Farmers lose with approval of Bayer acquisition of Monsanto, says NFU
On May 30, 2018 Canada’s Competition Bureau approved Bayer’s acquisition of Monsanto with conditions, one day after the United States Justice Department announced its approval of the deal. Monsanto is with world’s largest seed company; Bayer is the world’s largest pesticide company. Both companies also sell digital agriculture systems, with Monsanto’s being the most widely used. The new company will become the world’s largest integrated digital agriculture, seed and pesticide company. The European Union, Brazil, Russia and China also approved the deal.
To address regulators’ concerns about the deal’s negative impact on competition, Bayer offered to sell BASF its seed and pesticide businesses. Regulators have made divestment of these assets a condition of their approvals. Bayer will also be required to allow BASF, as well as Russian and Chinese agribusinesses, to use its digital agriculture platforms under license.
The National Farmers Union (NFU), along with farm organizations around the world, oppose the deal.
The approval of Bayer’s take-over of Monsanto follows on the heels of the February 2017 approval of the Chemchina purchase of Syngenta, and the June 2017 merger of seed and agrochemical giants, Dow and Dupont. In September 2017 Canada allowed the fertilizer companies, Agrium and Potashcorp fertilizer to merge, creating Nutrien.
“As farmers, we are faced with unprecedented concentration of the seed, chemical and fertilizer businesses we deal with,” said Jan Slomp, NFU 1st Vice President (Policy). “When so few companies control well over half the market, we are stuck with what companies want to supply at the prices they want to charge.”
“The options for farmers are shrinking. Problems farmers have identified are going unsolved because these companies can make their profits by increasing their footprint and controlling the market instead. Reducing tillage has improved soil conservation massively, but when done with methods that involve patented seed and chemical packages it resulted in too much dependence on a few companies,” noted Slomp. “Many farmers struggle with wild oats resistance to herbicides, and having fewer companies doesn’t address that. The ownership concentration in seed, agrochemical and digital agriculture gives the likes of the new Bayer-monsanto organization undue power in relation to governments and media, making it that much harder to get support for research on agronomic alternatives that allow farmers more freedom and which reduce their costs.”
“It is foolish to believe that genuine competition between four global agribusiness companies that control over 70 per cent of the market will keep input prices down and spur innovation, “said Slomp. “Joint ventures between them are still possible, they license the use of their products to each other, and none have anything to gain by reducing the prices they charge farmers for their products.”
“With the expansion of digital agriculture, a system that allows seed and chemical companies to collect and compile detailed data from our farms and use it as they see fit, our concerns are magnified,” warned Slomp. “We should not be hamstrung by what these companies are doing. Farmers need to be in charge. That is why we in the NFU are pushing for food sovereignty where farmers and communities make the important decisions about our food system. We call on our governments to safeguard our land and food by limiting, not enhancing, the power of the multinational agribusiness corporations.”