Monsanto and Bayer: Why Food and Agriculture Just Took a Turn For The Worse
News broke this week that Monsanto accepted a $66 billion takeover bid from Bayer. The new company would control more than 25 per cent of the global supply of commercial seeds and pesticides. Bayer’s crop chemicals business is the world’s second largest after Syngenta, and Monsanto is the leading commercial seeds business.
Monsanto held a 26 per cent market share of all seeds sold in 2011. Bayer (mainly a pharmaceuticals company) sells 17 per cent of the world’s total agrochemicals and also has a comparatively small seeds sector. If competition authorities pass the deal, the combined company would be the globe’s largest seller of both seeds and agrochemicals.
The deal marks a trend towards consolidation in the industry with Dow and DuPont having agreed to merge and Swiss seed/pesticide giant Syngenta merging with ChemChina, a Chinese government concern.
The mergers would mean that three companies would dominate the commercial agricultural seeds and chemicals sector, down from six – Syngenta, Bayer, BASF, Dow, Monsanto and DuPont. Prior to the mergers, these six firms controlled 60 per cent of commercial seed and more than 75 per cent of agrochemical markets.
Alarm bells are ringing with the European Commission putting its approval of the Dow-DuPont deal temporarily on hold, and the US Senate Judiciary Committee is about to hold hearings on the deal due to concerns about consolidation in the industry, which has resulted in increased seed and pesticide prices.
In response to the Monsanto-Bayer merger, US National Farmers Union President Roger Johnson issued the following statement:
“Consolidation of this magnitude cannot be the standard for agriculture, nor should we allow it to determine the landscape for our future. The merger between Bayer and Monsanto marks the fifth major deal in agriculture in the last year…
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