How the union of two controversial companies could affect your family's grocery bill
Posted June 1
American families are increasingly choosing to buy food from local farms, but the companies that sell seeds and pesticides are consolidating and getting bigger.
On the heels of a proposed merger between DuPont and Dow, as well as one between ChemChina and Syngenta, Bayer has proposed to buy the world's largest seed producer, the St. Louis-based Monsanto, a company so universally maligned that Modern Farmer magazine once asked “Why does everyone hate Monsanto?”
For now, Monsanto has declined Bayer's offer, saying it's worth more than the proffered $62 billion. But the company said its open to further discussion, and the prospect of a merger has environmentalists and market analysts in a lather.
Protests were held across the world earlier this month, and a MarketWatch analysis pronounced a merger "bad news for anyone who farms — or eats."
Both companies produce agrochemicals, seeds and genetically modified crops, making them corporate villains among environmentalists and natural-food advocates who worry about the long-term health risks associated with genetically modified food and pesticides. Put these two together and what could possibly go wrong?
Plenty, wrote policy analyst Leah Douglas for CNN. "Seed prices could rise for farmers, consumers could see more genetically engineered foods on supermarket shelves and our global agricultural system could end up depending on just a few companies to meet a high percentage of the world's agricultural needs."
Even before the recent acquisitions, six companies (Syngenta in Switzerland, Bayer and BASF in Germany, and Dow, Monsanto and DuPont in the U.S.) accounted for 60 percent of the commercial seed market and more than 75 percent of agrochemicals, Douglas said.
"If all of the mergers were approved, those top six dominant companies would shrink to four, with most power concentrated in just three," she wrote.
Monsanto’s market dominance already coerces farmers into buying its products, Douglas said. The company sells more than 80 percent of soybean and corn seeds in the U.S.
And a report in MarketWatch charged that no one will benefit from the mergers but the companies. “The consolidation and driving out of smaller competitors, and controlling the marketplace and raising prices of seeds and pesticides for farmers worldwide, is going to be a real shock to the food system,” Robert Lawrence, a Johns Hopkins School of Medicine professor, told MarketWatch reporter Emma Court.
Meanwhile, the worldwide howling about the potential sale isn’t the only reason Monsanto executives might be reaching for Bayer aspirin this week. The Minneapolis Star Tribune reported that soybean growers in Minnesota have been advised not to plant a new type of soybean that Monsanto debuted this year.
While it has been approved in the U.S. and Canada, it has not been approved for export to the European Union, the second largest consumer of U.S. soybeans, after China. And suppliers fear that approved and unapproved soybeans could be mixed, and shipments to Europe might be rejected, as has happened before in China.
There is one bit of good news for Monsanto, however. A recent report issued jointly by the United Nations and the World Health Organization said the ingredient in the company's much-maligned pesticide, Roundup, poses no cancer risk.
The report contradicts another one, issued last year, that said glyphosate is "probably carginogenic." But Wired magazine explained that the latest study applies more to real-life scenarios — as in, "if you eat cereal every morning made from corn treated with glyphosate," whereas the one last year considered "whether chemicals can cause cancer under any possible situation — realistic or not."
Bottom line: Enjoy your Corn Flakes. But if Bayer and Monsanto merge, they may cost more in coming years.