Aug 03, 2016
A new legal opinion penned by two former Justice Department officials bolsters warnings that the proposed merger between agroindustrial giants Bayer and Monsanto "is a five-alarm threat to our food supply and to farmers around the world."
The white paper (pdf) by Maurice E. Stucke and Allen P. Grunes, both former employees of the Justice Department's Antitrust Division, states that Bayer's proposed takeover of Monsanto would:
- Increase concentration in already concentrated industries for genetic traits, seed, and herbicides. For example, Bayer-Monsanto post-merger would account for approximately 70 percent of the U.S. acreage for cotton, with similar or higher shares in different regions of the U.S.
- Increase Monsanto's already significant market power and increase its dominance in herbicides and genetic traits for seed.
- Eliminate not only the direct competition between Bayer and Monsanto for traits, herbicide, and crop seed, but also the head-to-head competition in agricultural biotechnology innovation markets and reduce opportunities for pro-competitive research and development (R&D) collaborations.
- Likely lead to higher input prices, less choice and higher food prices for consumers, including fewer non-biotechnology options available to farmers and consumers.
Indeed, Stucke and Grunes write that given their findings, "the antitrust enforcers must not allow this merger to proceed."
In July, Monsanto rejected Bayer's $64 billion takeover offer as "financially inadequate," but said it was open to continued negotiations. And this week, Bayer's second-quarter figures--which revealed a weak crop sciences division--were seen by some as "justification for the acquisition."
But nothing justifies a "five-alarm threat to our food supply and to farmers around the world," declared Anne Isakowitsch, senior campaigner with global consumer watchdog SumOfUs, which publicly released the legal opinion on Wednesday.
"This new mega corporation would be the world's biggest seed maker and pesticide company," she said, "defying important antitrust protections, giving it unacceptable control over critical aspects of our food supply--undermining consumer choice and the freedom and stability of farmers worldwide."
Many have observed that the Bayer-Monsanto deal is just one of several Big Ag mega-mergers--along with those between Dow and DuPont and ChemChina and Syngenta--that "already threaten to hyper-consolidate the biotech seed industry," as Food & Water Watch executive director Wenonah Hauter said in May.
"The shocking consolidation in the biotech seed and agrochemical industry turns over the food system to a cabal of chemical companies that would make it even harder for farmers, consumers and communities to build a vibrant, sustainable food system," she said at the time.
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