The U.S. Department of Justice issued a stern warning in its lawsuit against the conditionally-approved mega-merger between Bayer and Monsanto in June.
The anti-competitive price effects of the merger would, according to the DOJ, “likely result in hundreds of millions of dollars per year in harm, raising costs to farmers and consumers.” The Justice Department warned that the combining of Bayer and Monsanto would reduce competition for vegetable seeds, likely driving up prices. Further, farmers might see prices for GMO cotton, canola, corn and soybean seeds increase, as well as price increases for herbicide and seed treatments.
After imposing some limited divestments on Monsanto, the DOJ approved this merger, enabling Monsanto to hide its controversial name brand while giving Bayer anti-competitive control over seeds, pesticides, farmers and consumers worldwide.
But the harm to consumers and farmers will still exist.
The DOJ is on the brink of essentially authorizing a monopoly. This is bad news for nearly everyone on the planet except Bayer and Monsanto executives and shareholders. Aside from a combined Bayer-Monsanto, only three other seed companies will be in the market manufacture and sell these products.
Farmers overwhelmingly object to the merger. Ninety-three percent of farmers expressed concern that the merger will harm independent farmers and farming communities. Farmers’ top three concerns were that Bayer/Monsanto “would use its dominance in one product to push sales of other products;” “control data about farm practices;” and that the merger will create “increased pressure for chemically dependent farming.”
Aside from the overwhelming number of farmers that have already voiced opposition to the merger, the DOJ has received petitions from over 1 million Americans urging the agency to block the merger. This month, thousands of farmers and Americans resubmitted comments urging the agency to reverse its harmful conditional approval. Iowa Attorney General Tom Miller joined a letter with the state attorneys general from California, Massachusetts, Mississippi and Oregon submitted a letter opposing the merger.
Bayer and Monsanto’s merger comes at a moment when powerful companies push farmers into dependence on their products, locking farmers into long-term contracts. A consolidating food system means less choice for consumers.
“This mega-merger will give the company a stranglehold on the vegetable seed, cottonseed, corn and soy seed markets, which will only increase prices and put farmers’ livelihoods at risk,” noted Ben Burkett, a Mississippi vegetable farmer and past board president of National Family Farm Coalition.
For farmers, the merger will likely push up production costs. Farmers’ concerns are backed up by history, in which mega-mergers have diminished competition and options for both farmers and consumers while promoting more chemical-based farming — in turn harming our environment and health.
As seed and GMO companies have consolidated over the past 20 years. Much of that price increase comes from companies increasing fees for seeds as they genetically modify new traits into our food. The cost of these new technologies has exploded the price of seeds; between 32 and 74 percent of the price of seed for corn, soybeans, cotton and sugar beets in the United States and the European Union was estimated to reflect technology costs or the cost of seed treatments.
Farmers’ net profits continues to shrink. Reduced earnings have forced most farmers to take on second jobs; 82 percent of U.S. farm household income is expected to come from off-farm work this year, up from 53 percent in 1960.
As the Trump administration moves to give another handout to corporate agriculture, family farmers will pay the price.
Farmers aren’t fooled by claims that Monsanto divestments will make this merger beneficial and non-monopolistic. Consumers and policymakers shouldn’t be fooled, either. On our farms, in our soil and on our supermarket shelves, the merger of Bayer and Monsanto means fewer options for a cleaner, healthier and more farmer-friendly food system.
As the Department of Justice moves to make a final decision, they should stop this merger and save farmers and consumers from this new monopoly.