Big Ag just became humongous.

On 4 July, Bayer AG, the German multinational pharma company, bought the world’s most controversial agriculture company, Monsanto, in a $66-billion deal that gave Bayer control over a whopping 30% of the global seed market and a quarter of the pesticide market.

The merger, two years in the making, is part of a wave. US’ DowDupont and China’s ChemChina-Syngenta were formed through a merger in 2017. With Bayer-Monsanto (Bayer will later drop the Monsanto tag), 61% of the global seed and pesticide market will be in the hands of just three players. In 2016, there were six major rivals.

Indian seed companies, “small ag”, were alert, of course. So was the Competition Commission of India (CCI), the anti-trust regulator that monitors competition. The repercussions could be immense as agriculture drives India’s economy. The sector is closely monitored by outspoken activists like Vandana Shiva and Greenpeace, for whom corporate agriculture in general and Monsanto, in particular, represent corporate evil. They claimed that the merger could eliminate competition in certain markets and drive up seed and pesticide prices, making Indian farmers beholden to foreign corporate interests. In 2015, Monsanto, Bayer, or both, were dominant players in the Indian market for branded hybrid seeds of cotton, rice and at least 10 vegetable seeds. Bayer holds 40% of the hybrid rice market in India, for example.

“These are two very well positioned companies in India,” says David Spielman, senior research fellow at the International Food Policy Research Institute (IFPRI) in Washington, DC. “India and most other countries need to constantly be monitoring the effects of merger and industry consolidation on competitiveness and prices that farmers pay for these inputs.”

In May, CCI approved the merger with careful conditions. Bayer needs to sell a part of its herbicide and seeds business to an independent third party, and Monsanto needs to divest its 26% stake in Maharashtra Hybrid Seeds (Mahyco), a major Indian seed company. Bayer is planning to divest the businesses to Germany’s chemical company BASF, contingent on CCI approval. CCI has also asked Bayer to license on fair terms its digital platform that analyses agronomic data to recommend to farmers how best to use fertilizer, seeds and herbicides. It has asked Bayer to grant the government seven years of free access to agro-climatic data.

With CCI’s conditions in place, Indian seed and chemical companies are not very worried, according to interviews with industry executives. But perhaps they should be. Agriculture is undergoing rapid transformation to digital and Big Ag is helming that trend. In official-speak, CCI laid out its assessment thus: “Post combination, the Combined Entity’s [Bayer-Monsanto’s] transformation into a one-stop-shop platform, providing packaged solutions to the farmers in the seed and traits value chain and the agrochemical supply chain through their digital applications would lead to enhancement of its market power vis-à-vis its competitors who may be unable to offer similar integrated services to the farmers… The Combined Entity would enable more data capture, the ability to spread development costs and allocate more resources to simply out-spend smaller competitors.


Gayathri Vaidyanathan

Gayathri writes on health, environment and science. She has reported and produced stories for the Washington Post, Discover, Nature, and the New York Times, amongst other publications. In her last assignment, she was the lead science writer for E&E News in Washington, D.C. E&E News is a news organisation focused on energy and the environment. Over the past decade, Gayathri has travelled across North America, Africa and Asia on long-form reporting projects. She has a master’s in journalism from Columbia University and a bachelor's in biochemistry from McMaster University in Ontario. At The Ken, Gayathri will write on healthcare, the pharmaceutical business and the environment. Based in Bengaluru, you can reach her at gayathri at the rate

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