Ag-merger wave looks like a ‘tsunami,’ says Senate Judiciary chairman

The seed and ag-chemical industry “is seemingly on the precipice of a significant structural transformation,” says Senate Judiciary chairman Charles Grassley in remarks written for today’s hearing on consolidation in the sector. Five of the “big six” companies are involved in mergers while two Canadian companies are combining to form the world’s largest fertilizer company.

“To me, it looks like this consolidation wave has become a tsunami,” said Grassley, who said he is worried the mergers will mean less competition and higher seed and pesticide prices for farmers, “which will ultimately affect choice and costs for consumers. I’m concerned that further consolidation will diminish critical research and development initiatives which drive innovation and technological advances for the agricultural sector.”

Executives of Dow, DuPont, Syngenta, Monsanto and Bayer are scheduled to testify, along with officials of three U.S. farm groups. State-owned ChemChina, which is buying Swiss-based Syngenta, declined to testify. Dow and DuPont announced a merger last December; Bayer and Monsanto, the world’s largest seed company, reached agreement last week. In each of those two mergers, a company with a large ag-chemical arm is uniting with a leader in seeds.

Grassley said the ChemChina-Syngenta deal raised questions whether the Chinese government might give the combined company favorable treatment in approving GMO crops for cultivation.

The Justice Department, which is conducting an antitrust review of the Dow-DuPont merger, and the Federal Trade Commission, which is running a similar examination of ChemChina-Syngenta, say they will collaborate in weighing the combined effect of mergers on the seed and ag-chemical sectors.