Tuesday, August 30, 2016 by D. Samuelson
Just over thirty years ago, there were more than 7000 seed companies. Most of them were owned by families, and even the largest didn’t control over 1% of the seed market. Boy, has the world changed since then. Counter Punch reports, “Nowadays, six transnational corporations own 63% of the global seed market and 75% of the agrochemical market. The Big Six are Monsanto, Dow, Dupont, Syngenta, Bayer and BASF.” Consolidating chemicals and seeds into even a tighter corporate grip is happening as I type this. Dow and Dupont are in talks. After Monsanto’s failed bid for Sygenta, Bayer Crop Science made a surprise bid for Monsanto, one of the world’s most hated companies. After the announcement, Bayer’s share price dropped to a 2.5 year low.
Bloomberg reports, “Monsanto’s ‘reputation is disastrous, it’s a mess,’ said Eric Schiffer, chief executive officer of Irvine, California-based Reputation Managements Consultants.com, an advisory firm. ‘Monsanto is viewed as evil.’
“In the event of a deal, Bayer would probably drop the Monsanto name and conduct a review of its business practices, including how to litigate on patents, Schiffer said. Such moves might encourage investment from money mangers who until now ‘didn’t want to be aligned with evil,’ he said. Bayer declined to comment on Monsanto’s reputation.'”
Bloomberg reports: “Monsanto is particularly vulnerable to a takeover after piling up a mountain of problems this year. The company has cut its earnings forecast, clashed with some of the world’s largest commodity-trading companies and become locked in disputes with the governments of Argentina and India. Shares are down 19 percent in the past 12 months.
“’It’s a relentless string of bad news,’ Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co. in New York, said. ‘It’s almost like they forgot to sacrifice a goat to the gods.’
“. . . Monsanto is facing a slump in agricultural commodities and its offer to buy Syngenta for about $46.2 billion was spurned last year. Sales in the quarter ending in February fell 13 percent from a year earlier to $4.53 billion. Prices for corn and soybeans declined in the last three calendar years, hurting demand for everything from tractors to weed killer.”
Pushing back Monsanto’s glyphosate killing fields is a lovely thing, and those quarterly losses do make the company vulnerable to takeover. Bayer, should the deal go through, would be making a grand shift in strategy, according to the Wall Street Journal.
“Bayer AG’s bid to acquire Monsanto Co. would bring the German pharmaceutical maker deep into the lucrative but socially controversial business of genetically modified crops while paring the share of health care in its business.
“The deal may face a hurdle with Bayer’s investors, many of whom have invested primarily for its larger health-care business and are less familiar with agriculture and genetically modified crops, said Markus Manns, a fund manager at Union Investment, a Bayer shareholder. ‘I’m not sure we would appreciate this shift from pharma,’ Mr. Manns said.”
In 2014, Germany was one of sixteen EU nations that engaged in dialogue concerning their right to opt out from using GE seed, regardless of EU approvals. At that time, German Federal Minister of Agriculture Christian Schmidt said, “This decision represents a step on the way to national bans on the cultivation of GE seeds.”
The global anti-GMO movement is working. Eat organic food and boycott anything with GMOs.