Iowa Senator Chuck Grassley is holding a hearing this morning to study the impact on consumers and farmers of the merger trend in the seed and agrochemical industries.
Grassley, who chairs the Judiciary Committee, says five of the six big corporations that are undergoing antitrust reviews — or soon will be — have agreed to send representatives to testify at the hearing.
“I’m very disappointed that ChemChina declined an invitation to testify,” Grassley says. “ChemChina would have brought a unique perspective to the table because China’s government owns them. They’re called a state-owned enterprise.” The agrochemical industry provides basic inputs to farmers for growing crops and he says it appears the industry is on the precipice of a significant structural transformation. Grassley says, “the consolidation wave has become a tsunami.”
“I continue to hear worries from farmers about pricing, especially about the third major transaction, between Bayer and Monsanto,” Grassley says. “It’s no secret that I’ve been alarmed about vertical integration in agriculture where companies own the entire process, from conception to consumer.”
In his recent dealings the pharmaceutical company that makes EpiPens, Grassley referred to Mylan as a monopoly, as no one else makes those medical devices. While he’s used words like “consolidation” and “concentration” to describe what’s happening in the seed and agrochemical industry, he is not calling it a monopoly.
“In this particular instance, you’d have to get down to one of these companies, I suppose, to call it a monopoly,” Grassley says, “and I’m sure that the Justice Department would never let that happen.” Vertical integration can leave the farmer with fewer choices of who to buy from and sell to, Grassley says, and it hurts a farmer’s ability to get a fair price for his products. Vertical integration can also lead to consumers having fewer choices and higher costs at the grocery store.
An Iowa State University study shows the collective costs of seed, chemicals and fertilizer for an acre of soybeans has gone up 94 percent in the last 20 years. The hearing starts at 9 A.M./Central.
Grassley’s Democratic opponent Patty Judge released the following statement:
“As a family farmer for decades, a mediator during the Farm Crisis, and the former Iowa Secretary of Agriculture, I know that family farmers face tremendous challenges each and every day. Whether it’s volatile commodity prices or uncertain markets, we must remain vigilant as we support and protect family farmers across the state,” said Patty Judge. “We must ensure that Iowa farmers have access to a consistent and competitive marketplace for seed and chemicals. Innovation and competition benefit both farmers and consumers in Iowa, which is why I believe the Federal Trade Commission and Department of Justice should carefully review any mergers to guarantee they benefit family farmers and consumers. If this review does not find a sufficient benefit, we must take action to stop this merger and protect a competitive marketplace.”