The Bayer-Monsanto merger creates a massive new company that will control 33% of the world’s seeds and 70% of its pesticides. The deal is expected to save the companies $1 billion annually, but critics say it would devastate farmers around the globe.
Since agribusiness behemoths Bayer and Monsanto announced their planned merger in September 2016, alarm bells have been ringing.
The merger is the latest in a string of multibillion-dollar agricultural deals that, if authorized, would give a few global businesses unparalleled influence over the chemicals and seeds that farmers depend on. While Bayer and Monsanto claim that the combination would reduce prices, increase innovation, and increase agricultural yields, many in the industry believe the reverse will happen. Consumers and the environment are also concerned about the megamerger’s impact.
Bayer and Monsanto have a lengthy track record of making money at the cost of people and the environment.
Bayer and Monsanto, on the other hand, have shown a propensity to seek profits with zeal, often at the price of people and the environment. They have the capacity to do considerably more damage when they work together, yet their combined influence may enable them to avoid penalties via regulatory capture.
A basic issue lies at the core of the Bayer-Monsanto merger debate: who profits from giant businesses wielding great power over our food supply?
ClassAction.com examines the potential consequences of a Bayer-Monsanto merger and reminds you that we assist individuals in standing up to corporate power. In fact, we’ve launched a case against Monsanto and other firms, alleging that pesticides are harming farmers’ crops.
“A Marriage Made in Hell” between Bayer and Monsanto
To have a better understanding of the potential marriage between Bayer and Monsanto, which Friends of the Earth Europe has dubbed “a marriage made in hell,” one needs go into the histories of both firms. Each of their histories has troubling occurrences that should cause anybody concerned about the environment and public health to think twice.
For starters, it’s worth considering how Bayer, a German pharmaceutical corporation best known for Aspirin and Alka-Seltzer, and Monsanto, a former chemical company located in St. Louis, got into agriculture.
Bayer’s Brief History
In the 1860s, Bayer was formed. The pain reliever aspirin and (believe it or not) heroin, which was advertised as a cough suppressant and non-addictive morphine alternative, were the company’s first important products. For decades, Bayer’s trademark was “heroin.”
Bayer was engaged in the creation of chemical weapons such as chlorine gas during World War I. Bayer was taken over by IG Farber, a German chemical conglomerate, when the war ended. At the Nuremberg Trials, dozens of IG Farben board members and executives were condemned to jail for suspected Nazi war crimes, including mass murder and slave labor.
Following World War II, the Allies disbanded IG Farben, and Bayer was reborn as a separate company. In 1956, a member of the IG Farben board of directors who had been condemned at Nuremberg was chosen as the chairman of Bayer’s supervisory board.
Chlorpromazine, a neuroleptic, Primodos, a problematic pregnancy test taken off the market in the mid-1970s for suspected birth abnormalities, and the clotting drug Factor VIII were among Bayer’s postwar goods. According to recent allegations, Bayer intentionally distributed HIV-infected Factor VIII to Asia and Latin America after the agent was withdrawn from US and European markets in the 1980s. Baycol, a statin medicine developed by Bayer in the 1990s, has been connected to more than 50 fatalities.
Bayer has also come under fire for its monopoly on the anti-anthrax drug Cipro, suing South Africa to protect profits from its patented AIDS medication, funding health and environmental groups that influence public policy affecting many of Bayer’s products (including pesticides), the heavy use of antibiotics in livestock that has resulted in antibiotic-resistant bacteria, and the production of toxic pesticides and insecticides, according to the website Corporate Watch. Bayer’s neonicotinoids (neonics), a kind of insecticide, have been connected to the extinction of bee colonies.
Bayer would have a fifth of the world’s seed and pesticide supplies under the proposed agreement.
Bayer is one of the corporations that benefited from the so-called “Green Revolution,” which saw high-yield proprietary seeds and agrochemicals supplant conventional agriculture. During the 1990s, the business used World Bank financing to sell millions of dollars worth of agrochemicals to underdeveloped nations.
When Bayer bought Aventis CropScience in 2002 and integrated it with their CropScience agrochemical subsidiary, it became a market leader in GMOs and agriculture. Bayer bought Nunhems, a Dutch seed company, in the same year, making it one of the top five seed firms in the world at the time.
Last year, Bayer made a $66 billion deal to buy Monsanto. If authorities accept the transaction, Bayer would become the world’s biggest seed and agricultural chemicals firm, with a quarter of the world’s seed and pesticide supplies under its control.
Monsanto’s Brief History
Monsanto was founded in 1901, and its first big product was saccharin, an artificial sweetener that has been linked to cancer in mice and rats.
Monsanto began producing chemicals in the 1920s, including polychlorinated biphenyls (PCBs), a recognized human carcinogen that the US prohibited in 1979. Monsanto claimed that it was unaware of PCB toxicity until the late 1960s, although internal corporate documents demonstrate that the firm was well aware of the risks from the start and participated in a widespread misinformation effort.
In the 1970s, the business that brought us nuclear weapons, PCBs, and dioxins changed its attention to agricultural chemicals.
Monsanto was involved in the Manhattan Project (which produced the first atomic weapon) in the 1940s, was one of the first manufacturers of the insecticide DDT (which was banned in the 1970s due to its toxicity), and promoted the use of agricultural pesticides containing dioxins (one of the “dirty dozen” environmental pollutants).
Monsanto utilized dioxin to make the defoliant Agent Orange in the 1960s. Agent Orange was widely used by American soldiers in the Vietnam War to clear jungle, and it is believed that millions of Americans and Vietnamese were poisoned, resulting in countless deaths, injuries, and birth problems. Monsanto, like PCBs, utilized dubious research to portray dioxin as harmless, although internal corporate records eventually revealed that Monsanto had long been aware of dioxin’s lethal consequences.
In the 1970s, the business that brought us nuclear weapons, PCBs, and dioxins changed its concentration to agricultural chemicals, focusing on herbicides, particularly glyphosate (Roundup).
Roundup, the most widely used agricultural pesticide in history, has been marketed to farmers and consumers as being ecologically beneficial. However, evidence is accumulating suggesting it is a human carcinogen. There’s also evidence that Monsanto and the Environmental Protection Agency (EPA) conspired to hide Roundup’s dangers.
Glyphosate is a likely human carcinogen, according to the World Health Organization, and California just added it to a list of possibly carcinogenic substances and may require warning labels on items containing it.
When Monsanto produced genetically engineered “Roundup Ready” crops, the use of Roundup skyrocketed. These plants have a trait that permits them to withstand glyphosate as it destroys the weeds around them.
Despite significant popular concern regarding GMO safety, scientists agree that they are not dangerous. GMOs are safe for individuals and the environment, according to a study issued by the National Academy of Sciences, Engineering, and Medicines in May 2017. However, detractors point out that the National Scientific Council—the research arm of the National Academy of Sciences—has links to Monsanto, the world’s largest marketer of genetically modified crops, and other GMO-friendly companies.
Occupy Sonoma County is the source of this image.
Who Stands to Gain from the Merger?
When challenged to explain the merger, senior executives from Bayer and Monsanto believe that consolidation is important to accelerate agricultural innovation, enhance crop yields, and lower farming input prices.
CNBC interviewed Bayer CEO Werner Baumann and Monsanto CEO Hugh Grant shortly after Bayer’s proposal to purchase Monsanto was publicized. “We can deliver better solutions, quicker to the producers so they can help contribute to feeding an ever increasing planet,” Mr. Baumann said of the agreement. That is exactly what this is about.”
Mr. Grant agreed, telling CNBC that the Monsanto-Bayer partnership will “unlock future innovation producers badly need right now.” Corn prices are at a ten-year low, while wheat prices are at a five-year low, according to him.
“As much as they are about the creation of new technology, mergers are about sustaining profit and keeping financially sound.”
“The whole agriculture business is essentially going through a transition,” Monsanto chief technology officer Robb Fraley said in a separate statement. It’s the world’s last major industry to be digitized.”
“It enables us to make more investments, have more capacities, and produce better solutions for farmers,” Fraley adds, “so they can grow crops with greater yields… and farm better, farm smarter.”
While the agriculture industry is experiencing a downturn—American farm revenue fell from $120 billion in 2013 to $62 billion this year, and the costs of seeds, pesticides, and fertilizers have increased by double digits in the last 4-5 years—it is also true that Monsanto and other agricultural behemoths are experiencing a sales slump. Monsanto said in 2015 that it will lay off 12% of its workforce.
“From that standpoint,” Quartz says, “mergers are as much about sustaining profit and keeping financially sound as they are about developing new technology.”
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Given the current economic crisis, some farmers are ready to take a chance on agribusiness corporations becoming larger if it implies lower input costs. Others, on the other hand, are concerned that consolidation may result in higher seed and chemical prices as smaller rivals are shut out.
Senator Chuck Grassley of Iowa, the greatest maize grower in the country, was forthright in his opinion of a Bayer-Monsanto combination. “When there is less competition, prices rise,” Mr. Grassley said.
“Prices rise when there is less competition.”
Less competition might result in higher pricing as well as fewer seed and pesticide options. “The large corporations’ innovation approach has operated as a barrier to entry for smaller firms interested in generating additional options for farmers,” Matthew Crips of agricultural technology company Benson Hill Biosystems said.
Farmers’ Restrictions are being tightened.
GMO opponents often complain about Big Ag dominating farmers by selling them patented GMO seeds that can’t be preserved and sown the following year. Plant genetics, on the other hand, is misunderstood in this way of thinking.
Many farmers avoid saving seeds because they believe it will result in lower yields and greater disease susceptibility. Farmers often claim that they have a choice in the seeds they sow. Those that chose GMO seeds do so because they believe it is the best option based on a variety of considerations.
Farms, particularly small and organic farmers, would be more vulnerable in a system that encourages large-scale, intense monoculture agriculture with chemical inputs if Big Ag megamergers limit the diversity of seeds and pesticides available to them.
Big Ag’s master strategy might include a shift to this kind of system. Friends of the Earth Europe discusses how agribusiness behemoths like Bayer, Monsanto, and others are collaborating with internet firms to establish data platforms that will enable them to gather and analyze data on soil, weather, and plant health in order to advise and supply farmers.
Friends of the Earth states, “This gives the firms immense control over farmers, who are likely to find themselves linked into whole chains of goods, restricting their choice to pick the inputs and procedures they employ.”
If the purpose of Roundup Ready crops (glyphosate-resistant seeds) was to sell more Roundup, it’s logical to conclude that the “datafication” of agriculture is a mechanism for a merged Bayer-Monsanto to sell more agricultural goods and services.
Data science, according to Monsanto, is the “glue” that binds its breeding, biotechnology, chemistry, and microbiological services together. It might also be the glue that binds farmers to the corporation in a profit-driven feedback cycle.
“At a time when customers are demanding more and more choice, farmers have less and fewer alternatives.”
“Big Ag wants to tie farmers into a system that gives them more control over our food and the data that goes with it,” says one farmer “Friends of the Earth’s Tiffany Finck-Haynes told ClassAction.com. “Farm equipment and fertilizer firms, as well as agrochemical corporations, are all merging, culminating in a corporately controlled and consolidated digital agricultural platform that binds farmers.
“Farmers are being given less and fewer alternatives at a time when customers are seeking more and more variety. Our food system is shattered, and any further concentration of farm firms would exacerbate the problem.”
Consolidation’s Downstream Effects
Consumers will experience the consequences of Big Ag consolidation on food production, regardless of the outcome. Rising seed and input costs would raise food costs; fewer options for farmers would mean fewer variety on store shelves; a more industrialized food system might jeopardize organic food supply; and more chemicals on crops would mean more chemicals in our diets and the environment.
Consumers in the United States have spoken out; we are eating more organic food than ever before, and the “locavore” trend of purchasing local, sustainable food is sweeping the country. The number of farmers’ markets increased by more than 350 percent between 1994 and 2013. Supporting local farmers and avoiding contaminants are two of the most common reasons for purchasing organic goods.
Big Ag, on the other hand, wants to lead us in the other way. Which raises the question: who benefits from our food supply’s corporatization and industrialization?
Examining the Industrial Farming Track Record: Promises vs. Results
Big Ag’s pledges to assist farmers and enhance yields are nothing new. Monsanto has emphasized the great potential of genetically engineered crops and industrial farming practices from the beginning. They’re now doubling down on their pledges to provide better agricultural solutions for everyone’s benefit.
More Monsanto “solutions” seem to be the answer to Monsanto-caused issues.
However, it’s difficult not to be skeptical of these statements. Monsanto has increased in value by more than sixfold in the previous 15 years, reaching a market capitalization of more than $100 billion. This rise has mostly been fueled by sales of Roundup and Roundup Ready crops.
Crop yields in the United States have increased during the same time span, but the results pale in comparison to those in Europe, which has rejected GM crops. Meanwhile, European farmers have decreased their usage of pesticides, whilst their American counterparts have increased their use. Seed costs in the United States have also grown considerably.
According to a study by the National Academy of Sciences, “no evidence exists that the introduction of GE crops resulted in faster annual gains in on-farm agricultural yields in the United States than had been witnessed previous to the adoption of GE crops.”
The New York Times reported “no discernable advantage in yields” for farmers in North America when comparing crop yields in the United States and Canada to those in Western Europe. In instance, pesticide usage has decreased by 36% in France, Europe’s top producer and one that does not accept GMOs, while it has climbed by 21% in the United States.
Roundup is a herbicide developed by Monsanto. Ready crops were expected to reduce herbicide use since farmers could use glyphosate instead of a combination of herbicides and avoid tilling farms to kill weeds, lowering runoff. However, glyphosate-resistant “superweeds” have emerged as an unexpected result, necessitating larger glyphosate and other pesticide dosages.
Monsanto, fortunately, has answers to the superweed challenge on hand, including new herbicides and Roundup Ready crop generations.
Patents on GMO crops typically last 20 years, after which corporations may make off-patent generic GMOs. The patent for Roundup Ready expires in 2015. Roundup Ready 2 was released in 2009, and a third generation is now being developed.
Monsanto has also developed crops that are dicamba-resistant. Some dicamba products are said to have volatilized, became airborne, and spread to other farmers’ land, resulting in massive production losses for non-dicamba resistant crops.
In short, More Monsanto “solutions” seem to be the answer to Monsanto-caused issues. This, no doubt, is a great business model. But it is hardly a model of security for farmers, those that depend on them, or the environment.
Bayer and Monsanto want us to think that their collaboration is for the betterment of mankind. In the end, the public has few reasons to favor the merger and many reasons to dread it, based on the corporations’ track histories.
Frequently Asked Questions
Why did Bayer and Monsanto merger?
A: Bayer and Monsanto have merged because first, it is easier for both companies to be able to meet the demand of consumers across all different demographics. Second, they can expand their opportunities in other countries where there are more farmers growing GMO crops. Lastly, since many people fear GMOs due to potential health risks associated with them, this merger will allow these two large agricultural corporations have a better chance at staying relevant in regards to consumers concerns about food safety as well as boosting profits.
What is wrong with Monsanto products?
A: Monsanto is a company which produces genetically modified seeds. They are designed to withstand heavy pesticide use, including glyphosate, which has been shown to be harmful for humans and animals alike. It also damages the environment by destroying wild plant species that help control pests and weeds in our fields as well as polluting water sources with its toxic pesticides.
What is the Bayer Monsanto merger?
A: Bayer AG and Monsanto Company announced on July 25, 2018 that they would be merging into a new company named Bayer-Monsanto Holding AG. The merger is estimated to create the world’s largest seed and pesticide company with a market capitalization of more than $63 billion USD.