The Monsanto Merger Blues

Ahna Kruzic and Eric Holt-Giménez | 09.19.2016

This past week, hundreds of farmers from the National Farmers Union converged on Washington DC to plead with decision makers to say “no” to a blockbusting roster of agribusiness mergers.

Farmers—and consumers—have reason to worry. This level of corporate consolidation will give these companies unprecedented power over our farms and food.

There is a record-breaking number of pending agribusiness mergers this year.

Chemical giant Bayer has just announced its purchase of Monsanto, the world’s leading seed and pesticide supplier. Not to be left behind, DuPont and Dow, and Syngenta and ChemChina—the rest of the “Big Six” that already control 51% of seed and 72% of the pesticides in the international market—are in frantic merger negotiations. Why? Saturated markets have dropped profit margins. Corporate consolidation is the only way to increase returns to shareholders.

None of this has anything to do with feeding people.

We already produce 1 ½ times more than enough food to feed every person on the planet. Unfortunately, over a billion of the world’s people are too poor to buy this food – so they go hungry. Corporate mergers aren’t going to change that.

As suppliers consolidate, farmers lose power and choice and get stuck with high input prices and no alternatives at a time of painfully low grain prices. The only way to make their bottom line is to expand operations, getting ever bigger to cover their fixed costs. It’s the way of capitalist agriculture. Too bad for young farmers seeking to break in to agriculture—the land bar has just been raised. Corporate monopolies controlling seed genetics, corresponding chemicals, and other inputs run rampant, while farmers buy up their neighbors in an effort to pay for the increasing cost of inputs. Monopolization increases the tendency of land consolidation into fewer and fewer hands – which means fewer and fewer farmers. As mergers further consolidate the industry, the problem worsens.

Stay in the loop with Food First!

Get our independent analysis, research, and other publications you care about to your inbox for free!

Sign up today!

Seeds, inputs, machinery, financing, insurance, and big data provided by the corporate giants are made to deliver larger and larger batches of uniform products to retailers, that are also consolidating and vertically integrating. (Even Amazon, who is recruiting an army of agronomists, is planning to sell food through huge supply centers, where taxis and drones will ultimately deliver food to consumers.)

These mergers decrease competition and inevitably lead to less choice and less innovation. Farmers are paying more for inputs, and those costs don’t come down when commodity prices drop. It also hurts consumers who pay more and have fewer choices at the store.

-Jana Linderman, Iowa Farmers Union president and beginning family farmer

Big food & ag corporations need big farms. Where will farmers get the money to upgrade? Land.

Banks now hold workshops where they advise producers about the sale and financialization of the land as a business measure to recapitalize operations. They urge farmers to refinance by selling the US heartland to international investors whose time horizon is governed by the click of a mouse. Land will concentrate in the hands of those looking to reap profits from hundreds of thousands of land transactions carried out far from farms, far from consumers seeking healthy, sustainably produced food, and far from the empty bellies of the world’s poor.

Institutional investors have already bought about $40 billion of agricultural land – they’d buy more if they could, but many farmers aren’t yet willing to sell. In five years, however, 63% of agricultural land will be inherited or sold. The question is, who will take over? Financial investors or family farmers?

Right now, the front line of resistance to the continued corporatization and consolidation of agriculture in the United States is the commodity producer of corn and soybeans – the family farmers that were in Washington DC with the National Farmers Union voicing opposition to consolidation of the industry that determines their livelihoods.

But it’s not just their livelihoods that are impacted by these potential mergers – it’s our food and agricultural system as a whole. Food activists seeking to transform our food and agricultural system need to stand with those on the frontlines against the continued corporatization and financialization of agriculture. Contrary to the “good food” narrative, that means allying with conventional family farmers, especially those stuck on the pesticide-GMO-subsidy treadmill the movement so vehemently excoriates – we’ve got a lot to learn from them:

Family farmers have been pushing back against the corporate takeover of agriculture for more than a century. If farmers find a way to make money, the industry will find a way to take its cut. You saw it happen to commodity farmers when prices were high several years ago, and you see it now with large processors and big box retailers wanting to profit from the organic and sustainable food movement that farmers built. If farmers voluntarily pit themselves against each other because we are growing different things or using different production methods, the only winner will be the corporate food system. It’s not easy to bring a diverse group of farmers – conventional commodities, livestock, dairy, fruits & vegetables, organic – together under one big tent. But we do it because we are fighting for the survival of the family farm, and we can’t afford to choose up sides against each other.

-Jana Linderman, Iowa Farmers Union president and beginning family farmer

As far as corporate consolidation goes, it is time for the food movement to tactically align itself with the family farm movement, and with organizations like the National Farmers Union. It is in everyone’s interest to keep the monopolies from consolidating, and ultimately to keep farmland ownership in the hands of farmers—not financial investors. This may be a bitter pill for some, but it is a far sight better than turning over our food system to corporate shareholders and financial investors.

As the average age of owner-operators increasingly approaches retirement, who will inherit our agricultural landscapes – farmers or investors? For the sake of up and coming farmers, ethical consumers and the world’s poor, let’s hope it’s the farmers. Now is the time for the food movement to ally with those whose livelihoods depend upon stopping the continued financialization and corporatization of agriculture. Our food future depends on it.

Featured photo by Theophilos Papadopoulos/ CC BY