Yesterday, NRDC sent a letter to the U.S. Department of Justice to express its strong opposition to the creation of the largest seed and chemical corporation in the world—a new industrial goliath anticipated from the German chemical and pharmaceutical conglomerate, Bayer AG’s, proposed takeover of the U.S. agrochemical and biotechnology corporation, the Monsanto Company.
The takeover, announced in September, proves that the old adage “bigger is better,” while sometimes true (e.g., generally for ice cream scoops), isn’t always. Indeed, if you are a farmer, consumer, or any of the pollinators critical to our nation’s food supply and environment—such as the bees and monarch butterflies facing massive new threats from pesticides in recent years—this big business merger could be very bad news. Here’s why:
A Shrinking Circle of Mega-Corporations
The proposed Bayer takeover of Monsanto isn’t happening in a vacuum. It’s part of a larger trend of consolidation in the last several decades of the largest corporations buying up other smaller agricultural companies. For example, between 1985 and 2000, the “Big Six” agricultural inputs firms—i.e., Bayer, Monsanto, the Dow Corporation, DuPont, Syngenta AG, and BASF—acquired about 75% of the small to medium companies doing agricultural biotechnology research.
Now with few smaller companies left, the Big Six are looking at gobbling up one another. In the past year, three mega mergers have been proposed that would turn the Big Six into the “Big Four:” the “merger of equals” between Dow and DuPont; a $43 billion bid from the Chinese state-owned chemical company, ChemChina, for the Swiss seeds and pesticides manufacturer, Syngenta; and now the $66 billion takeover bid from Bayer for Monsanto—by far the largest, and maybe the most consequential of them all.
Growing Costs for Farmers and Consumers
It may come no surprise that as the number of companies making seeds and pesticides have decreased, costs have ballooned. In a striking example, while the price of corn seed has nearly quadrupled in the last 20 years, the price per bushel for corn is roughly the same as it was at in 1996. These costs may be due, in part, to the proliferation of genetically modified seeds—skyrocketing from 25% of all U.S. corn seed planted in 2000 to 92% of all corn seed in 2016.
The Bayer takeover and other mergers are expected to drive up prices even further for farmers already struggling with seed costs. A Texas A&M University study, for example, found that with respect to cotton, if Bayer (which controls 38.5% of the cottonseed market) successfully acquires Monsanto (which controls 31.2%), the price of cottonseed is likely to jump anywhere from 18% to 20%.
These price spikes wouldn’t be from any value added to the seeds, but from the greater market power of the new mega-companies. In other words, farmers—and ultimately consumers—would get the pinch while Bayer and other big players would reap the rewards. For these reasons, many agricultural associations have raised serious concerns about the proposed merger, while others, like the National Farmers Union, have condemned it publicly.
Bad News for Bees and Other Pollinators
Farmers and consumers aren’t the only ones who have to worry, as the proposed Bayer takeover and other mergers also promise to cement the trend of chemical-laden agriculture now threatening our nation’s bees and other pollinators like never before.
As we’ve written about, bees and other pollinators are critical to agriculture—pollinating about one-third of all the food we eat. Frighteningly, however, they are also dying at rates that may endanger the global food system. Last year alone, beekeepers saw an astounding 44% percent of their hives die. And while they’ve been able to keep colony numbers up artificially (i.e., by splitting healthy hives into two and importing queen bees grown by breeders), many believe such practices are unsustainable if bees keep dying at record rates.
While the assault on bees is coming from multiple directions (including disease, habitat loss, and climate change), overuse of modern pesticides, such neonicotinoids or “neonics,” is a key offender. In fact, one neonic pesticide was found to be so toxic to insects that the Canadian government just recommended banning it for almost all uses, from home gardens to corn fields.
With just a handful of companies controlling both the seeds and pesticides markets, however, the chance for reducing the role of bee-toxic pesticides in agriculture is slim indeed. Currently, most of the Big Six genetically modify seeds to make them resistant to certain pesticides, which allows farmers to dump those pesticides on their fields in large quantities before there’s actually a pest problem. Under this system, companies selling both the genetically modified seeds and the accompanying pesticides get to cash in twice.
That’s why consolidation of the Big Six to the Big Four is a big problem—because the more the pesticide manufacturers become the same people who are selling the seeds, the more incentive there is to make and market seeds in a way that accelerates the current trend of chemical-heavy growing. (Indeed, Monsanto is already working on a corn seed that “will have 14 [genetic] traits and allow farmers to spray five different kinds of herbicide”). This is especially concerning for companies like Bayer, whose bread and butter has historically been in pesticides.
It’s Not Too Late
With the future of our food and our pollinators at stake, it’s good to know that it’s not too late for the government to stop these mega-mergers. While not all the official paperwork has been filed yet, it’s believed that the Department of Justice will eventually perform an antitrust review of the Bayer takeover proposal—and if the Department finds that it will decrease competition (and it almost certainly will), the agency can move to prevent the merger.
Because it’s never too early to take precaution against a what could a big bad deal for all of us (bees included), we hope the Department wastes no time in scrutinizing the Bayer takeover and other mega-mergers and stops them before we’re all paying the price.