Opinion A big deal

First it was Dow Chemical and DuPont merging into one another. Then came Syngenta’s acquisition by China National Chemical Corporation. And now we have Bayer buying out Monsanto. The significance of the three deals lies not only in their happening within just over nine months, but also the huge consolidation underway in the global farm input supplies industry. Bayer is the world’s second largest agro-chemicals firm behind Syngenta and just above Dow-DuPont, while Monsanto is the largest in seeds and genomics. Monsanto becoming part of Bayer creates an entity that would be a global leader in both agrochemicals and seeds. This extent of consolidation among suppliers of inputs embodying proprietary chemistries and plant breeding/biotech know how — on top of the stranglehold exercised by the “ABCD firms” (Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus) over international agri-commodity trade — isn’t the best thing today for farmers grappling with low prices for their produce.

The effects will be no less in India, where Monsanto and Bayer are already the biggest players in cotton and hybrid rice seeds, respectively. This is in addition to their respective subsidiaries — Seminis and Nunhems — who dominate the domestic hybrid vegetable seeds market along with Syngenta, which, in turn, also has the second largest share in agrochemicals after Bayer. There are two ways to respond to the consolidation that may seem detrimental to the interests of our farmers. The first would be to engage in the usual MNC-bashing, which isn’t too useful. Whether we like it or not, farmers need and have right to new technologies that help boost crop yields, cut losses from pest and disease or save labour and time. If MNCs are the only ones giving them these, too bad. It cannot be reason for denial.
The more constructive response is to learn from China. The Syngenta acquisition isn’t an isolated one. That, along with yet another state-run enterprise COFCO’s buyout of two big grain traders, Noble Agri and Nidera, reflect a conscious Chinese policy to actively engage with the current realities of international agri-business. Such focus is sadly missing among policymakers in India, which faces a no less formidable challenge of ensuring food security for growing population with rising incomes. The ambivalence with regard to allowing commercial planting or even field trials of genetically modified crops, that too indigenously developed, is only a manifestation of the lack of a strategic vision for agriculture in tomorrow’s India. The Bayer-Monsanto deal should be a wake-up call for those still stuck in slumber.