At the time of Expo Milano 2015-when we published the ebook ‘GMOs, the Big Scam‘-the global seed and pesticide market was in the hands of 6 corporations. Nothing worse, they said. Instead, reality overcame the worst nightmares.
Seeds, 20 years of concentrations on a global scale
In 1998, a couple of years after the introduction of GMOs on an agroindustrial scale, large groups began to shop rival companies. With the goal of grabbing as manyIntellectual Property Rights (IP) to seeds as possible. Following a path similar to that already pursued by the IT giants, which in turn over the previous decades have hoarded IP on programming codes. (1)
In 2008, Monsanto’s patented genetics alone accounted for 92 percent of soybeans , 80 percent of corn and 86 percent of cotton and 92 grown in the US. At that time, acquisitions and mergers in the previous decade had enabled six giants to dominate the international seed and pesticide market. As if that were not enough, the Big 6 (Monsanto, Dupont, Syngenta, Dow Chemical Company, Bayer, BASF) were beginning to forge new alliances, further detracting from the competition.
As of 2018, the Big 6 are consolidated into Big 4. Bayer (which acquired Monsanto) and Corteva, (formed from the Dow-DuPont merger), ChemChina (which acquired Syngenta) and BASF. These four corporations control more than 60 percent of the world’s proprietary seed sales. (2) Transaction values express the size of the business at stake:
- the Dow-DuPont merger, worth US$130 billion, led the two chemical groups to form a third company, Corteva,
- Bayer’s US$ 63 bn acquisition of Monsanto made the former’s brand name disappear but not the glyphosate-related legal troubles,
- the purchase of Syngenta, for US$ 43 bn, has enabled ChemChina to climb the Top 10 position in global seed sales (where the Chinese Longping High-Tech group already figures).
The past decade has seen another 56 international acquisitions and joint ventures involving other giants such as Limagrain’s Vilmorin-Mikado (France), DLF (Denmark), and Longping High-Tech, which acquired Dow’s corn division in Brazil and controlling stakes in seven Chinese seed industries. ChemChina in turn has planned new acquisitions in the domestic market.
Power concentrations over food production, the global scenario
Philip Howard, a researcher at Michigan State University (U.S.), has followed concentrations of power in the seed industry, planet-wide, for a quarter century. (3)
However, the approximately 400 ownership changes on the companies mentioned in the table below, which he has recorded over the past 23 years, have not shaken the indifference of the authorities who are supposed to oversee antitrust legislation.
Farmers are the first victims of concentrations, Howard explains. Realizing how this phenomenon leads to reduced choices and increased prices. (3) And not only that:
- innovation is limited by the protection of IP rights, which large groups also exercise through aggressive methods. Involving restrictions on seed use and exchange, including for ‘seed saving‘ and research purposes,
- private research has decreased or slowed down. As noted by the U.S. Department of Agriculture itself, the giants that have emerged from consolidation are promoting less research. Fewer players, less innovation.
The competitiveness of an industry, according to classical economic theories, is lost when the top four players control 40 percent or more of the market. However, the seed industry continues to exceed this threshold both overall and on individual production lines. Suffice it to say that even before the advent of the Big 4 three groups alone-Monsanto, Syngenta and Vilmorin-controlled 60 percent of the global vegetable seed market.
The aggregate concentration of seed industry conglomerates on closer inspection invests the entire agribusiness economy at the planetary level. It collides with public interests, collective interests and those of individual operators, and interferes with economic and sector policies. Where plutocrats, in all evidence, have an easy time manipulating political decisions and influencing administrative decisions to their exclusive advantage. (4)
Concentrations, food security , and the SDGs
The dominance of the Big 4 affects both conventional and organic farming. The inaccessibility of a wide range of plant genetics to public researchers, independent farmers and breeders severely limits the possibility of improving agricultural and food systems. How indispensable it is, however, to achieve the Sustainable Development Goals (SDGs) adopted by the United Nations.
Plant resilience must be promoted, through public and private synergy. To realize the public interest of allowing crops to thrive without resorting to synthetic pesticides and fertilizers or genetic engineering. Crops must be allowed to naturally resist disease, adapt to climate change and environmental conditions. Addressing the crucial issue of food security-that is, the security of the food supply-and improving the nutritional qualities of our food.
The authorities charged with overseeing competition and the free market in every area of the planet-in the U.S. and Europe, as well as in Italy, notably-appear to have abdicated their responsibilities to investigate and prosecute violations of so-called antitrust (or anti-monopoly) legislation in the agribusiness sector. As evidence of this, we note with regret the AGCM’s (Italian Competition Authority) lack of interest in our reports of some of the abuses put in place by Amazon. (5)
It is the responsibility of the public sector in modern democracies to take actions to ensure the practical existence of a market and economy conducive to individual economic initiative and free competition. Thwarting restrictive business arrangements and abuses of dominant position. All the more so in vital sectors such as agribusiness, where abuses can put the sustainability and security of the supply to food at real risk.
Food security and SDGs, what to do
The basic human right to food must come to the top of the political agenda, in Europe as in all UN member countries. ‘Zero Hunger‘ is the second of the 17 SDGs and cannot be addressed without solving the trouble of the aggregate concentration of seed corporations.
We need to awaken the cataleptic antitrust authorities, support investment in plant breeding programs that meet the needs of regional agricultural systems and can be shared in the public interest. Support the scientific and agricultural communities that already guard the democratic seeds of progress. Recovering control of reserves that can be actively conserved. Improving and generating more diversity in our fields. (6) It brings to mind the teaching of one of the prophets of free software-the creator of the GNU/Linux project-whom the writer had the good fortune to hear live, in Bologna, at the dawn of the new millennium.
‘Sharing is when you’re giving someone else something you have got. One of the main political issues today is to eliminate plutocracy and restore democracy’ (Richard Stallman, founder of the ‘Free Software Foundation‘)
Dario Dongo
Notes
(1) The de facto monopoly on programming codes has allowed the IT giants to prevent and otherwise significantly hinder the development of new software outside their control
(2) Cf. P. Mooney, ‘Blocking the chain’ report (2018), ETC Group, http://www.etcgroup.org/sites/www.etcgroup.org/files/files/blockingthechain_english_web.pdf
(3) V. P. Howard, ‘Global seed industry changes since 2013’ (2018), https://philhoward.net/2018/12/31/global-seed-industry-changes-since-2013/. Proposed solutions to address the problem at http://www.ipes-food.org/reports/
(4) On aggregate mergers, see Michal S. Gal and Thomas Cheng, ‘Aggregate Concentration: An Empirical Study of Competition Law Solutions,’ Journal of Antitrust Enforcement (2016)
(5) Refers to Great Italian Food Trade reports cited in previous articles https://www.greatitalianfoodtrade.it/consum-attori/amazon-troppi-illeciti-nella-vendita-di-alimenti-gift-si-appella-all-antitrust, https://www.greatitalianfoodtrade.it/consum-attori/amazon-pantry-cosa-non-va. Reports that resulted in two proceedings, both of which were dismissed without even proceeding to an investigation as they were deemed ‘not in line with the priorities for action’ of the Rome-based Antitrust
(6) See Farmer to Farmer Campaign, report ‘Out of Hand: Farmers Face the Consequences of a Consolidated Seed Industry’ (2009), http://www.farmertofarmercampaign.com/
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
