Farmers and ranchers know market forces have led to major-company mergers like Bayer-Monsanto, but they cannot afford to lose access to technology and innovation if they go through, AFBF Chief Economist Dr. Bob Young told the Senate Judiciary Committee on Tuesday, September 20, 2016.
“AFBF has had several—and repeated—assurances from the companies involved as to their intent to maintain as strong an innovation arm as they can,” Young said. “We have no reason to doubt, but we also are reminded of the old line: trust, but verify.”
Young noted the market for seeds, chemicals and crop nutrients is poised to shrink from six major companies to just three. He asked that regulators review these mergers not only in light of market concentration, but also the structure of the entire industry in a post-merger environment.
“Everyone’s knee-jerk reaction is to think that increased concentration will lead to higher prices for these inputs,” Young said. “Knees tend to jerk reflexively, but sometimes they jerk with reason.”