Bruce Rastetter
An Iowan who’s an agricultural advisor for President-elect Trump’s transition team is urging Trump to “block” some “mega-mergers” in the ag industry. Bruce Rastetter of Alden said the pending mergers of “agrochemical and seed giants” like DuPont and Dow Chemical will mean higher prices for farmers.
“There will be bundling of services, so if they combine chemical and seed and only those seed traits can take a certain chemical sold by that company, it’s naturally going to increase costs,” Rastetter said during an interview with Radio Iowa.
Rastetter also cited the proposed merger of St. Louis-based Monsanto and Bayer, which was founded in Germany more than 150 years ago.
“I have concern about competition; concern about, then, the lack of innovation; lack of multiple companies we have and the concern for choice for farmers,” Rastetter said.
If Trump’s Administration doesn’t step in, Rastetter said the four largest seed and ag chemical suppliers in the country will become just two mammoth companies — controlling between 60 and 70 percent of the U.S. corn and soybean seed market.
“Those two both start selling chemicals and seed, when they primarily did one or the other before and so the market share becomes very large, in a variety of different crops,” Rastetter said.
With two rather than four major companies, Rastetter said there will be less research to boost crop yields. He said smaller companies developing new plant varieties and traits are struggling to bring new products to market.
“The root cause of this is government regulation. It costs $150 million to create a new seed trait. Think of that. How many small businesses can do that? And then, not only the $150 million, but an uncertain timeline for when or if the government’s ever going to approve it,” Rastetter said. “So if we really want to get serious about this, yes, the mergers shouldn’t go through, but we should to fix the government problem and I believe Donald Trump will do that.”
Rastetter is an entrepreneur who has made millions by raising pork and producing ethanol. His “Summit Agricultural Group” has partnered with a Brazilian company to build Brazil’s first corn-only ethanol plant. Rastetter said those experiences give him a platform to raise the alarm about these two agribusiness mergers.
“As a businessman and as a farmer on two continents, in Brazil and the U.S., I have a unique perspective on it,” Rastetter told Radio Iowa. “And also I have been concerned that commodity groups have been tentative about saying something on this situation.”
Rastetter said Iowa Senator Chuck Grassley “shares my concerns” about these mergers. Rastetter predicts Grassley will bring up the merger issue next week when Trump’s nominee for attorney general appears before the senate committee Grassley leads.