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Competition advocacy group battles agriculture's seed giant

Agriculture.com Staff 02/13/2016 @ 9:13am

For 10 years, the Organization for Competitive Markets, a small group of farmers, cattle feeders and others worried about concentration and market power in agriculture, has toiled in near obscurity. With mixed results.

OCM filed legal briefs backing a lawsuit by cattle feeders against Tyson Fresh Meats, Inc. In a jury trial, the feeders won a $1.3 billion award for damages due to price manipulation. They lost on appeal. OCM opposed the merger of Cargill and Continental Grain. It went through after Cargill was forced to unload a few key grain terminals. OCM has opposed many mergers among agribusinesses. In most cases, the trend toward fewer, bigger players in agribusiness continues.

Now the group has taken on the seed industry, holding its annual meeting in St. Louis last week, in the backyard of Monsanto. It's obscure no longer.

The Wall Street Journal, National Public Radio, Agriculture Online and others covered speeches by Obama administration officials from USDA and the Justice Department who are promising tougher enforcement of laws covering competition in agriculture. On the day of the August 7 meeting, a front page story in the St. Louis Post-Dispatch revealed that Monsanto's rival, DuPont, the owner of Pioneer Hi-Bred International, has given financial backing to OCM.

For the past two years, OCM has been studying competition in the U.S. seed industry and holding meetings with farmers, says Keith Mudd, a Monroe City, Missouri farmer who plants part of his 1,800 acres to soybeans that all have the Roundup Ready trait. And about three-fourths of his corn has Bt traits.

The group contends that Monsanto controls 90% of the biotech traits sold in corn, soybean and cotton seed to American farmers. That's the traits, not the seed itself, through licensing agreements with competing seed companies, Mudd says.

"We've been extremely diligent in documenting what we've been saying," Mudd said last week when he introduced a panel of legal and economic experts to talk about "competition issues in the transgenic seed industry."

"OCM believes farmers should have as many choices as possible when purchasing their seeds," Mudd told the meeting.

Later, Lee Quarles, a spokesman for Monsanto, disagreed with OCM's numbers, and its assertion that the seed industry isn't competitive enough.

Of OCM's estimate of 90% control of traits, Quarles said, "That is not accurate."

"We broadly license our technology," he told Agriculture Online. "We recognize that farmers want to invest in competing technologies and seed brands." The company has licensed agreements with more than 200 seed companies, including its biggest competitors.

Quarles cited statistics on the usage of Monsanto traits to show that OCM is on the high side. Only in soybean seed, where Monsanto's Roundup Ready traits are found in 94 to 95%, are they close, he said. Monsanto traits are found in 78% to 83% of corn seed and between a third and two-thirds of cotton seed. The company has lost about 10% market share in cotton seed since it acquired the cotton seed company Delta & Pine Land Co. in 2007. And this year, Pioneer gained market share in corn.

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