The American Antitrust Institute (AAI), Food & Water Watch (FWW) and National Farmers Union (NFU) have sent a letter to the Principal Deputy Assistant Attorney General, Renata Hesse, the the U.S. Department of Justice (DOJ) Antitrust Division to challenge the proposed merger of Dow Chemical Co. and DuPont Co.
The letter contends that the merger would create the largest biotech and seed company in the U.S., consolidating an already closed industry. Results could be the rise of prices, reduced cultivation of choices for farmers, consumers and the food system and even a decline in innovation for the industry.
The letter specifically addresses three areas of concern; eliminated head-to-head competition in the corn and soybean market, reducing vital innovation competition, and creating a large, integrate “platform” of traits, seeds, and chemicals that would squeeze out rivals.
The groups point out that aggressive consolidation in agriculture, specifically in the agricultural inputs sector, has changed the landscape for independent crop input companies as well as for independent producers. The current rumored or announced deals—including Dow-DuPont, ChemChina-Syngenta, and Bayer-Monsanto—would be a third wave of consolidation. Two previous merger waves eliminated the majority of small to medium-sized biotechnology R&D firms to create the Big Six—Monsanto, Syngenta, Bayer, DuPont, Dow and BASF.
“Any consolidation among the Big Six firms should raise significant antitrust concerns. We encourage the DOJ to move to stop it, as it has in other recent and unfixable mergers that would leave only a few large players,” explained AAI’s President, economist Diana Moss.
“The Department of Justice must block this biotechnology mega-merger that would raise farmers’ prices and severely limit the choices for farmers, consumers and rural communities,” said Food & Water Watch executive director Wenonah Hauter. “Today’s wave of agribusiness and food company mega-mergers is surrendering our food system to a corporate cabal that thwarts our efforts to build an fair and healthy food system.”
“Seed costs are the highest input expense for farmers. While some of the cost can be attributed to more sophisticated technology, we have seen time and again that consolidation and market restructuring has increased the cost of crop inputs. In a lagging farm economy with multi-year trends of low commodity prices, additional cost increases for crop inputs could cripple a lot of family farms in this country,” said NFU President Roger Johnson.
The letter states that the merger “would be difficult, if not impossible, to remedy,” and provides accumulating evidence on failed remedies in other mergers, the difficulty of finding viable buyers of to-be divested assets, and the ineffectiveness of divesting assets to other members of the Big Six firms.
Read the full letter here.