Farm Groups Cautious of Merger Trend

Dan General, Industry News Release

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Farm groups are showing caution regarding the recent merger and acquisition trend in the agriculture industry, while companies included in the trend say innovation will benefit from the changes. At a Senate Judiciary Committee hearing Tuesday, lawmakers heard from top agriculture and commodity groups along with agribusiness leaders. During the hearing, the National Farmers Union asked for more oversight on what NFU President Roger Johnson called “failing antitrust enforcement” in Agriculture. Groups such as the National Corn Growers Association and the American Soybean Association indicated a desire to preserve competition, but add the mergers could allow for more agriculture biotech research. Agriculture industry companies at the hearing, including Monsanto and DuPont, say the mergers will allow for the expansion of innovation and choice for farmers. In calling the hearing, Committee chair, Republican Senator Chuck Grassley of Iowa, voiced concern that “further concentration in the industry will reduce choice and raise the price of chemicals and seed for farmers.” He warned that price increase would be ultimately passed on to the consumer.

From the National Association of Farm Broadcasting news service.

From: National Farmers Union

NFU Asks Senate Judiciary Panel for More Oversight of Failing Antitrust Enforcement in Agriculture

National Farmers Union (NFU) President Roger Johnson today joined a panel of industry leaders to testify before members of the Senate Judiciary Committee about the alarming trend of consolidation in agriculture.

Less than a week after 275 NFU members were on Capitol Hill requesting review of the staggering volume of mergers and acquisitions in the seed and agrochemical industry, the Committee convened a hearing to review consolidation and competition in this sector.



“NFU has been concerned about the long-term trends of consolidation in the agricultural inputs sector; specifically, the wave of merger and acquisition announcements involving five of the ‘Big Six’ seed and agrochemical companies,” Johnson told members of the committee. “These mergers will surely result in less competition, less innovation and higher prices, jeopardizing family farmers’ and ranchers’ ability to provide for our nation at a time when the farm sector is already hurting.”

Since February of this year, industry megadeals have been announced between Syngenta AG and China National Chemical Corporation, Dow Chemical Co. and DuPont Co., and Bayer AG and Monsanto Co. According to market data, these deals would result in a combined three companies controlling more than 80 percent market share of the U.S. corn seed sales and 70 percent of the global pesticide market.

“The hands-off approach we’ve seen in antitrust enforcement has led to the highly consolidated economic conditions prevalent today and the resulting vulnerability of American farmers. We must do more to prevent consolidation that results in a few firms controlling substantial percentage of market share,” Johnson said.

Johnson explained that the mergers occurring in the seed and agrochemical sector are only part of the story of mass consolidation happening across the industry. Unfortunately, the continued trend of consolidation is adding to rural job loss, increasing costs for producers, and reducing competition among only a few companies in each sector.

“The nation’s antitrust enforcement has clearly failed farmers, ranchers, rural communities, and consumers. We will continue to work with this Committee, all of Congress, and the Administration to encourage greater oversight of this concerning issue,” Johnson concluded.

Johnson’s testimony can be read here.

National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.