Local Struggles as a Resource for Multinational Corporations: Romanian Farm Managers Facing Agricultural Commodity Traders

Authors

  • Antoine Roger *

    Sciences Po Bordeaux (France)

DOI:

https://doi.org/10.55121/nc.v4i1.320

Keywords:

Multinational Corporations, Traders, Intensive Agriculture, Romania, Field Theory

Abstract

Several multinational corporations engaged in the trading of agricultural commodities have been active in Romania for several decades. To explain this situation, international business studies put the emphasis on transaction costs and a series of variables that guide location choices. This line of reasoning fails to take proper account of local power relations. The notion of “field”, as conceived by Pierre Bourdieu, offers an alternative. In Romania, multinational corporations contribute to the formation of an entrepreneurial field in which the issue at stake is the exercise of local symbolic power. Their ability to collect and store grain in the long term depends at the same time on this structural organisation. To account for this situation, we need to examine successive decollectivization measures and the resulting benefits for multinational corporations. After the fall of the Communist regime, agricultural entrepreneurs first took advantage of the restitution and redistribution of land to cultivate cereals and oilseeds over vast areas. All of them aim to export their products. However, they have difficulty in controlling this choice due to limited storage capacity. As a matter of fact, multinational corporations engaged in agricultural commodity trading took advantage of a second reform package and now control the main silos. Entrepreneurs looking to sell their crops have to deal with these constraints. Their approach depends on the capital they have at their disposal. This led to internal conflicts, the developments of which we have examined between 2010 and 2017.

References

[1] Bonanno, A., Constance, D., Lorenz, H., 2000. Powers and limits of transnational corporations: The case of ADM. Rural Sociology. 65(3), 440–460. DOI: https://doi.org/10.1111/j.1549-0831.2000.tb00038.x

[2] Morgan, D., 1979. Merchants of Grain. Viking Press: New York, NY, USA.

[3] Gilmore, R., 1982. A Poor Harvest: The Clash of Policies and Interests in the Grain Trade. Longman: New York, NY, USA.

[4] Broehl, W., 1992. Cargill: Trading the World’s Grain. University Press of New England: Hanover, NH, USA.

[5] Kneen, B., 2002. Invisible Giant: Cargill and Its Transnational Strategies. Pluto Press: London, UK.

[6] Murphy, S., Burch, D., Clapp, J., 2012. Cereal Secrets: The World’s Largest Grain Traders and Global Agriculture. Oxfam Research Report, 3 August 2012. Avaible from:https://oxfamilibrary.openrepository.com/bitstream/handle/10546/237131/rr-cereal-secrets-grain-traders-agriculture-30082012-en.pdf?sequence=10&isAllowed=y

[7] Clapp, J., 2015. CRFA - ABCD and beyond: From grain merchants to agricultural value chain managers. Canadian Food Studies. 2(2), 126–135. DOI: https://doi.org/10.15353/cfs-rcea.v2i2.84

[8] Salerno, T., 2017. Cargill’s corporate growth in times of crises: How agro-commodity traders are increasing profits in the midst of volatility. Agriculture and Human Values. 34(1), 211–222. DOI: https://doi.org/10.1007/s10460-016-9681-8

[9] Lander, C., 2018. Foreign investment adaptations to the changing political and economic environments of the agro-food sector: A case study of Cargill Russia. Problems of Post-Communism. 65(3), 201–219. DOI: https://doi.org/10.1080/10758216.2016.1260998

[10] Paul, J., Feliciano-Cestero, M., 2021. Five decades of research on foreign direct investment by MNEs: An overview and research agenda. Journal of Business Research. 124, 800–812. DOI: https://doi.org/10.1016/j.jbusres.2020.04.017

[11] Abu Bakar, A.H., Sinnappan, P., Salim, F.A.A., et al., 2022. Factors influencing foreign direct investment (FDI) location selection: A review of the literature. International Journal of Academic Research in Business and Social Science. 12(7), 1271–1291. DOI: http://dx.doi.org/10.6007/IJARBSS/v12-i7/14103

[12] Saittakari, I., Ritvala, T., Piekkari, R., et al., 2023. A review of location, politics, and the multinational corporation: Bringing political geography into international business. Journal of International Business Studies. 54, 1–27. DOI: https://doi.org/10.1057/s41267-023-00601-6

[13] Horst, T., 1972. Firm and industry determinants of the decision to invest abroad: An empirical study. The review of economics and statistics. 54(3), 258–266. DOI: https://doi.org/10.2307/1937986

[14] Kobrin, S., 1976. The environmental determinants of foreign direct manufacturing investment: An ex-post empirical analysis. Journal of International Business Studies. 7(2), 29–42. DOI: https://doi.org/10.1057/palgrave.jibs.8490699

[15] Dunning, J.H., 1977. Trade, location of economic activity and the MNE: A search for an eclectic approach. In: Ohlin, B., Hesselborn, PO., Wijkman, P.M. (eds.). The International Allocation of Economic Activity. Macmillan: London, UK. pp. 395–418.

[16] Dunning, J.H., 2000. The eclectic paradigm as an envelope for economic and business theories of MNE activity. International Business Review. 9(2), 163–190. DOI: https://doi.org/10.1016/S0969-5931(99)00035-9

[17] Dunning, J.H., Lundan, S., 2008. Multinational Enterprises and the Global Economy. Edward Elgar: Cheltenham, UK.

[18] Miller, K.D., 1992. A framework for integrated risk management in international business. Journal of International Business Studies. 23(2), 311–331. DOI: https://doi.org/10.1057/palgrave.jibs.8490270

[19] Rugman, A.M., Verbeke, A., 1992. A note on the transnational solution and the transaction cost theory of multinational strategic management. Journal of International Business Studies. 23(4), 761–771. DOI: https://doi.org/10.1057/palgrave.jibs.8490287

[20] Contractor, F.J., Dangol, R., Nuruzzaman, N., et al., 2020. How do country regulations and business environment impact foreign direct investment (FDI) inflows?. International Business Review. 29(2), 453–468. DOI: https://doi.org/10.1016/j.ibusrev.2019.101640

[21] Georgallis, P., Albino-Pimentel, J., Kondratenko, N., 2021. Jurisdiction shopping and foreign location choice: The role of market and nonmarket experience in the European solar energy industry. Journal of International Business Studies. 52(5), 853–887. DOI: https://doi.org/10.1057/s41267-020-00358-2

[22] Palenzuela, V.A., Bobillo, A.M., 1999. Transaction costs and bargaining power: Entry mode choice in foreign markets. Multinational Business Review. 7(1), 62–76.

[23] Ramamurti, R., 2001. The obsolescing “bargaining model”? MNC–host developing country relations revisited. Journal of International Business Studies. 32(1), 23–39. DOI: https://doi.org/10.1057/palgrave.jibs.8490936

[24] Luo, Y., 2005. Toward coopetition within a multinational enterprise: A perspective from foreign subsidiaries. Journal of World Business. 40(1), 71–90. DOI: https://doi.org/10.1016/j.jwb.2004.10.006

[25] Mudambi, R., 2021. Location and international strategy formation. In: Mellahi, K., Meyer, K., Narula, R., et al. (eds.). The Oxford Handbook of International Business Strategy. Oxford University Press: Oxford, UK. pp. 76–90.

[26] Pirrong, C., 2015. The Economics of Commodity Trading Firms. Trafigura: Houston, TX, USA.

[27] Calegario, C.L.L., Houston, J.E., Bruhn, N.C.P., 2015. Foreign market entry strategies in the United States/European Union agribusiness trade context. International Journal of Food and Agricultural Economics. 3(3), 47–61. DOI: https://doi.org/10.22004/ag.econ.208849

[28] Tokeld, E., Croft, A., Green, J.M.H., et al., 2020. Climate change, crops and commodity traders: Subnational trade analysis highlights differentiated risk exposure. Climatic Change. 162, 175–192. DOI: https://doi.org/10.1007/s10584-020-02857-5

[29] Freidberg, S., 2017. Trading in the secretive commodity. Economy and Society. 46(3–4), 499–521. DOI: https://doi.org/10.1080/03085147.2017.1397359

[30] Baines, J., Hager, S.B., 2022. Commodity traders in a storm: Financialization, corporate power and ecological crisis. Review of International Political Economy. 29(4), 1053–1084. DOI: https://doi.org/10.1080/09692290.2021.1872039

[31] McWilliam, S.E., Kim, J.K., Mudambi, R., et al., 2020. Global value chain governance: Intersections with international business. Journal of World Business. 55(4), 175–192. DOI: https://doi.org/10.1016/j.jwb.2019.101067

[32] Wright, R., 2022. Subsidiary activities: Parent company and local predictors of business resilience. Journal of Business & Economics Review. 7(2), 127–140. DOI: https://doi.org/10.35609/jber.2022.7.2(2)

[33] Cannizzaro, A.P., 2020. Social influence and MNE strategic response to political risk: A global network approach. Journal of International Business Studies. 51(5), 829–850. https://doi.org/10.1057/s41267-019-00246-4

[34] Medina, L.F., Bucheli, M., Kim, M., 2019. Politico-economic determinants of the expropriation and taxation of multinational firms. Journal of International Business Policy. 2(2), 119–141. DOI: https://doi.org/10.1057/s42214-019-00022-z

[35] Boddewyn, J.J., 2015. Political aspects of MNE theory. In: Cantwell, J. (ed.). The Eclectic Paradigm: A Framework for Synthesizing and Comparing Theories of International Business from Different Disciplines or Perspectives. Palgrave Macmillan: London, UK. pp. 85–110. DOI: https://doi.org/10.1007/978-1-137-54471-1_4

[36] Aldous, M., 2019. Trading companies. In: Da Silva Lopes, T., Lubinski, C., Tworek, H.J.S. (eds.). The Routledge Companion to the Makers of Global Business. Routledge: London, UK. pp. 201–216.

[37] Storli, E., 2020. Global Commodity Traders. In: Da Silva Lopes, T., Lubinski, C., Tworek, H.J.S. (eds.). The Routledge Companion to the Makers of Global Business. Routledge: London, UK. pp. 455–466.

[38] Boon, M., Storli, E., 2023. Creating global capitalism: An introduction to commodity trading companies and the first global economy. Business History. 65(5), 787–802. DOI: https://doi.org/10.1080/00076791.2023.2172163

[39] Jones, G., Khanna, T., 2006. Bringing history (back) into international business. Journal of International Business Studies. 37(4), 453–468. https://doi.org/10.1057/palgrave.jibs.8400198

[40] Bourdieu, P., 1993. Some properties of fields. In Bourdieu, P. (ed.). Sociology in Question. Sage: London, UK. pp. 72–77.

[41] Bourdieu, P., 1986. The forms of capital. In: Richardson, J. (ed.). Handbook of Theory and Research for the Sociology of Education. Greenwood: New York, NY, USA. pp. 241–258.

[42] Bourdieu, P., 1979. Symbolic power. Critique of Anthropology. 13–14, 77–85. DOI: https://doi.org/10.1177/0308275X7900401307

[43] White, H.C., 1981. Where do markets come from?. American Journal of Sociology. 87(3), 517–547. DOI: https://doi.org/10.1086/227495

[44] White, H.C., 2002. Markets from Networks. Socioeconomic Models of Production. Princeton University Press: Princeton, NJ, USA.

[45] Bourdieu, P., 2005. The Social Structures of the Economy. Polity Press: Cambridge, UK.

[46] DiMaggio, P., Powell, W., 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational field. American Sociological Review. 48(2), 147–160. DOI: https://doi.org/10.2307/2095101

[47] DiMaggio, P., 1986. Structural analysis of organizational fields: A blockmodel approach. Research in Organizational Behavior. 8, 335–370.

[48] DiMaggio, P., Powell, W., 1991. Introduction. In: DiMaggio, P., Powell, W. (eds.). The New Institutionalism in Organizational Analysis. University of Chicago Press: Chicago, IL, USA. pp. 1–38.

[49] Emirbayer, M., Johnson, V., 2008. Bourdieu and organizational analysis. Theory and Society. 37(1), 1–44. DOI: https://doi.org/10.1007/s11186-007-9052-y

[50] Christoforou, A., Laine, M., 2014. Re-thinking economics. Why Pierre Bourdieu?. In: Christoforou, A., Laine, M. (eds.). Re-Thinking Economics: Exploring the Work of Pierre Bourdieu. Routledge: London, UK. pp. 3–16.

[51] Fligstein, N., McAdam, D., 2011. Toward a general theory of strategic action fields. Sociological Theory. 29(1), 1–26. DOI: https://doi.org/10.1111/j.1467-9558.2010.0138

[52] Fligstein, N., McAdam, D., 2012. A Theory of Fields. Oxford University Press: Oxford, UK.

[53] Swartz, D., 2014. Theorizing fields. Theory and Society. 43(6), 675–682. DOI: https://doi.org/10.1007/s11186-014-9237-0

[54] Bourdieu, P., 1988. Homo Academicus. Polity Press: Cambridge, UK.

[55] Harwood, J., 2004., Technology’s Dilemma: Agricultural Colleges between Science and Practice in Germany, 1860–1934. Peter Lang: Bern, Switzerland.

[56] Lebaron, F., 2018. Pierre Bourdieu, geometric data analysis and the analysis of economic spaces and fields. Forum for Social Economics. 47(3–4), 288–304. DOI: https://doi.org/10.1080/07360932.2015.1043928

[57] MADR - Secretariat Tehnic General, Bucharest, 2011. Recensamântul General Agricol 2010.

[58] Verdery, K., 2009. Exploiters old and new: Making and unmaking “rich peasants” in Aurel Vlaicu (Hunedoara Region). In: Iordachi, C., Dobrincu, D. (eds.). Transforming Peasants, Property and Power: The Collectivization of Agriculture in Romania, 1949–1962. CEU Press: Budapest, Hungary. pp. 307–328.

[59] Verdery, K., Kligman, G., 2011. Peasants under Siege: The Collectivisation of Romanian Agriculture, 1949–1962. Princeton University Press: Princeton, NJ, USA.

[60] Kideckel, D., 1993. The Solitude of Collectivism: Romanian Villager to the Revolution and Beyond. Cornell University Press: Ithaca, NY, USA.

[61] Cartwright, A., 2001. The Return of the Peasant: Land Reform in post-Communist Romania. Ashgate: Reading, UK.

[62] Verdery, K., 2003. The Vanishing Hectare: Property and Value in Postsocialist Transylvania. Cornell University Press: Ithaca, NY, USA.

[63] Stan, S., 2005. L’Agriculture Roumaine en Mutation: La Construction Sociale du Marché. Romanian agriculture in Change: The Social Construction of the Market CNRS Éditions: Paris, France. (in French).

[64] Voiculescu, C., 2008. Disappearing peasants? On land, rent, and revenue in post1989 Romania. Focaal. 52, 77–91. DOI: https://doi.org/10.3167/fcl.2008.520105

Downloads

How to Cite

Roger, A. (2025). Local Struggles as a Resource for Multinational Corporations: Romanian Farm Managers Facing Agricultural Commodity Traders. New Countryside, 4(1), 26–44. https://doi.org/10.55121/nc.v4i1.320