Why Bayer's Massive Deal to Buy Monsanto is so Worrisome

Monsanto. It’s hard to even say the name without triggering a strong reaction. The company has long been the public face of GMOs, thanks in part to the sheer dominance of its corn, soy, cotton, and other crops engineered to be resistant to the herbicide Roundup.

But pretty soon, Monsanto may no longer exist. At least not in its current form.

On Wednesday, the German chemical conglomerate Bayer offered to buy up Monsanto for $56 billion, in what could prove to be the largest corporate merger of the year. Monsanto has accepted the bid. And if the deal is approved by regulators — still an open question — the new company would become the largest agribusiness on the planet, selling 29 percent of the world’s seeds and 24 percent of its pesticides.

That would put the new firm in a commanding position vis-à-vis our food supply. Which is why European Union regulators and the US Department of Justice are likely to scrutinize this deal more closely than usual, to make sure it doesn’t create an all-consuming monopoly that can crank up prices on farmers and shoppers. The deal comes amid a blurry rush of agribusiness consolidation in recent months, with ChemChina-Syngenta and DuPont-Dow Chemical forming their own multibillion-dollar Voltrons.

Some onlookers are fretting that the reduced competition could shrivel up innovation, leading to slower improvements in crop yields. Others worry that these new agricultural giants may have outsize political power. "They’ll have more ability to lobby governments," says Phil Howard of Michigan State University, who studies consolidation in the food industry. "They’ll have a lot more power to shape policies that benefit themselves at the expense of consumers and farmers."

Read More