October 24, 2016
The recent mergers and acquisitions in the seed industry — including Dow Chemical’s and DuPont’s proposed merger, ChemChina’s proposed acquisition of Syngenta, and Bayer’s proposed acquisition of Monsanto — could have great consequences. These three transactions are substantial, and they could reduce the six major agribusiness companies to four.
BIG IMPACTS: Seed industry mergers and acquisitions could have serious consequences for farmers and consumers. (Photo: Hiro_photo_H/iStock/Thinkstock)
I serve as the ranking member of the antitrust subcommittee, and I take seriously my responsibility to provide oversight on potential consolidations and to ensure that antitrust laws are vigorously enforced to protect competition. In the past year, we’ve examined many issues, including competition in the thriving craft brewery business and the rising costs for health care and prescription drugs. And recently, along with Chairman Chuck Grassley, I led a hearing in the Senate Judiciary Committee to examine the impact of these potential seed industry consolidations on farmers and consumers.
First, we want to make sure that there is robust competition to develop new and better products for farmers and consumers. We want to encourage innovation, and one of the best ways to do this is through companies competing with each other. With less competition, farmers face companies focusing on limited areas of research and not competing with each other for the next technological breakthrough. This is especially important during our current times of water shortages and other challenges, when we need more research, not less.
Sen. Amy Klobuchar
Another concern is that these consolidations will encourage the merged companies to integrate vertically, meaning that each company will assume control over its entire production process, from research to production to transportation. This would diminish incentives for these larger companies to compete for customers. It would also make it harder for smaller research companies to enter the market in the first place, and to grow and expand.
Let’s be clear, we ask a lot of rural America. Farmers make large investments in their crops and their livestock, buildings and equipment, and can face heavy losses due to natural and market circumstances beyond their control. … At the same time, our consumers expect to have farm goods and products at a fair price.
Our farmers and consumers face enough of these challenges without adding the additional burden of an anti-competitive market. Consumers shouldn’t be faced with unnecessary, higher costs because of lack of competition. Farmers don’t need costs for seeds going up more, either. They also have a right to be able to support their family and not be the ones to bear the brunt of major consolidations.
It is our responsibility to consumers and to the farmers who produce our food to level the playing field. That’s why I’m going to keep pushing for competition in the seed and agriculture industry.
Klobuchar is a U.S. senator from Minnesota.
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