Farmers Voice Concern About Possible Monsanto Mega-Merger

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(ken fager)

Last month, Monsanto, the world’s largest biggest seed seller and a major manufacturer of pesticides, announced its desire to buy Syngenta, the Swiss company that is the world’s largest pesticides and also a seller of seeds. Though Syngenta has twice said no to the takeover attempt, U.S. farmers are concerned about the impact that a merger of these two companies could have on their crops.

Monsanto’s corn seeds account for 35% of all corn grown in the U.S. each year, only slightly higher than its share of the soybean seed market in the country. Syngenta’s U.S. seed business isn’t as sizable as Monsanto but the company accounts for 25% of all pesticides sold here. A combined Monsanto-Syngenta would control more than 40% of the U.S. pesticide market.

Over the last 20 years, the cost of seed has tripled in the U.S. and the cost of pesticides have increased 11%. Some farmers worry that removing Syngenta from the market as a competitor would negatively impact farmers’ bottom lines.

“When you have that much market power, there’s too much money to be made using your market power to push the company’s interests forward,” John Hansen, president of the Nebraska Farmers Union, tells the Wall Street Journal.

Another farmer, who uses Monsanto seed for his corn but goes elsewhere for his other crops says that Monsanto’s patented seeds are overpriced.

“The only way you stop that attitude is there needs to be a competitor or competitors who can put same-level quality product out there and compete with them toe to toe,” he explains.

Monsanto claims that farmers would actually benefit from the merger by allowing growers to buy both their seed and pesticide from the same company.

In spite of Monsanto’s proposal to sell off Syngenta’s seed business and shed some overlapping pesticides, and thrown in a $2 billion break-up fee if the deal falls through, the company has yet to convince Syngenta that the $45 billion acquisition is worth taking to U.S. regulators.

In addition to questions of consolidation and competition, there is concern that Monsanto may try to shift its tax base to Switzerland; a move that would definitely draw heat from U.S. lawmakers.

“The regulatory hurdles are more challenging than implied by the announcement,” explains a Syngenta spokesperson about the company’s most recent decision to rebuff the merger proposal. “Syngenta as a stand-alone company has unrivaled scale and reach, with a strong presence in all regions and a crop-based strategy covering eight key crops.”

by Chris Morran via Consumerist