Grassley sets consolidation hearing as Farm Bureau expresses concern
Senate Judiciary Committee Chairman Charles Grassley, R-Iowa, has said the committee will hold a hearing on consolidation in the agricultural chemical and seed sector, just as Bob Young, the chief economist of the American Farm Bureau Federation, expressed concern about the three corporate mergers currently being negotiated.
Grassley has told reporters he is planning to hold a hearing on September 20, Chuck Abbott of the Food and Environmental Reporting Network said in an article on Wednesday.
“If these mergers go through, you’d have a ‘big three’ instead of a ‘big six’ dominating the market,” Grassley told reporters.
Grassley was referring to the merger of Dow and DuPont, the China National Chemical Corporation’s plan to buy Syngenta, a Swiss company, and the offer by Bayer, a German company, to buy Monsanto.
The American Farm Bureau Federation, the largest U.S. farm group, has not issued a news release on the mergers, but the Financial Times reported Wednesday that Young said, “Any one of the proposed mergers/aquisitions would probably have been OK but to have them all hit at once … kind of makes one wonder.”
Young said he is concerned about farmers’ input costs, the Financial Times reported.
“The obvious concern is that increased concentration would bring you to the point where they would charge more than would otherwise be the case with more competition,” Young said.
Other persons quoted in the article said they don’t believe the companies will have much motivation to be innovative if they control so much of the market for seeds and chemicals.
National Farmers Union President Roger Johnson has formally come out in opposition to the mergers.
In a news release this week, Johnson praised the Justice Department for filing an antitrust lawsuit to prevent a proposed merger of John Deere and Precision Planting LLC.
“We ask that they reject any pending and future deals that would further cripple marketplace competition,” Johnson said.
–The Hagstrom Report