The Rural Women’s Assembly interviewed Mariam Mayet from the African Centre for Biodiversity on the Bayer-Monsanto merger and the implications this will have for rural women in the region.
Q: Please give us a background to the Bayer-Monsanto Merger
MM: Bayer and Monsanto are major manufacturers of agrochemicals, improved and genetically modified (GM) seed. Bayer, one of the world’s largest agrochemical companies, has an extensive agrochemical portfolio in South Africa, while Monsanto, the world’s largest seed company, operates in both seed and agrochemicals, particularly herbicides. Monsanto is also a pioneer of genetic modification of agricultural crops and the largest maize seed company in South Africa by sales. Most importantly, South Africa’s core agricultural markets of maize and soya are dominated by Monsanto’s GM traits which are licensed out to other companies for use.
In May 2016, Bayer started the bidding process for Monsanto. Monsanto shareholders accepted the bid for US$6 billion in December 2016. If the merger is approved by commission authorities in 30 countries, the new Bayer-Monsanto will be the world’s largest seed and agrochemical company. The Bayer-Monsanto merger has been driven by factors which involve:
a) Financial drivers including; the need to reduce the cost of operations, research, and development while maintaining market share and profit levels; large investment funds where institutional investors own shares in the companies and low-interest rates which enable access to cheap capital.
b) The need to own germplasm and traits to remain competitive; where the companies want to access proprietary technologies owned by other companies to be able to generate new products. Control of big data; Bayer notes that one of its prime reasons for acquiring Monsanto is because it owns The Climate Corporation, which has the most powerful data science engine and the most extensive field research network
c) Control of big data; Bayer notes that one of its prime reasons for acquiring Monsanto is because it owns The Climate Corporation, which has the most powerful data science engine and the most extensive field research network
d). The need to find new markets; increased operational, regulatory and research and development costs are forcing seed companies to grow in size to realize economies of scale and the expected return on investment.
Q: Why is the Bayer-Monsanto Merger so important?
MM: The Bayer-Monsanto merger, needs to be viewed in the context of the 3 mega-mergers taking place in the seed and agrochemical sector- namely Bayer- Monsanto, Dow-Dupont, and ChemChina-Syngenta.
These are enormous players in the agricultural input market, particularly seed and agrochemicals. If all three mergers are approved, just three corporations will control about 60% of the global patented seed market, and 64% of the agrochemical market. The Bayer-Monsanto merger would translate into almost 30% of the global commercial seed market, and 25% of the agrochemical market- making it the world’s largest supplier of seeds and agrochemicals. In South Africa, this single company would control more 30% of both markets.
It is within this context, where the seed and agrochemical industry is already highly concentrated and consolidated, that we need to view this merger.
Through the competition lens, this merger may be seen as complementary, since Monsanto is a major player in the commercial seed sector particularly maize, and Bayer has operated primarily in the agrochemical sector. In South Africa, Monsanto is the main maize breeder, dominating the national variety list. Bayer is a major player in cotton on the continent. They also hold different patents and knowledge on herbicides, pesticides, and fertilizers.
The vertical and horizontal integration taking place through these mergers has a wealth of potential impacts on competition, and innovation within the sector, but also major potential negative consequences of public interest and food security. With the acquisition of big data, particularly in light of climate change, this merger has the ability to control the future of the agro-food system, as agriculture becomes more digitized, controlling vast information on seed, soil, and weather.
Q: What are the implications of this merger for the agricultural sector and food system in South Africa, and more broadly for the region?
MM: a. Path dependency and narrowing of options for farmers and consumers
It is clear that in an already corporate controlled and concentrated sector, these mergers will further entrench the future direction of the farming system and marginalise more sustainable models, such as agroecology, which is increasingly called for by organisations representing African smallholder producers.
With the aggressive push of improved commercial varieties- particularly hybrids and GM- met with revisions and development of seed trade, plant variety protection regimes and biosafety laws and regulations across the continent, corporate interests are being secured and often subsidized by the public purse, preventing and criminalizing the farmer ability to save, reuse and exchange seed. It is this practice that has enabled genetic diversity as farmers have been able to select seed and breed it for a variety of traits, including drought resistance, flavour and cultural preferences. This has major implications for small-scale and subsistence farmers and is part of the plan these companies across the continent. This is being demonstrated by programmes such as WEMA (Water Efficient Maize for Africa), that could end up being vehicles to disperse genetically modified crops to small-scale farmers.
This contributes to creating an agricultural development path dependent on corporate seed and agrochemical inputs and reduces options for agricultural inputs and agricultural practices.
b. Decreasing Innovation
There is a large and significant trend towards the privatisation of agricultural research in recent decades. In South Africa, total expenditure on agriculture-related research has increased significantly but spending and orientation of the research are led by the private sector, with private agricultural firms, including seed and agrochemical companies in South Africa forming subsidiary agreements with multinational companies. With privatised agricultural research and development there are adaptations of imported technologies under license from multinational companies. Technology fees and royalties are paid to patent or rights holder, and result in extraction of value from South Africa and also closes possibility for domestic innovation.
Furthermore, private funded research and development in agriculture are focused on few lucrative commercial crops such as maize, wheat, and soy especially in South Africa, while other indigenous crops are left by the wayside. There is no support from the private sector to maintain indigenous seeds and varieties, which leads to a decline in seed diversity and diversity of production practices. Already, a large amount of agricultural biodiversity is lost around 75% of plant diversity has been eroded as many farmers have abandoned the use of landraces and local varieties in favor of uniform genetic varieties.
Farmers-especially smallholders continue to play a crucial role in maintaining and reproducing agricultural biodiversity. There is no research and development (R&D) in supporting the farmers in refreshing germplasm, selection, and enhancement of diverse varieties, and with the merger, the public sector R&D which is subordinate to corporate interests, resources will not be channeled towards supporting farmer innovation and variety maintenance and enhancement in the field.
c. Further entrenchment of Intellectual Property Regimes
Intellectual Property rights including Plant Breeders rights, restrict farmers from engaging in seed enhancement in the field because by law they are not allowed to save and reuse protected seed without paying royalties. These property rights also restrict cumulative innovation by other smaller seed companies from using protected varieties as a basis for further development.
d. Increase in Seed Prices, Increase in food prices
The mergers are likely to cause reduced innovation and reduced diversification of research and development. Increased price of inputs are likely to result, in fewer varieties and options available to farmers, will have a knock on effects on the price of food.
With the recent drought and rising food prices, there have been major issues surrounding food security. Food security is more of an access and affordability issue, rather than availability. There is enough food being produced but is not always accessible and affordable. The number of food insecure people living in the countries that make up the Southern African Development Community (SADC) has increased from 10.3 million in 2014 to 13.4 million in 2015 (DAFF, 2015).
It is vital to assess the real costs versus the benefits there may be increased yields but at high nutritional, health, economic and environmental costs. Increased costs of inputs, increasing risk and tending to favour larger and larger farms, with implications for the viability of small farmers, who may be paying up to 50% of production costs on seed.
Q: What are the implications for rural women and their seed systems?
MM: The deepening of the dependency on corporate seed and agrochemical inputs that will result from this extensive, aggressive Green Revolution across the continent, has major implications for small-scale farmers, and particularly women, who feed the continent, and the custodians of seed and agrobiodiversity.
Programmes such as WEMA, drive an industrial model of agriculture, and lock-out farmers’ seed systems, the diverse and locally adapted farmers varieties, for corporate, patented seed. This dependency is unsustainable and locks farmers into a technological treadmill, and dependency syndrome. Under the guise of offering solutions to the socio-economic and ecological crises being experienced, they fail to address these issues in context-specific, socially and ecologically just manners. Many alternatives do exist locally, with drought tolerant varieties, that exist within communities, which could be used and be made available, rather than providing seeds that have endless royalties through extended patents, with traits farmers do not want or need.
The marginalisation of small-scale farmers and more agroecological farming systems focusing on few crops has major implications on dietary diversity, and nutrition.
Q: Do you have any suggestions on how rural women’s movement can begin to organise around this issue?
MM: Rural women farmers should continue to advocate locally with extension workers and agricultural officials to provide diversified support, rather than simply accept the conventional training and packages, that tend to be subsidized or conducted by the private sector. They should be aware of the trap that is linked with these subsidies, and corporate tactics create further dependency.
They can continue to create platforms which support learning between women farmers, to share stories and experiences and provide new avenues. – agroecological farming models- built on ecological and social justice and equity
Farmers can advocate for the conservation, utilization and enhancing of local germplasm – for the public good, which is more suitable for the local socio-ecological context.
More public research and support for seed saving, in-situ conservation and improving, and storage- so that communities are skilled to be able to manage their own resources, to the benefit of all. Pressure on input subsidy programmes to have long-term and short-term plans to address food insecurity and rural development can also be addressed. FISPs (Farmer input subsidy programmes) should address the real needs of farmers, and support food and seed sovereignty and agroecology.
The African Centre for Biodiversity (AcBio) recently published a paper on the implications of an approved Bayer-Monsanto merger for the South African agricultural system. To read the paper click here