Agribusiness Mergers Putting Farmers In A Tight Spot

Feb 8, 2018

Credit Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Farmers who grow the corn and soybeans that our food system requires are in a tight spot.

As Mother Jones reports, growers depend on a very small number of companies, which have enormous leverage to raise prices, for seeds, pesticides, and fertilizers. Then, when farmers go to sell their crops, a few very large grain-trading firms have the leverage to keep prices down, due to a lack of competition.

The agribusiness market has been consolidating since 2015, starting with the Dow/DuPont merger, followed by several others, resulting in decreased competition and higher prices.

And now, as the Department of Justice considers a proposed merger between seed/pesticide giants Monsanto and Bayer, grain-trading giant Archer Daniels Midland is looking to take over its rival, Bunge.

A 2016 Texas A&M study found that if the Monsanto-Bayer merger goes through, it would increase the price for corn and soybean seeds by around 2 percent and cotton seeds by 20 percent.