Let’s start with the numbers. In 2014, the ranking of total global agriculture-related revenue was Monsanto, $16 billion; Syngenta, $14 billion; Bayer, $12 billion; DuPont, $11 billion; Dow, $7 billion; and BASF, $7 billion. Earlier this month, Bayer added to the major consolidations in the agrochemical and seed traits industry by finalizing an acquisition of Monsanto for $66 billion. This is among other mergers between Dow Chemical and DuPont, and Syngenta and ChemChina valued at $130 billion and $43 billion, respectfully. These mergers would ultimately merge the “Big 6” agrochemical companies into the “Big 4,” creating an unprecedented consolidation within our agricultural system.
These mergers come as commodity prices fall, primarily in the realm of corn, soy and cotton that, food commodity economists say, will not rebound for years. Also, out of these merging companies, only Bayer has shown a continuous net profit in the last five years. These companies say these consolidation efforts will increase innovation and efficiency, thereby saving farmers money, while improving technology so that they may “feed the world.” That certainly is one theory, but skeptics may have another.
Many skeptics sit on the U.S. Senate Judiciary Committee and, last week, had some tough questions that led to some revealing answers for the CEOs of these companies that seek to merge. These companies are primarily involved in pesticide production, seed trait development for GMOs, or some combination of both.
Dr. Robb Fraley, executive vice president and chief technology officer for Monsanto, told senators that Bayer and Monsanto are “complimentary companies that have very different R&D programs, ours are seeds and traits and data science and Bayer operates in crop chemicals.” This comment is quite telling, in that, if the intentions were to increase efficiency and promote innovation of similar products, then why would two companies that do not deal in the same realm of technology within the agriculture sector merge? That’s because we are not watching a consolidation of like companies, but rather an attempt at supply-chain dominance, also known as vertical integration.
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Less choice, high food prices
Bayer and Monsanto are indeed “complimentary companies.” However, what they are not saying explicitly is that Monsanto creates seeds that are genetically engineered to withstand heavy chemical use, many of which Bayer conveniently produces. The merger would not only eliminate competition for certain products, but also allow two of the highest profiting companies in their fields to conspire in the development of seeds and genetically engineered traits to work with chemicals they also manufacture, thereby creating dependent, package-like products for farmers.
To put it into scope, a Bayer-Monsanto merger would create the largest agribusiness in the world and would control 29 percent of the world’s seeds, with 70 percent of the cottonseed market and 24 percent of its pesticides. As Sen. Richard Blumenthal (D-CT) said during the committee meeting, “(The) troubling, in fact alarming, potential consequences of these mergers … include less innovation, higher agricultural input prices, less choice for farmers and high food prices for consumers.”
Another concern for North Carolinians arose when Jim Blome, CEO of Bayer Crop Science, mentioned that if the mergers go through, they would be moving their North American headquarters from North Carolina to St. Louis although they would “maintain a presence in North Carolina.” It appears Bayer’s loyalty to North Carolina may not run as deep as we thought.
Ultimately, as these companies merge, our government and society are placing a great deal of faith in multi-national agricultural companies that have traditionally cared most about their bottom line and not about the health of our planet or its people. In fact, both Monsanto and Bayer have a history in chemical warfare production. Monsanto as a producer of Agent Orange during the Vietnam War and Bayer’s (under its parent company’s name, IG Farben) chemical production for the Nazi government during WWII. Both companies have openly admitted involvement in the production of these chemicals and their part in the atrocities committed by their users.
We should not take this potential consolidation of our food system lightly. This has immense implications that can affect the security of our food for years to come and lock us into a chemically dependent agricultural system. As far as the Bayer-Monsanto merger is concerned, the merger still has to be confirmed by the U.S. Department of Justice and the European Commission. It is my hope that these regulatory agencies consider not only practical implications like market share, but also philosophical implications such as the potential threats to a resilient agricultural system that can provide nutritious food for the world.
Preston Peck is a policy advocate for Toxic Free NC in Raleigh.