Farmers and ranchers know market forces have led to major-company mergers like Bayer-Monsanto, but they cannot afford to lose access to technology and innovation if they go through, American Farm Bureau Federation Chief Economist Dr. Bob Young told the Senate Judiciary Committee during a Sept. 20 hearing.
“AFBF has had several – and repeated – assurances from the companies involved as to their intent to maintain as strong an innovation arm as they can,” Young said. “We have no reason to doubt, but we also are reminded of the old line: trust, but verify.”
Young noted the market for seeds, chemicals and crop nutrients is poised to shrink from six major companies to just three. He asked that regulators review these mergers not only in light of market concentration, but also the structure of the entire industry in a post-merger environment.
“Everyone’s knee-jerk reaction is to think that increased concentration will lead to higher prices for these inputs,” Young said. “Knees tend to jerk reflexively, but sometimes they jerk with reason.”
In a separate statement released to media on Sept. 14, Young talked specifically about the Bayer-Monsanto merger.
“Market forces led to deals like the one announced today, but we know that major-company mergers have a profound impact on the tools available to farmers and ranchers, sometimes to their detriment,” he said.
“This deal between Monsanto and Bayer comes close on the heels of the proposed Dow-DuPont merger,” he said. “Farm Bureau believes the Department of Justice should undertake a close review of the overall business climate that has encouraged these combinations, rather than evaluating them in isolation. Consumers must continue to have fair access to the best technologies and innovation.
“Farmers and ranchers, in particular, are interested in how these deals will impact research and development budgets for companies like Bayer and Monsanto. We depend on access to enhanced technology, and would hate to see agricultural innovation suffer at the cost of business decisions.”