34 / SEEDWORLD.COM JANUARY 2019 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 in 2015 and 2016, respectively, when the public conversation began speculating about how much these mega-mergers would increase the farm cost of corn and soy- bean seeds and agricultural chemicals. There was almost unanimous agreement on the street that market concentration at this scale would certainly increase farm- ers’ input costs and further limit access to innovative seed technology. DowDuPont assured farmers that the two companies will “provide 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 companies in the market would mean less competition, which would lead to fewer products and higher prices. Development of new types of pes- ticides and seeds has substantially improved agricultural productivity. Agricultural input markets have evolved, and family-owned and other small busi- nesses have given way to larger agricul- tural supply enterprises. The evolution in the industry was coupled with increasing market concentration in seed and chemi- cals 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 licens- ing structures 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 rela- Expert Weighs In on the Dow-Dupont, Bayer-Monsanto Acquisitions. Joe Funk jfunk@issuesink.com Diving into the Mega-Merger Waters Cross licensing agreements between multinational seed and agricultural chemical companies before the 2017-2016 mergers. tionships start to crumble that we may start seeing some blockages 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 researchers at Texas A&M University, College Station, published “Effects of Proposed Mergers and Acquisitions Among Biotechnology Firms on Seed Prices,” a macroeconomic analysis of agricultural seed and chemical mergers, acquisitions and competition. The study supports the general opinion 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