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National Grange Cautions Justice Department on Soon-To-Be Announced Cotton Ruling
WASHINGTON, D.C. (March 19, 2007) -- The National Grange today expressed concern that a Justice Department ruling due this month on a merger of two major companies in the U.S. cottonseed market will have far-reaching anti-competitive consequences. William A. Steel, president of the National Grange, said that the proposed $1.5 billion merger of Monsanto and Delta & Pine Land Company could also cause harm to other major crops, such as corn and soybeans. A ruling on the long-delayed merger is expected by the end of March.
“Delta & Pine accounts for 50 percent of the U.S. cottonseed market, and as much as 78 percent of market share in the south-central and southeast cotton-producing region,” he points out. “Monsanto currently controls more than 95 percent of the herbicide tolerance and insect resistance traits in the cottonseed market. Delta & Pine currently has on-going relationships to develop and deploy competing traits with other innovative life science companies, such as Bayer, Dow, DuPont, and Syngenta. These competitive relationships will be discontinued if the proposed merger is allowed to take place, and other major crops, such as corn and soybeans, will then face similar anti-competitive practices,” Steel says.
The merger of the two companies was proposed last August, and has been before the Department of Justice and Federal Trade Commission since then for approval. If approved, according to Steel, Monsanto would dominate the American cottonseed market lock, stock, and biotech. “We are greatly concerned over such anti-competitive practices,” he adds.
Opposition to the proposed merger has come from farmers, biotech traits competitors, state regulators, as well as agricultural and rural life groups such as the National Grange. Their concern has been that a combined company would be in a position to harm potential competition in biotech traits, and raise rivals’ costs in major cottonseed markets.
It’s estimated that at least 85 percent of the nation’s cotton crop is genetically modified. Monsanto’s genetic traits are contained in about 95 percent of all cottonseed planted. At the same time, Delta Pine is the U.S. market leader in breeding, production, and marketing of U.S. cottonseed. Taken together, a merged company would raise serious hurdles for other would-be competitors, while bringing undue influence on farmers’ prices. Steel says the National Grange supports valid marketplace competition.
The National Grange president cautioned that the proposed merger could result in a closed cotton supply chain system that could raise prices, reduce incentives for developing and marketing conventional cottonseed, and reduce choices available to cotton farmers and consumers alike. He called on the Justice Department to consider both agriculture policy and market competition in their final ruling.
The National Grange is the nation’s oldest national agricultural organization, with 2,700 state, county, and local grassroots chapters in 37 states. Grange members provide service to agricultural and rural communities on a wide variety of issues. Additional information about the organization’s positions is available from : pweller@agriwashington.org.
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