Hundreds of food and farm groups are calling on recently confirmed U.S. Attorney General Jeff Sessions to step in and block a wave of billion-dollar mega mergers sweeping across America’s agriculture industry.
On Monday, more than 300 organizations — including the Center for Food Safety, Moms Across America and the Organic Consumers Association — pressed Sessions to oppose pending business deals between Dow Chemical-DuPont, Monsanto-Bayer and Syngenta-ChemChina. The organizations argue that, if finalized, the deals would hurt both farmers and consumers by drastically reducing industry competition and inflating grocery store prices.
“It is predicted that if all three deals were to close, the three resulting companies would 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,” the organizations wrote in a 15-page letter. “Such a heavily consolidated seed and agricultural input industry makes it easier for cartel-like tacit collusion that raises prices for farmers and other buyers and ultimately consumers while stifling innovation that is propelled by healthy competition in the marketplace.”
Advocacy groups dedicated to pollinator health also claimed that the deals would further devastate bee populations by promoting continued use of toxic chemicals.
Other food and farm groups to sign the letter included: Agricultural Justice Project, the American Bird Conservancy, the Center for Environmental Health, Earthjustice, the Institute for Agriculture and Trade Policy, Iowa Farmers Union, Kansas Rural Center, Michigan Farmers Union, Migrant Justice, Pollinator Stewardship Council and the Sierra Club | For the full list, click here
Dow Chemical announced it was merging with DuPont in a $130 billion agreement in December 2015.
China National Chemical Corporation moved to buy Swiss seeds and pesticides firm Syngenta for $43 billion last January.
And German pharmaceuticals maker Bayer last September entered into a $66 billion all-cash deal to buy St. Louis-based Monsanto.
“Conglomerates of such massive scale, breadth and reach, such as those proposed by these mergers, pose a real risk to our economy, to our agricultural sector, to public health, to food security, to the environment and to the general health of the agricultural and food business climate,” the groups wrote. “Dominance of this magnitude can pose both domestic and international consequences that would be irreversible, once set in motion.”
Executives from the six companies maintain the deals will strengthen research and development efforts by pooling money and technology.
They also stress that open licensing agreements with smaller competitors will ensure competition remains intact.
“By combining with Monsanto, we will be well positioned to deliver on the innovation that farmers demand,” said Bayer CropScience President and CEO Jim Blome during a September Senate Judiciary Committee hearing on industry consolidation.
The three deals — valued at a combined $239 billion — need to be reviewed by governments around the world for antitrust concerns. In the United States, the job falls largely to the Justice Department, which Sessions now oversees.
The Senate confirmed Sessions as attorney general on Feb. 8 following a 52-47 vote.
Some business analysts see the new attorney general as somebody who is pro-business and supportive of merger and acquisition activity.
Session’s confirmation came after several hours of debate and pushback from prominent Democrats, who brought up concerns related to past accusations of Sessions suppressing black voters during his time as Alabama’s attorney general.
Before his confirmation, Sessions served as a Republican senator for Alabama.
Agribusiness powerhouses have gobbled up hundreds of small-scale seed companies since 1990, research from Texas A&M University’s Agricultural and Food Policy Center reveals. Those buyouts have left just a few dozen independent sellers remaining. The vast majority of the corn seed market is dominated by four companies: Monsanto, DuPont, Dow Chemical and Syngenta AG.