Not Everyone Buys Into Bayer Buying Monsanto
The deal will consolidate control of more than a quarter of the world’s seed and pesticides market and create the largest seed and crop chemicals company in the world, according to a statement by the National Farmers Union (NFU). Here’s a statement from Roger Johnson, NFU president:
“Bayer’s acquisition of Monsanto culminates the latest and most disturbing round of consolidation amongst the handful of companies that control both U.S. and global agricultural markets. Three massive companies now control the markets that supply agricultural inputs like seeds, traits and chemicals. This extreme consolidation drives up costs for farmers and it limits their choice of products in the marketplace. It also reduces the incentive for the remaining agricultural input giants to compete and innovate through research and development.
While we appreciate the significant divestitures agreed to as part of this approval, Farmers Union condemns DOJ’s continued rubber-stamping of mergers in the food and agriculture arena. We will now focus our efforts on ensuring the promises made by Bayer and Monsanto throughout this approval process are kept. The company must continue to increase the productivity of American family farmers by delivering localized solutions in seed, trait, and crop chemical innovation.”
The Organization for Competitive Markets, a group that focuses on agricultural antitrust and trade policy, also disagreed with the DOJ’s decision with this statement:
“The news makes it clear that our anti-monopoly laws are completely worthless and the U.S. Department of Justice merger review process is pointless. Economists have well established that there is a strong likelihood of market abuse when four companies control 45% of the market, and the fact that DOJ has now allowed one company to control 77% of all seed corn, 69% of all seed traits and 58-97% of the markets in cotton, soybeans, and canola, means DOJ has just authorized a monopoly.
America’s family farmers will pay the price for this action, and consumers will see fewer choices in the market. Where is the justice in the Department of Justice?”
What Bayer Says
In response, Bayer issued this statement:
"The challenges American growers face on a daily basis demand continuous access to new innovation. Increasing yields enough to feed our growing planet sustainably and profitably demands nothing less. Combining our company and Monsanto will enable us to better help growers meet this critical need—for the sake of their families and the people across the world they feed and clothe.
The critical need for innovation in agriculture was cited during the 2016 congressional hearings on merger activity in the agriculture sector. In that session, National Corn Growers Association CEO Chris Novak pointed to the substantial R&D investment we have committed to creating from combining Bayer and Monsanto, which “will ensure continued innovation for agriculture. In an era of declining federal and state agricultural research investments—these agribusiness research investments are vital to the future of food production.”
Frankly, we couldn’t agree more.
Of course, competition is vital too, and we have worked productively with regulators around the world to preserve continued grower choice. Review by these regulators has been robust and in the words of the United States Department of Justice produced a result that 'fully resolve[d] all horizontal and vertical competition concerns.'
We are competing with other very strong companies that offer similar products and have strong R&D capabilities. We will only succeed with pricing and selling our products if our value proposition to our customers is better than that of our competitors and if we continue to innovate."