capture significantly more from global agri-food systems than the actual value of their agricultural production. Singapore captures up to 60 times more, while Hong Kong captures 27 times more. Much of this is achieved through profit-maximising strategies and financial accounting practices that route revenue through low-tax jurisdictions, rather than reflecting genuine production or employment.
Structural Inequalities in the Global Food System
The study highlights that value chains in agri-food systems reinforce structural inequalities embedded in the international division of labour. Farmers in the Global South perform the most labour-intensive tasks of food production. Yet, profits flow disproportionately to corporations and institutions in the Global North.
This imbalance not only restricts economic development in producing countries but also deepens dependency on external markets and systems controlled by wealthier nations. According to the authors, this is a modern extension of historical unequal exchange that continues to disadvantage the Global South.
Key Findings from the Study
Led by ICTA-UAB researcher Meghna Goyal, alongside Jason Hickel and Praveen Jha from Jawaharlal Nehru University, the study provided striking evidence:
- Between 1995 and 2020, value-added activities increasingly concentrated in non-agricultural sectors dominated by the Global North.
- Despite rising agricultural output in the Global South, farmers received only a small share of total food-system income.
- Low-tax jurisdictions with limited agricultural output recorded disproportionately high revenue from agri-food systems.
- Value capture strategies in supply chains often prioritised profit optimisation rather than genuine economic contribution.
Voices from the Research Team
“Value capture strategies reshape supply chains,” explained lead author Meghna Goyal. “Our findings alert us to its potentially negative consequences for development and equity in farming and Global South economies.”
Jason Hickel, co-author and ICTA-UAB researcher, added: “This is the first study to measure the global distribution of value in the agri-food system, and the results are damning. The people who do most of the agricultural production, which sustains global civilisation, do not get a fair share of food-system incomes.”
The Role of Post-Farmgate Sectors
Post-farmgate sectors, including food processing, branding, distribution, and retail, are increasingly dominated by multinational corporations headquartered in developed countries. These sectors are far more profitable than farming and are strategically positioned to capture value by adding consumer appeal and managing supply chains.
Farmers in the Global South, despite producing the raw commodities, are often locked into low-price contracts and lack access to higher-value markets. This dynamic ensures that wealth accumulation remains concentrated in the Global North, widening the economic gap between producing and consuming nations.
Implications for the Global South
The study’s findings highlight the urgent need for greater economic sovereignty in the Global South. Without structural reforms, countries dependent on agriculture may continue to lose potential revenue and remain vulnerable to volatile global markets.
Agricultural workers and smallholder farmers in the Global South face multiple challenges, including low wages, limited bargaining power, and high production costs. With value disproportionately captured elsewhere, local communities often struggle to benefit from their own agricultural productivity.
Calls for Food System Justice
Addressing inequality in global food systems requires structural transformation. Policy recommendations include:
- Strengthening economic sovereignty for Global South nations through fair trade policies.
- Reducing reliance on tax havens and profit-shifting practices that divert value from producing regions.
- Building domestic processing and distribution infrastructure in the Global South to retain value locally.
- Promoting equitable supply chain practices and stronger regulation of multinational corporations.
Such reforms would help ensure that agricultural workers, who sustain global food systems, gain a fairer share of economic benefits.
Why This Matters for Development and Equity
The global food system sustains all of humanity, yet it is built on imbalances that undermine fairness and justice. Farmers in the Global South, who provide the bulk of the world’s agricultural goods, should not be excluded from the wealth generated by the system.
Without addressing these inequalities, development goals in producing countries remain at risk. Economic sovereignty and fairer value distribution are essential to creating food systems that are not only productive but also equitable and sustainable.
Conclusion
The ICTA-UAB study offers a powerful reminder of the unequal structures underpinning global agri-food chains. While the Global South grows the food, the Global North captures the wealth, leaving deep imbalances in value distribution.
For global food security and sustainable development, urgent reforms are needed to rebalance value chains and ensure fairer outcomes for producers. Farmers who feed the world deserve more than subsistence — they deserve a just share of the system they sustain.