Consolidation or domination?

It will be interesting to see how Europe will respond to the world’s biggest GMO seller becoming a European company

The German pharmaceutical and chemical giant Bayer has recently announced plans to acquire US seed company Monsanto for $66 billion with the aim to create the largest supplier of seeds and agricultural chemicals in the world.

Perhaps best known for its aspirin products, Bayer, however, also sells agricultural and animal health products, and it has a biotech business. Bayer’s bid to acquire Monsanto comes at a time when falling crop prices have caused a dent in farm profits, since farmers have less to pay for chemicals and seeds. The German company however seems confident in its ability to enhance efficiency and productivity by creating a one-stop shop for seeds, crop chemicals and computer-aided services to farmers.

The Bayer-Monsanto deal is expected to be completed by the end of 2017. Analysts however are anticipating pushback to this deal, including resistance from farmers within the US itself, who would wary about a merger between the largest players in the agricultural supplies market. Farmers would rightly be concerned that they will have less choice and that product bundles offered by the Bayer-Monsanto merger will become more expensive.

Bayer’s bid to purchase Monsanto is part of a larger wave of consolidation moves among agribusiness firms. US chemical giants DuPont is merging with Dow, and the China National Chemical Corp. is buying the Swiss based Syngenta, which is currently the world’s biggest seller of agricultural chemicals. If all these deals close, three companies would control nearly 70 percent of the world’s pesticide market and 80 percent of the US corn-seed market. Regulators in the US may also be somewhat wary of these deals, based on the combined control these mergers would have over agricultural products. However, given the corporate influence over government policies, the rejection of these deals is unlikely.

It will also be interesting to see how Europe, famously opposed to GMOs, will respond to the world’s biggest GMO seller becoming a European company. Yet, the consolidation of large agribusiness giants is not cause for concern in Europe or the US alone. Agribusiness companies have immense penetration across rural areas of developing countries, including our own. Using free trade neoliberal policies and deregulation of markets, agribusiness have broadened their scope of operations around the world.

Agribusiness concerns claim that the profits they make help drive constant innovation, and the research and development, needed to help grow more crops, in a more efficient and sustainable manner. Yet many such firms, particularly Monsanto, have come under attack for the promotion of genetically modified food, for patenting seeds, and suing farmers for saving and replanting its seeds.

The Indian environmental activist, Vandana Shiva, is one of the main organisers of the “Monsanto Tribunal and People’s Assembly” being organised by several civil society organisations at The Hague, this coming month. The civil society ‘tribunal’ aims to hold companies like Monsanto accountable for alleged crimes against humanity, human rights violations and ecological destruction.

For activists such as Vandana Shiva, the problem is the profit driven corporate interests which can manipulate the existing intellectual property rights regime to threaten the basic rights of people, be it the farmers’ rights to seed, or people’s rights to affordable medicine. The potential for manipulation would presumably increase as these corporations become fewer and larger. So the recent bid by Bayer to buy Monsanto is certainly going to be viewed as an alarming development rather than good news for food security or alleviation of rural poverty, from such a perspective.

One wonders though if the aforementioned concerns, within the West and from across the rest of the world, will be able to deter further consolidation of agribusiness giants, or will the promise of productivity and the lure of profit, win another battle.

Published in The Express Tribune, September 23^rd, 2016.

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