By John W. Boyd, Jr. and Mike Weaver
This article first appeared in The Hill.
Earlier this year, we planted our crops — soybeans, corn, and wheat — and began feeding our spring chickens. Farmers like us have been doing this for generations.
But next year, when we turn to our spring tasks again, the entire farming economy will have shifted under our feet as a result of a merger wave currently underway among the world’s agricultural giants. They produce the chemicals and seeds our businesses need.
When they are done, the market will be dominated by two large and two smaller companies — spelling disaster for American farmers and consumers who will see food costs go up and innovation decline.
This series of multi-billion dollar agriculture mergers will have deeply worrisome effects in the United States. Monsanto is set to merge with Bayer in a $66 billion deal, meanwhile Dow Chemical and DuPont Chemical are merging to create a $130 billion company. ChemChina recently bought Syngenta for $43 billion. The Department of Justice is in the midst of reviewing the first two mergers, and the Federal Trade Commission approved the third earlier this year
These mega-mergers are happening with barely a murmur of concern from elected officials in Washington. The Senate Judiciary Committee held a single, brief hearing regarding the mergers last year before the presidential election, and only a few members of Congress have sent letters to express their anxiety. Earlier this year, when the Senate held its confirmation hearing for Sonny Perdue to be Secretary of Agriculture, not a single senator raised the matter with him.
This month, the Senate is set to vote on whether to confirm the nominee to lead the Department of Justice’s Antitrust Division, Makan Delrahim. At Delrahim’s hearing, not a single senator asked a question about any of the two mega-mergers, which Delrahim will ultimately decide on.
While talk of the Bayer, Monsanto merger has been hushed in Washington, it is big news for farmers. Its impact on farmers and agricultural workers will have immense, adverse effects.
Make no mistake — farming families and communities across the nation will pay the price for these giant mergers, as profits and incomes continue to drop at alarming rates. Last year, net farm income dropped 15.6 percent, and it’s projected to drop another 8.7 percent this year. Meanwhile, debt is increasing, and capital reserves are declining.
By next spring, America’s farming communities will have endured years of intense fiscal stress. If these mergers go through, when farmers go to buy seeds or chemicals, they will have a very limited — and likely more expensive — set of options. For example, if merged Monsanto and Bayer would control 70 percent of all cotton seed sales in the United States. Monsanto-Bayer would own 69 percent of the patents for the genes that give row crops herbicide tolerance. It would be the world’s largest vegetable seed company. The company would yield incredible power, and it would have a say in the price of almost every row crop seed sold in the United States. Moreover, Monsanto-Bayer and Dow-DuPont would dominate corn seed, producing 77 percent of that market, and canola seed, selling almost 100 percent of the major crop varieties.
For farmers like us, these are more than numbers and statistics. We are small scale producers who have to suffer through major economic setbacks to our businesses, yet these companies expect us to simply “suck it up” and deal with the consequences of their actions. We want to be able to provide for our children, pay our mortgages and continue farming.
Mergers like these put the squeeze on us.
For example, in the mid to late 1980s, farmers paid an average of $8 for a 50-pound bag of soybean seed. Today, the cost is $60 a bag — an astronomical price jump even after adjusting for inflation. Even worse, the farmers get for selling a bushel of the soybeans has only increased from about $7 to $9 over the same period. The planned merger between Monsanto and Bayer would be the final blow, and we don’t know if farmers will be able to withstand it.
By any measure, Dow-DuPont and Monsanto-Bayer will be a monolithic force. They will use their power to further raise prices and increase their own profits.
Product prices are not our only concern — quality is, too. For decades, Bayer and Monsanto have pursued a single-minded research and development program. Innovation in seeds, genes, chemicals and data are all integrated and focused on maintaining the profitability of Monsanto’s herbicide line of business. If Bayer and Monsanto are folded together, all of Bayer’s research and expertise into alternatives will be eliminated. Everyone, not just farmers, should be afraid of the blow to innovation and scientific research that a Bayer-Monsanto merger would bring.
The disconnect between Washington and agricultural communities has never felt so acute. Politicians say all the right things about supporting our work and our mission, but when our families’ livelihoods are on the line, major corporate voices and their quest for profit and efficiency trump ours. Washington fiddles while our farms wither.
John Boyd, Jr. is the president and founder of the National Black Farmers Association. Mike Weaver is president of the Organization for Competitive Markets.