Following a period of rumor and speculation about various scenarios for deals between chemical giants, Dow and DuPont recently announced plans to merge. The new company will control 38 percent of soy seed sales, 41 percent of corn seed sales and 17 percent of “crop protection” chemical (such as pesticides and herbicides) sales.
After the deal, Monsanto will retain its leadership position in the GMO trait market however, as most of the GMO traits available in seeds sold by DuPont are licensed from Monsanto. The newly merged DowDuPont will split into three separate, public companies after 18 months to two years – one each for agricultural seeds and pesticides, industrial materials and specialty chemicals.
This deal is bad news for the food system. The dominant seed/chemical companies will be reduced from six to five, and seed prices will surely rise. Farmers will both buy from and sell to monopoly markets, giving them little choice in which companies they do business with, putting them at an economic disadvantage. This year was already bad for corn and soybean prices – the USDA reported a 36 percent drop in farmer income due to low crop prices.
“Streamlining” and “synergy” are always touted benefits of new mergers. What that actually translates to is job loss. DuPont is already saying it will cut at least ten percent of its 63,000-strong workforce, and according to early reports, less money will go toward research and development.
Less research in the seed sector could mean that farmers end up with even fewer choices for the varieties of crops they grow. While climate change continues to cause extreme weather patterns and dramatic differences in regional growing conditions, fewer options in a more consolidated seed pipeline is the exact opposite of what farmers need.
Not only will this merger provide market power for the new company, but it will also ensure that DowDupont, already a major player in the industrialized, chemical-intensive agriculture system, has continued political power. A company of this size will be able to lobby even harder for fewer regulations, to make sure its GMO and chemical technology is approved and to keep GMO labels off of food, thereby keeping consumers in the dark.
The Department of Justice and the USDA held hearings in 2010 on anticompetitive behavior in the agriculture industry, and their investigation into Monsanto’s conduct in seed markets was never finished. Monsanto already has extensive licensing and legal deals with DuPont and the integration of Dow into this agreement does little to quell fears of anticompetitive behavior.
Tell the Department of Justice to block this merger to prevent the further corporate control of the agriculture industry.