12 GERMINATION.CA MARCH 2019 evolved, and family-owned and other small businesses have given way to larger agricultural supply enterprises. The evolution in the industry was cou- pled with increasing market concentra- tion in seed and chemical supply, and the industry was further shaped by widespread mergers and acquisitions. “The agricultural industry is largely made up of collaborations and cross licensing,” says Garrett Stoerger of Verdant Partners in Champaign, Ill. “There is very much an interwoven web of licensing struc- tures that are taking place across the seed industry. In my view, as long as these stay intact, there is plenty of room for competition. It is only when those relationships start to crumble that we may start seeing some block- ages and barriers to entry. If you stop the cross licensing, it becomes much more quickly an industry dominated by only a few players.” Complexities Shaping Competition In September 2016, four research- ers at Texas A&M University, College Station, published Effects of Proposed Mergers and Acquisitions Among Biotechnology Firms on Seed Prices, a macroeconomic analysis of agri- cultural seed and chemical mergers, acquisitions and competition. The study supports the general opin- ion held by farmers and many farm groups and other nongovernmental organizations (NGOs) that contend the recent mega-mergers will have an undesirable effect on competition and seed prices. According to the study’s authors (Henry Bryant, Aleksandre Maisashvili, Joe Outlaw and James Richardson), these mergers will result in reduced competition, but at levels significantly less of what is feared by many merger opponents. “It is hard to see how any of these deals will lead to increased competi- tion, but that is not to say that there will be a decrease of competition,” Stoerger says. “Increased competi- tion was not a driver for these deals. Experts weigh in on the Dow-Dupont, Bayer-Monsanto deals. JoeFunk DIVINGINTOTHE MEGA-MERGER WATERS Cross licensing agreements between multinational seed and agricultural chemical companies before the 2017-2016 mergers. IN 2015 AND 2016, the headlines announcing the pending Dow- DuPont merger of equals and the Bayer-Monsanto merger were still wet on the page when the public began speculating on how much these mega-mergers would increase the farm cost of corn and soybean seeds and agricultural chemicals. There was almost unanimous agreement on the street that market concentration at this scale would certainly increase farmers’ input costs and further limit access to innovative seed technology. DowDuPont assured farmers that the two companies will “pro- vide growers across geographies with a broad portfolio of solutions and greater choice and help them to increase their productivity and profitability.” Bayer likewise predicted growers will benefit from a broad set of solutions to meet their current and future needs. Farmers, however, remained unconvinced. The common concern was that even with the divestitures required by the U.S. Department of Justice (DoJ), the merger would significantly reduce the choice for corn and soybean, decrease quality and diversity of seeds and increase seed prices. Many farmers reasoned that fewer compa- nies in the market would mean less competition, which would lead to fewer products and higher prices. Development of new types of pesticides and seeds has substantially improved agricultural productiv- ity. Agricultural input markets have