Monsanto Competition

1222 Words 5 Pages
One of the most evident modifications in U.S. agriculture has remained amongst agricultural input markets. The exceptional development in yields and agricultural efficiency has been possible due to biological innovations in crop seeds, advancement of hybrid crops in the early part of the 20th century, with implementation of high-yielding varieties and current biotechnology. Innovation of new forms of pesticides and seeds has strikingly enriched agricultural yield (Bloomberg). Agricultural input markets have developed with family–owned and other small businesses. They have relinquished their way to superior enterprises that assimilated in plant breeding, acclimatizing, assembly, marketing, and other functions. The progression in the industry …show more content…
The merger could very much have a negative impact on both farmers and consumers. In a fast establishing sector now governed by just a small portion of, Bayer AG’s $66 billion deal with U.S.-based Monsanto Co. has considerable implications for farmers and the industry. Both are main producers of agrochemicals, seeds and genetically modified crops. There are some apprehensions when pertaining to genetic engineering cuts down on natural biodiversity as it exposes the food supply to risk from disease and unpredictable weather. Economic theorist, Adam Smith once mentioned “the limitation of competition can exist only to benefit the dealers, by increasing profits beyond what they naturally would be, to levy, for their own benefit, and absurd tax upon the rest of their fellow-citizens.” (Adam Smith, Wealth of Nations (Amherst, New York: Prometheus Books, 1991), pages 219-220). This limitation can absolutely hinder farmers’ choices and bargaining power, with rising seed prices anticipated to be approved on to the grocery aisles. The merging and driving out of smaller competitors, controlling of the marketplace and raising prices of seeds and pesticides for farmers on a global perspective is going to be a real blow to the food system. A Farmer has expressed his uneasiness following the proposed merger. Ray Gaesser, a corn and soybean producer in Corning, Iowa, has …show more content…
As stated, "many of the products that Monsanto produces and sells are outlawed in Europe."(Deutsche) It should be addressed that GMO or genetically modified organism is problematic in Europe and Monsanto is the world 's largest producer of genetically modified corn. Although GMOs are generally grown in many parts of the world, the topic is tense with dispute in Europe. Several EU countries have stern laws in contradiction of GMOs due to public health and environmental apprehensions, and nations require GMO labeling. (Bunge) Due to this reason, GMO products will produce complications for Bayer as they go to the European Commission to seek approval for the merger. Bayer has arranged to pay Monsanto $2 billion if regulators block the deal. Executives assumed the companies have made significant commitments to upturn the likelihood of the deal closing, including a willingness to divest certain operations if required by regulators. If European regulators are ready to approve a merger, that does not mean their U.S. counterparts are keen on approving the measure. Merging two of the world’s main farm suppliers will challenge the patience of farmers and politicians now cautious of multibillion-dollar agreements to combine other top companies in the $100 billion global market for seeds and

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