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Government Approval of Bayer-Monsanto Merger a Losing Proposition for Farmers, the Public and the Environment

By Bill Freese, Science Policy Analyst

June 12, 2018
Center for Food Safety

On May 29, 2018, the Department of Justice (DoJ) gave its blessing to the mother of all agribusiness mergers, the union of pesticide-seed conglomerates Bayer AG and the Monsanto Company. Germany-based Bayer is to acquire Monsanto for $66 billion, pending a 60-day public comment period and a court finding that the merger is "in the public interest."

The merger is the latest chapter in a decades-long consolidation of the once separate seed and pesticide industries. Recent years have seen ChemChina acquire Swiss multinational Syngenta; and the fusion of American giants Dow and DuPont to form DowDuPont. Yet the behemoth forged by the merger of Bayer and Monsanto is the most troubling yet.

The DoJ refused to reject the merger despite finding it would "significantly increase concentration" in already "highly concentrated" markets for genetically engineered (GE) seeds and pesticides, as well as vegetable seeds. This in turn would bring "higher prices, less innovation, fewer choices, and lower-quality products for farmers and consumers throughout the United States and around the world."

Why then was the merger nevertheless approved? DoJ imagines that it can make things right by requiring Bayer to divest some of its GE seed and pesticide assets to German chemical giant BASF. In its proposed settlement, anti-trust officials will thereby transform BASF (which currently has few seed holdings) into a new pesticide-seed conglomerate, while doing little to reign in the "Baysanto" beast.

Despite the divestitures, the merged company will still be the world's largest seed firm, and command a considerable portfolio of weed-killing pesticides (herbicides) as well as fungicidal seed treatments and insecticides. Not only will seed prices continue rising, and traditional seed options narrow; the merged giant will have every incentive to further tighten the poisonous nexus between seeds and pesticides that characterizes the GMO era, in two critical sectors.

Seeds + Herbicides: Resistance is Futile

As many already know, Monsanto initiated the GMO revolution by genetically engineering a slew of crops (corn, soybeans, cotton, canola, sugar beets and alfalfa) to survive direct application of glyphosate, the active ingredient of its flagship Roundup herbicide. The huge increase in glyphosate use triggered by these Roundup Ready crops has generated an epidemic of glyphosate-resistant weeds that Roundup no longer kills. Monsanto recently introduced 2nd generation crops – GMOs immune to dicamba – and marketed them and its new dicamba herbicide as a means to kill weeds resistant to glyphosate. As weeds evolve resistance to dicamba as well – and it is already beginning – the merged giant will be perfectly positioned to further exploit this toxic transgenic treadmill of increasing chemical use and weed immunity by engineering crops resistant to ever more herbicides. Resistance may be futile, but it is highly profitable.

It gets worse. Even farmers with no interest in these GMOs will feel compelled to buy them, just to avoid having their crops damaged by rampant herbicide drift. We know this because it has already happened. Just last season, dicamba sprayed on Monsanto's GMOs drifted uncontrollably to cause unprecedented injury to millions of acres of soybeans as well as many other crops. And many of these injured soybean farmers are now reluctantly buying their seeds from the firm whose products did the damage, purely for self-defense.  Growers of other crops do not even have this option.

Ironically, some farmers have sued Monsanto under antitrust laws for being forced to purchase the company's expensive seeds to avoid drift damage.  Perhaps this is why DoJ's analysis does not even mention Monsanto's dicamba-resistant crop system (among the company's biggest product releases ever), much less factor into its analysis the loss of seed choice and income it has entailed for so many farmers.

And it's not just farmers who will suffer. Herbicides are bad news for all of us. For instance, the World Health Organization's cancer experts recently determined that glyphosate is "probably carcinogenic to humans," and glyphosate residues in food have risen sharply since the GMO era began.  On the environmental side, beekeepers have reported steep declines in honey production where dicamba is heavily sprayed. This is likely because dicamba is so effective at killing the flowering plants that bees and other pollinators require for sustenance.

Seeds + Pesticidal Coatings: Whether You Want Them or Not

Bayer is a leading producer of pesticides that are coated onto seeds, often called seed treatments, that diffuse throughout the tissues of the growing seedling. The best known are insecticides called neonicotinoids, which are incredibly toxic to bees, and have been implicated as one factor in the decline of pollinators around the world.  While the Department of Justice is compelling Bayer to divest its neonicotinoid seed treatments (and certain others), the merged firm will still likely license their use from other companies. In addition, it will retain a considerable number of fungicides used to coat seeds.

Seed treatments really only took off in the GMO era. Yet EPA has found that in most situations they provide little or no benefit in terms of crop yield. Pesticide firms nevertheless market them aggressively, often as "insurance" for protection against seldom-present pests and diseases, and as a "price point" to justify further hiking the price of GMO seeds. Still worse, farmers are increasingly denied the choice of untreated seeds.  A merged Monsanto-Bayer would likely expand the use of seed treatments to Monsanto's huge seed portfolio, whether farmers want them or not, increasing pesticidal pollution for no good reason.

Government Ignores Interests of Traditional Farmers

The DoJ's merger analyses read in part like pesticide industry sales material.  Its attorneys have picked up buzzwords like "innovation," "integrated solutions," and "blockbuster products," and parroted falsely claimed benefits for GMOs and seed treatments. It is unfortunate that our nation's antitrust officials accepted industry hype so uncritically, apparently without vetting it against objective information.

The government's biggest sin, however, lies in ignoring the needs of many thousands of farmers who require affordable, traditionally bred seeds to practice sustainable farming. Bayer-Monsanto (and their few competitors) control the all-essential germplasm needed for both GMO and traditional seeds. But increasingly they offer only GMO versions, in profitable "systems" designed to sell their pesticides. This does not serve farmers nor the broader public interest, and thus the court should reject the proposed merger.    

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