WASHINGTON, Oct. 19, 2016 - Within the next year or so, the “Big Six” crop protection and seed companies – Syngenta, Monsanto, Bayer, BASF, DuPont and Dow AgroSciences– could become the “Big Four”.

DuPont and Dow are in the process of merging. China National Chemical, known as ChemChina, plans to take over Syngenta, and last month, Bayer announced plans to acquire Monsanto. All are pending regulatory approvals.

Consolidation of that magnitude has farmers worried about having fewer options from which to buy seeds and crop protection chemicals. But some of the folks at the forefront of the Bayer-Monsanto deal suggest that there are currently more industry players than you might think – and many more on the way.

“Globally, there are thousands of seed companies, hundreds of regional players and many, many local players, also on the chemical side,” Liam Condon, the head of Bayer’s Crop Science Division, told Agri-Pulse in an exclusive interview last week on the sidelines of the World Food Prize events. “And with what’s happening now on the technology side – particularly gene-editing, but also on the data sciences – there’s a lot of new entrants coming in. Even a company like Google is starting to enter into agriculture and a lot of venture capitalists running start-ups are coming into the market…”

“So there’s no lack of competition, per se.”

Condon says that an “integrated offering like ours,” with Monsanto primarily offering seeds and traits, while Bayer is primarily offering crop protection, “makes sense, and where it doesn’t, you can buy bits and pieces.”

“For us the key thing is, we’re offering compelling choices to our growers. And at the end, there’ll always be a variety of choices that growers can make. And unless we’re offering something that is better than the competition, nobody’s going to take it.” 

Condon believes the combined companies will result in more innovation for growers and faster release of new products.

“That has to be the key outcome of what we’re trying to achieve – and that’s what we’ll be measured by.

In a separate interview, Monsanto Chief Technology Officer Robb Fraley offered a similar argument for integration, noting that Monsanto currently spends about $1.5 billion annually on research and development, which pales in comparison to companies like Google and Amazon. Fraley said that Monsanto has been focusing on grower’s opportunities via data science. The company made a big investment in weather data in 2013, paying $930 million for Climate Corporation.

“Consolidation is both needed and healthy in order to be able to provide the kind of investments that you need in cutting-edge biology and data science tools,” said Fraley.

For now, many U.S. farm organizations have been very measured in their comments, expressing some concerns but also an understanding of the consolidation that’s happening on both farms and agribusinesses struggling with lower commodity prices.

“True competition is not based solely on the number of players within a given market,” the National Corn Growers Association and the American Soybean Association stated in written testimony to the Senate Judiciary Committee last month. “Strong competition can result from having several evenly-matched companies fighting for market share within the seed, chemistry and trait development markets.”

In the meantime, both Fraley and Condon have been actively reaching out to grower associations to address concerns.

“That’s a process that we will continue to make sure they’re updated on what’s happening and that nobody’s surprised by anything,” Condon said.

Condon also wants grower groups to know that both Bayer and Monsanto have always had a very open licensing policy for innovation technology, and “people shouldn’t be concerned that we’re going to change that policy going forward.

“So any new innovation we’re generating – the intent is not just to keep it for ourselves – it’s to out-license and let others access it. That’s not a new commitment – that’s something we’ve always done.”


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