Producers and consumers are at the mercy of 4 large multinationals that control the seed supply and to a great degree the food supply.
Large monopolies control almost everything on planet Earth, from news and information to seeds and food. As we speak, large corporations like Nestle are fighting their battle to control water resources as its CEO, Peter Brabeck explained that access to clean water is not a right people should enjoy.
If people behind these multinationals do not believe people should have access to clean water as a human right, what would they think about having access to pesticide-free, GMO-free food?
Unfortunately, control of the seed and food supplies is not the only problem that consumers face.
The same multinationals that seek to control food from seed to what you put on your dinner table, have either merged with or are in the process of merging with chemical companies, which makes everyone concerned with health issues question the safety and reliability of the food supply.
Under this scenario, it is more certain than ever that food and water crises are looming on the horizon. As powerful corporations control the world’s food supply, there has never been a better time to be self-sufficient and self-reliant than now.
Producers fear that the wave of mergers limit the options they have to manage their crops, because the agrochemical industry is mired in an intense process of consolidation that will leave virtually the entire business of seeds, herbicides and pesticides concentrated in the hands of four global giants.
Producers fear is that this wave of mergers will limit the options they have to manage their crops, prices and accelerate the reduction of crop diversity.
The sector was already dominated by a small number of brands before this corporate hurricane of mergers and acquisitions arrived to change the way producers work the fields.
A week ago, while Bayer outlined the agreement to acquire Monsanto, the second union of US farmers mobilized in Washington to denounce that these partnerships will further strangle their pockets.
It was an unusual event, because representatives of farmers tend to be very careful to publicly criticize the hand that feeds them.
“A consolidation of this magnitude cannot be the standard of our agriculture,” lamented the president of the National Farmers Union, Roger Johnson. “We must not allow these corporations to define the future of the field.”
The same concern came from farmers in Europe, Latin America and Asia. The combination of Monsanto and Bayer generates an annual turnover of 23,1 billion euros. That makes the new entity the leader, ahead of the 14.8 billion euros produced by ChemChina and Syngenta.
Agricultural divisions of DuPont and Dow Chemical, also in the integration process, recorded revenues of 14,6 billion last year.
In fourth place in the industry, far behind, would the German BASF, with an annual turnover of 5,8 billion.
Almost 85% of the market will be well in the hands of these conglomerates. And this week, Canadian Potash and Agrium announced the merger of their fertilizer business.
Small producers are those who are in a more vulnerable position because they have less room to negotiate prices.
Although Congress has no authority to block these operations, the political factor can complicate the examination by regulators.
John Deere, for example, is trying to save the purchase of Precision Planting, another major acquisition announced in the agricultural industry.
Farmers’ groups have, however, conflicting views. The National Corn Growers Association admits that the consolidation will create a loss of competition, but also notes that the merger of Dow Chemical and DuPont will serve to counter the leadership of Monsanto in the seed business.
“Having two companies fighting for the market is beneficial,” say reviewers, omitting the fact that it is just a matter of time before these companies negotiate a new merger or acquisition to become two large conglomerates or perhaps even one.
The mergers are also a cause for concern for grain farmers as the price of their product drops dramatically. In the US, profits for the sector this year is estimated at $71.5 billion, half that of 2012.
Meanwhile, industry executives respond to the criticism by saying that this purchases like the one recently made by Bayer will allow the companies to develop more efficient products and that, they say, that will help in moments of difficulty.
They also consider that combining innovation efforts will help to meet the demand for food. Crops, they say, should grow 5% annually to cover the increase in population.
But projections indicate a 17% reduction in the land available per capita until 2050. “These mergers are needed to close the gap between supply and demand” reiterated Bayer CEO Werner Baumann.
Another fear is that with the consolidation there will be a reduction in diversity, an issue that is already taking place with many crops.
Environmental activists warn that these companies may, with their dominant position, virtually decide what is cultivated and what chemicals are used in products entering the food chain. So they consider that regulators should pay attention to this aspect.
Monsanto also has a problem of reputation for its genetically modified seeds, to the point of being known as the “Frankenstein” of agriculture.
The use of these products is widespread in the US but its introduction in Europe is surrounded by controversy and protests. “We do not force farmers to buy Monsanto,” says Baumann, “but if they do it is because they benefit from the product’s efficiency.”