The African Centre for Biodiversity
PO Box 29170, Melville 2109 South Africa
Tel: +27 (0)11 486 1156
In December 2016 Monsanto shareholders voted in favour
of the sale of the company to Bayer for US$66 billion, making it the
largest-ever foreign corporate takeover by a German company.
Both Bayer and Monsanto are major global manufacturers of agrochemicals and
seeds, including genetically modified seed. A merged entity would be the
world’s largest supplier by sales of both seeds and pesticides, controlling 29
percent of the world’s commercial seed markets and 24 percent of the world’s
pesticide markets. Bayer and Monsanto are major actors in South Africa’s seed
and agrochemical industries. The deal will require approval from about
30 regulatory agencies around the world, including by South Africa’s
The African Centre for Biodiversity (ACB), with the support of the Rosa
Luxemburg Stiftung, has produced a briefing paper titled, ‘The BAYER-MONSANTO
merger: Implications for South Africa’s agricultural future and its smallholder
farmers” which outlines that the proposed merger is taking place against a
backdrop of other related mega-mergers in the seed and agro-chemicals sectors:
between US chemical giants Dow and DuPont in a deal estimated to be worth
US$130 billion, and China National Chemical Corporation (ChemChina) and
Swiss-based Syngenta in a deal worth around US$43 billion.
According to the briefing, if all the mergers are approved, just three
corporations will control about 60% of the global commercial seed market and
64% of the agrochemical market. The mergers will allow the corporations to
claim “too big to fail” status, justifying future bailouts using public
resources, and further reducing accountability and opportunities for democratic
control of the food system.
The ChemChina-Syngenta merger has already been granted conditional approval by
the South African Competition Commission, while the Commission has just
completed the Dow-DuPont merger investigation and is awaiting remedies by the
parties before it concludes on the matter. The Bayer-Monsanto merger is
expected to be filed with the Commission very soon.
“These mergers have raised major competition concerns globally. Regulators fear
a decline in innovation and investment in research and development (R&D).
Civil society and farmer organisations are concerned about further
concentration of input supply, leading to higher input prices and reducing the
choices available to farmers” says Dr Stephen Greenberg, research co-ordinator
at the ACB.
Already, consolidation in the global seed industry between 1994 and 2004 aligns
with a more than doubling of seed prices relative to the prices that farmers
received for their crops during that time.
The six merging companies currently control close to three quarters of all
private sector agricultural R&D. The focus is primarily on a small number
of lucrative crops – led by maize and soya both globally and in Southern
Africa. These two crops are the mainstay of standardised industrial food and
feed production globally. The sheer resources available to these companies
allow them to shape the entire agro-food system based on considerations of
their private profitability.
According to Mariam Mayet, Director of the ACB “the result is marginalisation
and neglect of the wide range of agricultural biodiversity previously available
to farmers and ultimately consumers. Over the past four decades there has been
an alarming drop in the range of crops and seed varieties in use. This exposes
the food system to vulnerability. Further concentration will only consolidate
ACB’s briefing points out that the move towards integration between seed and
agrochemical markets places farmers on a technological path that is becoming
increasingly difficult to escape. Farmers have fewer choices about what crops
they plant and what inputs they use. This model of production deepens
inequality and threatens the integrity of land and water resources.
“The implications of the merger therefore go well beyond competition in
segmented product markets. The ACB calls on the South African Competition
Commission to reject the merger (when it is filed) in the public interest. We
also call on the South African government to rein in the power of corporations
and to channel more resources towards decentralised R&D in partnership with
farmers and consumers” say Greenberg.
full report PDF
Ms Mariam Mayet: Director ACB firstname.lastname@example.org
Dr Stephen Greenberg: Research Co-ordinator ACB email@example.com
Mr Benjamin Luig: Rosa Luxemburg Stiftung Benjamin.Luig@rosalux.org