NFU Urges Trump Administration to Oppose Dow-DuPont Merger
March 29, 2017Press Releases
Contact: Andrew Jerome, 202-314-3106
ajerome@nfudc.org
WASHINGTON – Following European Union approval of the proposed merger between Dow Chemical Co. and DuPont Co., National Farmers Union (NFU) is calling on the Trump Administration to block the deal. The merger, if approved by the U.S. Justice Department, would create the largest biotechnology and seed firm in the U.S.
"The reduction in competition that would be wrought by a Dow-DuPont merger will result in less innovation, higher prices, and less choice for farmers," said NFU President Roger Johnson in a letter to President Trump. "Given the damaging and lasting effects this merger will have on family farmers and rural America, we urge you to oppose this merger," he said.
Johnson noted that the Dow-DuPont merger occurs amidst a massive wave of consolidation in the agricultural inputs sector. The combination of the two companies, coupled with the concurrently proposed mergers of Bayer-Monsanto and ChemChina-Syngenta, threatens to limit major players in the agrichemical and seed sectors to just four companies.
And that is bad news for farmers who rely on competitive pricing for their inputs.
"The merger of Dow and DuPont, the 4th and 5th largest firms, would give the resulting company about 41% of the market for corn seeds and 38% of the market for soybean seeds," said Johnson. "If the Dow-DuPont and Bayer-Monsanto mergers were both approved, there would effectively be a duopoly in the corn and soybean seed markets."
Johnson noted that the merger would limit choice in the marketplace for farmers. As Dow and DuPont look to leverage any efficiencies from the merger, there will be reductions in seed portfolios.
He also noted that the merger will likely diminish innovation competition, as the elimination of direct competition from one another will reduce the incentive to develop new products.
"Dow and DuPont biotechnology pipelines contain overlapping input and output traits in development for corn, soybeans, and cotton, as well as crop protection," said Johnson. "Innovation is key to farmers and ranchers' ability to increase crop production and improve crop quality. Without standalone competition between Dow and DuPont incentivizing innovation, farmers' profits and consumers' access to affordable food are at risk."
While Dow and DuPont agreed to sell some of their key research and development assets, mergers in this consolidated of an environment are difficult, if not impossible, to remedy, he concluded.
"It is highly likely that many of those assets will be purchased by companies among the Big 6. Therefore, any reallocation of share within the large incumbents through divestitures would only result in a game of market concentration 'musical chairs.'"
To download an audio file of Roger Johnson's quote, visit our website at nfu.org/audio.
National Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.
Look for us online at NFU.org and on Facebook, Twitter and Instagram.
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Jimmy Fagan Jr. says:
Economic consolidation will further erode the situation of family farmers and rural communities. Three mega mergers in this article would leave less than a handful of multinational corporations to effectively control the entire Agricultural sector.
Remember no farmers no food, and the bigger these companies get the further they shovel a sickening industrial slop down all of our throats.
Support the closest small farm to your home. Pay attention to how our society functions to extract the resources and fortunes made on the backs of the many, to the hands of the few through means much more violent then these blatantly illegal mega mergers. Educate yourselves on the news they don't show (thank you National Farmers Union) Support family farms because our future depends on it. Trump better jump
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P Krueger says:
Dear NFU,
You know it's really too bad your leadership is against progress. You're against returning to logical and economical energy policy but rather support legislation and restrictions on US citizens in the name of "climate change". There is no evidence that humanity has caused the climate changes we are currently seeing. Consider only the facts, not opinions, and you'll have to agree.
You also oppose reversal of the monopolistic policies the ACHA has created. Really? I thought you stood for choice and freedom. With ACHA, the choices of policies and insurance companies is restricted to only one or a couple options per state with the carriers ability to raise premiums being unrestricted. Fact: since the AHCA has been enacted, health premiums have increased more rapidly and with less benefits than before.
Lastly, you're opposed to mergers in agricultural suppliers but not mergers of farming operations. Successful farmers can buy the neighbors farm to make his business bigger and more efficient but suppliers to farmers cannot? What kind of logic is that? The problem in agriculture is overregulation! Government meddlers require more and more compliance to standards of proof for introducing new technologies, which increases the cost to do so. That burden has become so great, requiring years and millions of dollars to bring each new technology to market. Can a farmer afford to invest in a new grain facility that he cannot use for 10 or more years? Absolutely not! But that's exactly what the government does to businesses trying to introduce new technologies. Currently the only way to remain in the R&D game is to consolidate resources, eliminate duplication and overlap and reduce overhead which frees up resources to weather the government regulation storm. The simple and logical solution is to reduce government regulation. Why don't you advocate that?
So please start being advocates for farmers and farming. The people in the agricultural industry are the greatest asset we have in this country. Take the regulations and burdens off their backs and let them do what they love and are good at, rather than pit one segment against another!