Bayer’s $62.5 billion purchase of Monsanto would create a corporate giant endangering organic and independent farmers. By Honor Eldridge.
On March 21st, Bayer won approval for its $62.5 billion (£44 billion) purchase of Monsanto. The EU competition commissioner, Margrethe Vestager, decided after long deliberation to approve a takeover that would create a company (informally dubbed “Baysanto”) with a share of more than a quarter of the world’s seed and pesticides market.
Bayer has won permission from the EU, but the battle isn’t over yet. It still needs permission from the US and that doesn’t look like it will be smooth sailing.
Up against the US courts
The US Department of Justice is looking into the merger and is unlikely to reach a final decision for many months. Just as it did in Europe, Bayer has divested from key businesses in order to reduce questions over monopoly. The Department of Justice does not think the current proposal is sufficient.
US politicians across the country have similarly raised questions over the monopolistic control that Baysanto would have. The Vermont senator and former presidential candidate Bernie Sanders said the attempted takeover was “a threat to all Americans”, adding that agribusiness mergers “boost the profits of huge corporations and leave Americans paying even higher prices”. From the Republicans, the senior senator for Iowa, Chuck Grassley, has raised concerns about the impact that agribusiness mega-mergers will have by limiting the ability of farmers to make independent choices.
Still, Donald Trump’s administration has encouraged a shift away from federal regulation towards a more “business-friendly” approach that has harmed the environment and low-income Americans. Whether the Department of Justice will act to oppose a large corporate merger against the wishes of the administration is yet to be seen.
US farmers oppose consolidation
Like farmers in the EU, US farmers have been vocal in opposing the merger. According to a recent poll of farmers in the States, 93.7% are concerned that the merger will harm independent farmers and farming communities. One of the main fears is that the new company will have the ability in effect to micromanage vast swathes of farmland and limit choice. Baysanto would control nearly three-quarters of the seed of US cotton, giving it near-monopolistic control. The merger would increase Monsanto’s control over other areas where it is already a dominant player, including fertilisers, pesticides and some farming technology.
Europe’s organic farmers have a different perspective
Organic farmers in the US have also opposed the merger, with 90% saying they were concerned that agrochemical drift would affect their ability to continue farming organically (69.6% were very concerned). However, this fear underlines some key differences between US and EU agriculture.
First, the aerial spraying of agrochemicals, which is the primary cause of pesticide drift, has long been prohibited by all EU member states. Dicamba, a US pesticide in widespread use on GM crops, is notorious for drift since it’s a highly volatile chemical that can vaporise extremely rapidly. The chemical’s ability to easily drift onto neighbouring farms has resulted in 3.6m acres of non-GM soybeans in the US being damaged by dicamba spraying in 2017 alone.
Second, while US agriculture is associated with wide-open prairies, European farming is generally defined by smaller fields, with physical boundaries between properties. This is a result of Europe’s long agricultural history, with hedgerows, dykes, stone walls and fencing providing physical separation between fields and better protection from drift.
And third, EU organic standards require physical boundaries between organic farms and conventional farms, and insist that organic farmers maintain them. This provides better defence from potential spray drift damage.
Despite fears of the impact of the merger, organic farmers do have fewer immediate concerns since they are not dependent on the chemicals produced by either Bayer or Monsanto. In fact, these mergers might even benefit the organic movement since the press attention will increase public awareness and lead to a wider rejection of industrial agriculture.
With increasing scrutiny of the safety of neonicotinoids and glyphosate, expanding pesticide resistance and the necessity to reduce dependence on artificial nitrogen fertiliser (a key driver of climate change), industrial agriculture is failing and we’re seeing a steady growth in organic farming worldwide. In the UK, sales of organic food hit an all-time high last year, with the fastest growth coming through foodservice channels (up 10.2% to £84.4m in 2017).
But despite not being directly affected by the Bayer-Monsanto decision, organic farmers should still have serious concerns over the merger. Everyone who cares about the future of farming should oppose corporate control of our food systems. Our goal is a farming system that is healthy and sustainable, and Baysanto would create a major roadblock. We support those on the other side of the Atlantic in demanding greater scrutiny of the merger.
Honor Eldridge is policy officer at the Soil Association.