Proposed merger has whole world on watch

Proposed merger has whole world on watch

Top Stories
Aa

The Land says: Australian farmers are on tenterhooks watching the progression of Bayer’s offer to buy Monsanto and what implications it has on their businesses.

Aa

AUSTRALIAN farmers are on tenterhooks watching the progression of Bayer’s offer to buy Monsanto and what implications it has on their businesses.

A Bayer-Monsanto conglomerate would have truly epic reach on the global scale. There will scarcely be a village, no matter how small or how remote where seeds or herbicides or other products made by the business are not distributed.

This concerns some Australian growers, who say the new company will exploit the lack of competition in the space and that prices for key inputs will rise.

The merger would see 90 per cent of the world’s crop chemical sales in the hands of just four companies – Bayer-Monsanto, Dow-DuPont, BASF and ChemChina-Syngenta. Even more worryingly, some have raised issues about the prospect of being forced into closed-loop systems, with the use of proprietary products a necessary part of using a particular company’s technologies and products.

It will require an eagle-eyed competition regulator to ensure the new entity does not take liberties with its strong market position. 

But equally, not all the news of this takeover is bad. 

Regarding the Bayer deal, Australian farmers have been pleased to see Bayer, which has demonstrated a strong commitment to the grains industry in Australia, take the initiative in this deal.

They are confident the new company would be interested in developing products suitable for Australian conditions and crops, given their recent investment in multi-million dollar wheat and oilseed breeding facilities here. 

Although a player in the seeds market here, principally through the Roundup Ready trait used in our genetically modified canola, Monsanto’s major focus has been the lucrative market in crops such as corn and soybeans grown in the Americas. 

Australia desperately needs private sector research and development to complement government and industry funded work. The Bayer-Monsanto conglomerate could bring an enviable balance sheet to the space.

Of course there will always be a commercial focus in their work and farmer lobby groups need to work hard to ensure any R and D breakthroughs benefit the whole of industry not just this multi-national beast.

So long as the company is kept honest, its enormous research capabilities could give Australian agriculture a welcome kick along.

Aa

From the front page

Sponsored by