September 15, 2016 by Pat Thomas
Forget reality shows. For anyone interested in the future of food – and really the future of the entire planet – the corporate theatre of the mega-merger is proving to be compelling stuff.
This week Monsanto confirmed a record-breaking $66bn takeover of its GM seeds business by rival Bayer. The deal – if it is allowed to go ahead – would create the world’s biggest seed and pesticide company.
Shareholders and lobbyists are rubbing their hands at the potential for profit and power, and campaigners are directing the expected ire at the deal, vowing to mobilise their resources to fight it – though it is unclear just what that fight will look like and how much influence, if any, it will have. More likely it will be the sheer size of the merger – creating a company that will control 30% of the global seed market – that will slow regulatory approval of the merger and may eventually topple the deal.
Of course we should be concerned, but not just by this proposed merger. To understand why we need to look at the wider landscape of corporate agriculture. At the moment six companies (sometimes called the ‘Big 6’) control the global marketplace for pesticides and crop biotechnology. These companies are BASF, Bayer, DuPont, Dow Chemical Company, Monsanto, and Syngenta.
The Bayer-Monsanto merger is just one of three proposed mergers with the potential to change the face of agriculture.
Dow Chemical and DuPont last December announced a $130bn merger, while earlier this year Syngenta agreed to a $43 billion sale to China National Chemical Corp (Monsanto has also tried and failed several times to merge with Syngenta).
Should any or all of the deals currently on the table be approved by international regulators it would essentially turn the Big 6 to the Big 3.
Approval is not guaranteed in any of these cases and as these international corporations jockey for position, there may be more lobbying, persuasion and downright bullying going on behind the scenes than many of us can easily comprehend.
Mega-mergers don’t just happen because two companies want them to. Announcement of a merger is only the first of many steps.
In particular, to create a super company the deal will likely have to pass through several hoops including:
Certainly all is not going smoothly for the proposed Dow-DuPont merger.
Shareholders in both companies were quick to approve the deal, but earlier this month the EU antitrust regulator at the European Commission announced that it had suspended its deadline for a review into the proposed merger because the companies hadn’t submitted the relevant information required.
Shortly before that the European Commission opened an in-depth probe into the merger over concerns that, if allowed, it would reduce competition in crop protection, seeds and certain petrochemicals.
Depending on the outcome of the probe, and once the companies submit the requested information, the Commission will then restart the clock on its merger review, which could wrap up by the end of the year.
In the US the process for the Dow-DuPont merger is also under scrutiny.
The American Antitrust Institute, Food & Water Watch and the National Farmers Union have recently written a letter to antitrust regulators arguing that, with just 6 big firms controlling the global agricultural biotech market, the industry is already ‘consolidated’ and further consolidation would greatly diminish the ability of smaller biotech companies to compete. They suggested that it would also lead to rising prices and fewer choices for farmers and consumers alike.
The letter particularly noted that, should the merger go ahead, it would create a duopoly with just two companies, Dow-DuPont and Monsanto, controlling 76% of the maize and 66% of the soya markets.
Regulators don’t simply judge each case on its merits – or lack thereof. They have to take into consideration what the corporate landscape looks like as well. Each new approved merger creates an obstacle for the next one; and should Dow-DuPont be given the go-ahead first, regulators may have no option but to veto the Bayer-Monsanto merger.
In this respect, campaigners at the American Antitrust Institute, Food & Water Watch and the National Farmers Union have got it right. The biggest pressure point is with the regulators. Strong regulation is – or should be – there to protect all of us. Regulators must be made to see that these proposed mergers are bad for business, bad for farming and ultimately bad for the consumer. They should be pressed into doing their jobs regardless of the powerful lobbying influence of large ag-biotech-chemical firms.
It’s a risky strategy, however, because getting – and keeping – the public interested in the machinations of big business is hard work (as the campaigns against TTIP TTP and CETA have shown).
This is why so many campaign groups have taken up ‘Monsanto-bashing’ as a way of stirring up public anger and hoping that this will be enough to get more ‘people’ involved.
Without public support many campaigns find they cannot get funding and without funding little effective work gets done and campaigners, instead, find themselves sucked into a world of angry tweets and Facebook posts that basically go nowhere and do nothing except confirm the fury of the same handful of people over and over again.
‘Monsanto bashing’ is easy. Monsanto, through its own actions, has turned itself into the posterchild of the evil corporation. As revealed by journalists and whistle blowers over the years, the company’s single-minded, near psychopathic pursuit of profit and growth have demonstrated that no tactic is too outrageous, no amount of money too large to spend, indeed nothing is off the table, when it comes to strengthening its own position and ensuring that its agenda prevails.
That agenda in a nutshell is to promote an industrial agriculture model that we know is faulty and failing. It is a model that is responsible for around a third of all man-made greenhouse gas emissions. It is largely responsible for the depletion of global soil and water resources, and biodiversity loss and, particularly in developing nations, the displacement of millions of small and family farmers. There is a strong case to argue that it is also responsible for significant nutritional deficits in the global population. Its focus on seed patents benefits only a few while most certainly threatening food sovereignty on a global scale.
Large corporations like Monsanto are very good at generating profits and wealth for a select group of shareholders, but they also cause enormous and often hidden and unreported harm. Documents over the years have revealed that Monsanto has knowingly and unapologetically produced and sold products that were toxic to humans, wildlife and the environment.
PCBs and dioxins are older examples of this. But products like glyphosate and patented GMO seeds – which eventually produce GMO food crops – are more recent concerns. Often it has taken legal challenge, based on evidence of extreme harm, before the company would withdraw these products.
Most people know this but, how much do they know about the other members of the Big 6?
Bayer is the company that brought us aspirin – and heroin. Having trademarked heroin, it then spent decades marketing it as a cough medicine for children with the reassuring message that it was “without side-effects”.
During the Second World War Bayer produced chemical weapons such as chlorine gas. As part of a large conglomeration IG Farben, it was one of the largest contributors to the Nazi party. It collaborated with the Nazis in scientific experiments and used tens of thousands of death camp inmates as slave labour for its factories.
BASF is another German company and like Bayer was part of IG Farben. It is responsible for introducing coal tar dyes onto the marketplace as well as synthetic fertilisers, ammonia and in 2005, when campaigning focus was increasing on Monsanto, it was the 3rd biggest seller of pesticides in the world. Today it has a diverse portfolio of chemicals, plastics, performance products, oil and gas as well as agro- chemicals and GM crops.
Dow is the largest chemical company in the US and has, over the years, brought us napalm, Styrofoam and dioxins. It was responsible – via its subsidiary Union Carbide – for the Bhopal tragedy in India in 1984, when thousands suffocated from 27 tons of methyl isocyanate that leaked out of Union Carbide’s pesticides plant. It has never accepted responsibility for the disaster.
DuPont began life making gunpowder and explosives in the US. It’s given us cellophane, nylon, Lycra and Lucite. It also invented Teflon (the toxic perfluorinated chemicals from which now pollute every corner of the globe), CFCs (responsible for the near destruction of the ozone layer), and the plastic bottles that pollute our oceans. DuPont also put the brain-destroying lead in our petrol as well as designing, building and operating the world’s first plutonium production plant.
Syngenta is a relatively new kid on the block, formed in 2000 by the merger of Novartis Agribusiness and Zeneca Agrochemicals. It is the producer of the highly toxic insecticide paraquat – and the disgraceful (and now banned) ‘terminator’ technology, which produces crops that generate sterile seed, forcing farmers to purchase new seeds from biotech seed companies each year.
However, the most urgent threat posed by Syngenta are the ways in which it uses modern marketing techniques to thrust the biotech agenda on the world. The best example of this is the way the company has ‘collaborated’ in a project to give away a vitamin A enhanced rice (‘Golden Rice’) to farmers in the Global South.
Michael Pragnell chief executive of Syngenta is quoted by Corporate Watch as having described the tactic as a “latch-lifter”:
“… the regulators either have to become less fastidious or deny benefits to patients. We are pursuing these markets not because we will make a fortune, but because it will introduce some regulatory tension.”
Golden rice is now widely acknowledged to be a failure as a crop and in any case never really addressed the underlying causes of vitamin A deficiency such as poverty and lack of access to a diverse diet. However it is clear that the development of the next generation of GM crops, which can be marketed as having consumer benefits, is a tough and increasingly urgent challenge for campaigners.
Each of these companies could be viewed as ‘evil’ in some way, and deserving of a good ‘bashing’, but it is their collective effect on the agricultural market that has been the most devastating.
Perhaps more important than their perceived evil, however, is the power which they have been allowed to acquire and how it is used in service of corporate goals – such as not paying their fair share of taxes and exerting extreme influence on political and regulatory processes – rather than public benefits.
Although not directly related to the biotech mergers, a timely analysis by the anti-poverty charity Global Justice Now has revealedthat 69 out of the world’s top 100 economic entities are corporations.
The report notes that the 10 biggest corporations – including Walmart, Apple and Shell – make more money than most countries in the world combined.
Looking at the top 200 entities it found that many smaller countries were being squeezed out, leaving 153 corporations ranking above many nations from Africa, Asia and South America.
This kind of power – which our governments are complicit in – must be challenged. Until we change the ‘corporation-is-king’ mind-set of our culture, until we stop treating corporations like people, nothing will change.
That change will come, in part, when we start electing officials who want to solve the problem instead of those who simply want to benefit from and be a part of it.
Media response to the proposed mergers has been interesting. An online piece from the normally ultraconservative Bloomberg news channel spends more time evaluating the dodgy pasts of Bayer, and Monsanto – and the damage done to public trust – than it does the financial potential of the deal.
More interestingly, a sober and thoughtful article in the Wall St Journal suggests that news of the merger might give us pause to reconsider the path we are on, agriculturally speaking.
The piece argues that the GMO crop boom could be over, that in the face of superweeds, higher seed prices and dropping yields farmers are turning away from GM crops.
But there are also other paths, which we have followed for far too long, which need reconsidering.
Large corporations like the Big 6 are driven by the need to grow, to constantly increase shareholder value. If they can’t find new products and new markets they have to merge – either forced or voluntarily – or they create de facto monopolies by providing services to governments.
More than half a century ago US President Eisenhower’s warnings about the military/industrial complex highlighted the early examples of this.
The so called ‘new alliance’ of global corporations, governments and corporate charities focused on imposing high-tech, patent-driven, agrochemical- and biotech-managed agriculture on Africa is the latest example.
And so are these proposed mergers.
Giant corporations lack transparency, hide from regulatory oversight, corrupt trading relationships, government and democracy. It is not just that they are “too big to fail”; they are too big for an equitable, civilised society – and, when they operate in an area as essential to life as food production, they are life threatening.
The Big Ag mergers on the table right now are worlds away from “sweet commerce” – the civilising influence of capitalism that has been propagandised by economists, banks and businesses since the 17th Century.
You have to wonder, how much longer we are going to hang on to this tattered myth before we begin to make other, better, plans.