The Bayer Monsanto merger needs your attention
Tom Dougherty, CEO – Stealing Share
23 May 2016
The trickle down effect of the Bayer Monsanto merger will be huge
The world of crop protection, if you’re not aware, is both important and cutthroat. And it’s something of which we should all pay attention.
There are a handful of main competitors who are either constantly battling the EPA or fighting environmentalists along side the regulatory agency, depending on your bent.
“Mergers are becoming the norm in crop protection, with Dow and DuPont joining forces last year and rumors of Chinese companies interested in Syngenta still circulating.”
It’s also a changing industry. The main players, such as Monsanto, Syngenta and Bayer, have long been under fire because their lead products were pesticides. Those chemicals raised the hackles of environmental groups and have spawned thousands (if not millions) of papers, editorials and books (started by Rachel Carson’s seminal book, Silent Spring.)
Today, however, those manufacturers are increasing their investment in seeds, which are genetically modified to increase crop growth and stave off infection from pests and disease.
That is why Bayer is offering $62 billion for Monsanto, the largest seed producer in the US, for a Bayer Monsanto merger I can see happening.
The pitfalls of the Bayer Monsanto merger to you
There are positive and negative outcomes of this proposed merger, starting with the benefit the companies themselves would receive. The battlefield now is over combined resources, especially worldwide, to increase research and development, and also to enter into developing markets.
The power of the seed market is that the next worldwide shortage is promising to be food. The population of the Earth is increasing but the amount of farmland is not. The only way to meet the world’s future needs is to make crops more robust and stir up agricultural production in those developing countries.
Leaving aside the potential negative effect of genetically modified seeds, the effect on the farmer – and the US economy – is potentially deadly. Mergers are becoming the norm in crop protection, with Dow and DuPont joining forces last year and rumors of Chinese companies interested in Syngenta still circulating.
Mergers mean less competition and less competition means higher prices.
Keeping track of the mergers in crop protection is not usually top of mind for consumers but they are important developments to notice. Seeds are seen as a healthier alternative to pesticides, but more research to needs to be done.
But sticker shock will soon be coming to your nearby grocery store. In the US, we take for granted what is available and what food costs. However, a Bayer Monsanto merger will change all that. Prepare to spend more of your dollar at the grocery store.
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