Monopoly and Monoculture – The Food issue
Weapons of Reason
In only 20 years, a handful of multibillion-dollar companies have come to dominate the global food industry. Though unassuming to look at, the tiny seeds they produce have generated not just food, but vast sums in corporate profits.
Words Camilla Hodgson
Illustration Dave Prosser
Illustration Dave Prosser
Growing crops requires the planting of seeds, which germinate, shoot, flower, and eventually produce new seeds that become the crops of the following year. Plants have always worked this way. But since the mid-1990s, the number of agricultural seed suppliers at the beginning of this process has rapidly decreased. As the market has consolidated, the cost of seeds and pesticides has shot up, denting farmers’ profits and lining corporate pockets. What was once an industry dominated by small, family-run farms has become big, industrial business.
In 1996 there were 600 independent seed companies operating in the US. By 2009, this number had shrunk to 100, and by 2016 the ten biggest seed sellers controlled 75% of the global market.
Today, the seed market is dominated by the so-called ‘big six’ agricultural biotechnology companies. These six alone — Monsanto, Syngenta, Bayer, BASF, DuPont, and Dow Chemical — control 63% of the world’s commercial seeds and 75% of global agrochemicals.
But the big six may be about to become a big four if the latest in a series of proposed mega-mergers between agribusiness giants, a $66 billion takeover of Monsanto by Bayer, is approved by regulators. The deal comes in the wake of a $130 billion Dow Chemical-DuPont merger, and ChemChina’s agreed $43 billion takeover of Syngenta.
The proposed Bayer-Monsanto deal would create the world’s largest agribusiness company, in control of 29% of the world’s seeds and 24% of the world’s pesticides. European Union antitrust investigators and the US Department of Justice both gave the merger the green light on the condition that Bayer sells some of its assets to BASF.
A concentrated market is good news for a handful of powerful suppliers, who can name their prices, but bad news for consumers — in this case, the world’s farmers. Between 1994 and 2010, average seed prices in the US spiked higher than any other farm cost, more than doubling relative to the prices farmers received for their crops. And while farmers’ incomes have stagnated — US farmers profits are expected to fall to a 12-year low in 2018 — ‘big ag’ has seen profits soar.
Before the 1980s, the big six were not major players in agriculture but had backgrounds in the chemicals and pharmaceuticals industries. But in 1980, a US Supreme Court ruling fundamentally altered the business of agriculture, helping to propel those corporations with the will and the means right to the top of the food chain.
“In 1996 there were 600 independent seed companies operating in the US. By 2009, this number had shrunk to 100, and by 2016 the ten biggest seed sellers controlled 75% of the global market.”
Looking back beyond the twentieth century, the world’s farmers traditionally saved seeds for planting from one year to the next and shared varieties between each other. In the early 20th century, the western seed market was commercialised and growing numbers of farmers began to buy seeds from specialist sellers who provided quality assurances. As agricultural science developed, these businesses sought to enhance their products, genetically modifying seeds to give them special characteristics, like drought or pest resistance.
In 1980, Chief Justice Warren E. Burger made a landmark ruling: companies that had developed specific breeds of genetically modified seeds could now buy their exclusive patents. For arable farmers, this meant access to their most fundamental resource could now be aggressively controlled by the companies providing them with seed.
The incentive for companies to invest in research into genetically modified seeds grew exponentially: those with the expertise and the financial means, like Monsanto, could now develop hugely profitable new products over which they held a monopoly.
In 1996, the first patented genetically modified seeds became available on the American market. Before long, the pool of seed sellers reduced, as bigger companies bought up smaller ones and merged with their competitors. Although smaller companies could, in theory, develop competing products, the high costs associated with doing so effectively barred entry to the market.
“What you’re seeing is not just a consolidation of seed companies, it’s really a consolidation of the entire food chain,” said Monsanto representative Robert Fraley, now Monsanto vice president and chief technology officer, in 1996.
Given their chemical backgrounds, it was a relatively small step for the agribusiness giants that had taken control of the global seed market to begin developing chemical herbicides, pesticides and fertilisers. To ensure farmers didn’t stray to a competitor for one or the other, these companies cleverly designed seeds to be used alongside their chemicals. Competition in agriculture shrunk once again, leaving farmers doubly reliant on big ag.
Patents mean power. Not only did Justice Burger’s ruling mean seed companies had control over who could buy and license their products, it also allowed them to threaten farmers who strayed outside the rules with legal action, including a ban on farmers saving patented seeds from one season to the next. Instead, they had to buy new seeds every year.
Monsanto has been accused of employing particularly aggressive tactics to enforce its patent rights. In 2000, it even admitted to hiring detectives — whom it called ‘auditors’ — to root out and prosecute farmers who were saving seeds. Since 1997, the company has filed 147 lawsuits relating to seed patent infringements in the US.
Since the 1990s, an estimated 75% of plant genetic diversity has been lost as farmers worldwide have turned to cultivating genetically identical, high- yielding crops. Three quarters of the world’s food is now generated from only 12 plants and five animal species, with rice, maize, and wheat contributing nearly 60% of the plant calories and protein consumed by humans.
This reliance on only a few crop varieties is potentially dangerous in the long term: diversity in the natural world and access to a variety of seeds with different traits and resistances is vital, particularly in the context of climate change. But, as farmers’ profit margins have narrowed, growing a single crop and enforcing a monoculture on agricultural land, which is simpler, easier to automate, and requires fewer employees, has become an attractive option for many.
“In 1980, Chief Justice Warren E. Burger made a landmark ruling: companies that had developed specific breeds of genetically modified seeds could now buy their exclusive patents.”
Cultivating monocultures in tandem with the use of chemical products can also reduce the quality of soil over time — over a billion tonnes of vital topsoil are lost annually in the EU alone — which in turn leads to farmers using greater quantities of synthetic fertiliser in order to prevent crop yields from falling.
The corporates say their methods are justified, arguing the world will need to feed an estimated 9.5 billion people by 2050. The use of genetically modified seeds in conjunction with tailored chemical products, they say, produces much-needed higher crop yields than more traditional methods of farming.
According to Professor Jonathan Jones, an expert in genetically modified organisms, the herbicides and pesticides currently for sale in the UK are “much less toxic” than most of those they replaced, even though there is fierce debate over their damage to both the environment and human health. Moreover, he says, farmers need them in order to be able to cultivate profitable harvests: “You can lose huge amounts of crops to weeds, so you need pesticides.”
However, Jones points out that the high costs associated with developing, testing, and patenting new products means “only multinational corporations have the money” to develop them, meaning farmers are “stuck with a narrow range” of chemicals to choose from.
“What you’re seeing is not just a consolidation of seed companies, it’s really a consolidation of the entire food chain.”
So what are the alternatives? Simply choosing to farm in a different way is not always so simple. Data from 2016 shows that the amount of organic farmland in the UK fell by almost a third since the 2008 financial crisis, with only 2.9% of total UK farmland run organically.
The drop was largely due to organic farm closures and a reduction in the number of farms converting to organic methods. Many farmers complain that choosing to farm organically is often not economically viable.
Going organic “is way too much of a risk”, says farmer Edward Barker. “Ten years ago there was a boom [in organic farming], but it went down during the crash.” Gaining organic certification isn’t just about farming methods either; farmers have to buy their way in with fees of at least £800 per year.
Industrial farming is designed for scale. In the UK, the number of small crop farms of under 20 hectares fell by a third between 2005 and 2015, while the number of farms with 200 hectares or more increased. The demand for agricultural land has caused its price to soar, barring small farmers from acquiring the means to produce. In 2015, a report by the European Parliament highlighted concerns that local populations were being displaced, describing the mass purchase of land in Eastern Europe for industrial farming purposes as “land grabbing”.
“We have a pressing land problem in Europe concerning the access to, control over and use of land,” it said. As of March 2015, large-scale land deals in EU countries totaled 166,359 hectares — an area about the size of Greater London. That number is now 247,252 hectares, which is a 49% increase.
In February 2017, nearly 325 farming, beekeeping, religious, food safety and conservation groups signed an open letter urging the US Department of Justice against the proposed big ag mega-mergers, arguing they would negatively impact farmers’ livelihoods and skew the balance of power and market consolidation even further in favour of a few big corporates.
Bayer and Monsanto have played down antitrust concerns, with Bayer chief executive Werner Baumann emphasising that the majority of Monsanto’s revenues are in the Americas, while Bayer is much bigger in Europe and Asia. Nevertheless, the merger would combine the two largest cotton seed sellers in the US. A more concentrated pesticide industry is also likely to be in a stronger position to influence lawmakers and regulators, and play down their environmental concerns.
Despite corporate scaremongering about the quantity of food the world will need as the global population grows past 9 billion, industrially farmed grain has been in oversupply for several years, and the UN has estimated roughly a third of all food produced worldwide is lost or thrown away. So do we really need big ag to help us produce more?
In September 2016, Green MEP Molly Scott Cato began a petition against the Bayer and Monsanto merger. If the deal goes ahead, she said, “Bayer would be able to decide virtually single-handedly what is grown in our fields and ends up on our plates.” The very definition of a monopoly.