DOJ: Say No to the Monsanto-Bayer Merger

Street art portraying corn ethanol. Photo: Flickr/Jukie Bot/Creative Commons

Monsanto, the world’s most notorious seed and pesticides company, is trying to merge with another huge food and chemicals company, Bayer, to form one massive agribusiness corporation. This will form the world’s largest seed company, which will dominate the global seed market. Monsanto-Bayer will wield unprecedented political power to drive biofuels expansion and other policies that benefit agribusiness – at the expense of local farmers, communities and the environment.

The Department of Justice Anti-Trust division was in the process of reviewing the potential merger. On Tuesday, November 14, 2017, we joined a coalition of organizations to deliver a petition to the DOJ to reject the merger. Read our letter below. Thank you to everyone who added their name to it!

The Letter

To whom it may concern:

As you may know, the top six agrochemical and seed companies are currently negotiating mergers, which could result in just three powerful multinational corporations controlling this industry. If Monsanto and Bayer, Dow and DuPont and Syngenta and ChemChina form their respective proposed partnerships, the three resulting corporations will control nearly 70 percent of the world’s pesticide market, more than 61 percent of commercial seed sales and 80 percent of the U.S. corn-seed market. This poses a threat to competition, job security and innovation in an economy where farmers are already struggling.

The Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing on these mergers and concerns were raised from Senators on both sides of the aisle. These mergers pose significant threats to U.S. security interests; undermine food security in the United States and worldwide; disrupt trade flows; and accelerate the international consolidation of the food and agribusiness industries to the detriment of American farmers, rural communities and consumers. Further, the mergers will eliminate head-to-head competition in agricultural innovation, crop seed and chemical markets and reduce opportunities for pro-competitive research and development (R&D) collaborations.

Workers are already being harmed by the proposal of these mergers. Since DuPont agreed to buy long-time rival Dow, 1,700 of the 6,000 corporate employees in Delaware have been laid off and executives have cut at least $300 million from its research budget. By reducing the number of companies in a sector, it is common for deals to result in elimination of research funding and massive layoffs. I don’t want to see massive job loss and elimination of critical research occur in my state as a result of these mergers.

The majority of the national farming associations agree that these mergers will negatively impact the livelihoods of American farmers. The National Farmer’s Union has expressed concern about national security, global food security, energy security and global trade. The National Corn Growers Association is worried that domestic regulatory hurdles and delays in international approvals provide significant hurdles for market entry and that it will be incredibly difficult for farmers to keep up. The American Soybean Association and National Cotton Council have also expressed concerns about a loss in competition and research and development.

Innovation and competition will decline sharply if these mergers are allowed to pass. The vertical integration of existing technologies will create platforms that are even more dominant than those we see today. Farmers who currently use products from multiple companies will find it harder to purchase a range of products because they will have fewer companies to choose from. This will make it exceptionally difficult for smaller companies to enter the market and gain new customers. These vertically integrated platforms will also remain the same for years to come due to the reduction in research and development.

Monsanto already possesses a 97 percent market share for soybean traits, a 75 percent share for corn traits, and a 95 percent share for cotton traits, a combined Bayer-Monsanto would have a greater (and for cotton a dominant) share of the seed market, where its traits are promoted. These market shares –by any antitrust metric — would be considered monopolistic.

Furthermore, these mergers will create a lock-in effect that will stifle investment in new agricultural companies attempting to enter the market. Taxes associated with capital gains will de-incentivize investors selling their valuable shares in the merged companies, making it difficult for small businesses to attract enough investors. The top companies will gain incredible control over the market without any added incentive to improve, become more sustainable or help local communities, farmers and businesses in my state.

People across my state are overwhelmingly concerned with these mergers, as well as farmers, beekeepers and Members of Congress on both sides of the aisle. I urge the Department of Justice to examine consolidation of the seed and agrochemical industry with a fair and balanced review. These companies are already engaging in anti-competitive behavior when it comes to innovation, research and development.

Please reject these mergers in the interest of the American public, our food security, environment and economy.