Agricultural News
NFU's Roger Johnson Says Mergers in the Agricultural Industry Don't Necessarily Benefit Producers
Tue, 21 Jun 2016 22:23:05 CDT
As agricultural corporations like Dow and DuPont and Bayer and Monsanto continue to propose mergers with one another, National Farmers Union President Roger Johnson says farmers and ranchers are going to be left paying the price.
"We are going to have fewer choices of inputs to buy, we're going to have less competition in the marketplace, we're going to have higher costs as a result, we're going to have less innovation that happens," he says. "That's what happens when industries consolidate."
Johnson says NFU opposes the proposed mergers of these major agribusinesses, as his organization was actually founded more than 100 years ago to help create more options for producers.
"As agriculture was developing, there were very few buyers - and in many cases, farmers had one choice of a buyer to sell their products to - and very few input suppliers," he says. "Many of our formative years were spent organizing cooperatives to provide competition in the marketplace."
Because some of the world's larger agricultural corporations are headquartered outside of the United States, Johnson says there is a specific entity of the federal government charged with reviewing international mergers and most of their focus is on national defense.
"They look at these mergers from the standpoint of is there any likelihood these foreign companies might end up with some sort of a strategic military advantage as a result of an acquisition or a merger," he says.
Johnson says a proposed merger between Syngenta and ChemChina is of particular concern.
"There should be no doubt what we can expect, and we cannot expect from the Chinese is that they're going to behave like we do," he says. "They don't have a free market economy - it's a communist country - the bulk of their industries are being sort of run by companies, but the companies are predominately government-owned companies."
Johnson points to several instances where China has elected to play by its own rules.
"There's always an element of politics, of national interest that's at play in there," he says. "We've seen that play out any number of times over approval of biotech traits or banning of different meat products or poultry products going into China.
Radio Oklahoma Ag Network Farm Director Ron Hays spoke with Johnson during his recent trip to Oklahoma. Click on the LISTEN BAR below to hear them talk more about mergers in the agriculture industry.
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