Ag giants’ merger would harm farmers, report says

Source: Marc Heller, E&E News reporter • Posted: Wednesday, November 15, 2017

The proposed merger of Bayer AG and Monsanto Co. could squeeze out farmers who’d rather not use farm chemicals at all, an environmental group warned today.

At a briefing organized by opponents of the proposal — which would create the world’s largest seed and farm chemical company — Friends of the Earth President Erich Pica said farmers who avoid pesticides could run out of choices if the deal moves forward.

The proposed merger is awaiting federal approvals. Pica and others at the briefing urged the Justice Department to reject the deal, saying it would run afoul of antitrust regulations.

“You’re beginning to rob farmers of choice,” Pica said, citing the proposed deal’s potential to put ever-larger amounts of farm data into the hands of a new corporate giant, to be used for marketing purposes. “You’re eliminating the choice not to get on the pesticide treadmill.”

Sponsors of the briefing said they’ve collected 1 million signatures on a petition to the Justice Department to reject the merger. They also released a report by the Consumer Federation of America saying the deal would clearly violate the department’s guidelines on market concentration, calling it a “tight oligopoly on steroids.”

Both companies are already major players in biotechnology and farm chemicals, and in the ongoing fight to invent new chemicals that kill weeds that have become resistant to older herbicides. Those chemicals are sold along with seeds for corn, soybeans or other crops designed to resist them.

With the proposed merger creating a company that would control 71 percent of cotton seeds and 77 percent of corn seeds, farmers are likely to see higher prices along with fewer choices of suppliers, the groups said.

Monsanto makes the weedkiller glyphosate, known by the brand name Roundup. Bayer makes a wide range of chemicals, as well as selling seed lines such as InVigor canola and Credenz soybeans.

The companies say the benefits they offer farmers outweigh any concerns about market concentration. And Monsanto, for instance, does have organic lines of seeds.

“We think there isn’t just one solution when it comes to addressing big global challenges like sustainable food production,” Monsanto said on its website. “Instead, it’s going to take a lot of different tools and approaches. That includes organic farming, and we support organic farming. We provide a range of conventionally produced seeds that have not been improved through biotechnology for fruits and vegetables such as tomatoes, melons and bell peppers, and many of our customers who purchase those seeds are organic farmers.”

President Trump has signaled he’s open to the idea of the merger, having met with executives of both companies shortly before he took office. But the Justice Department’s Antitrust Division has also shown it’s concerned about vertical integration in key industries, said Mark Cooper, a senior fellow at the Consumer Federation of America who wrote the report released today.

“It’s ripe for litigation,” Cooper said, adding that he doesn’t know what Justice will do. “We need a new vertical policy, and they seem willing to think about it.”