Saturday, October 29, 2016

The Only Thing that Competes as a Genesis of Calamity with a Possible Trump Win

Bayer Deal for Monsanto Follows Agribusiness Trend, Raising Worries for Farmers

The New York Times  by Leslie Picker, Danny Hakim and Michael J. de la Merced SEPT. 14, 2016

“We’re producing our crops at a loss now,” said Don Halcomb, who grows corn and other crops on his family farm in Adairville, Ky.  Credit Joe Buglewicz for The New York Times 

Don Halcomb, a 63-year-old farmer in Adairville, Ky., is expecting his profit to vanish this year, largely because of the confluence of falling crop prices and rising costs for seeds and other materials.

The price of an 80,000-kernel bag of seed corn rose to $300 from $80 in the last decade, as the companies that produced them consolidated, he said. And with the recent decline in commodity prices, Mr. Halcomb said he expects to lose $100 an acre this year.

“We’re producing our crops at a loss now, just like the oil guys are pumping oil at a loss,” Mr. Halcomb, who grows corn, soybeans, wheat and barley on his 7,000-acre family farm, said by telephone on Wednesday. “You can’t cut your costs fast enough.”

It is a common plight of farmers across the United States, with the global agriculture industry in a wrenching downturn. Because farmers have produced too much corn, wheat and soybeans, they have been forced to slash prices to sell their crops. They have also reduced spending on seeds, pesticides and fertilizer, which has eaten into sales at agribusiness giants, including Monsanto and DuPont.

In response, these companies have sought multibillion-dollar deals to cut costs and weather the industry’s storm. Four major agribusiness mergers have been announced in the last year. The latest is Bayer Ag’s $56 billion takeover of Monsanto — the largest acquisition of 2016 — announced on Wednesday. Every merger creates the possibility of higher costs for farmers.

Mr. Halcomb buys seeds with traits licensed to Monsanto of St. Louis and seeds from DuPont, which has a deal pending to merge with Dow Chemical. His fertilizers are made of potassium compounds and phosphate produced by Agrium of Calgary, Alberta, which on Monday agreed to combine with the fertilizer producer Potash Corporation of Saskatchewan. He uses pesticides made by Syngenta of Switzerland, which agreed in February to a takeover by the China National Chemical Corporation.

“It’s just like any other industry that consolidates,” Mr. Halcomb said. “They tell the regulators they’re cost-cutting, and then they tell their customers they have to increase pricing after the deal’s done.”

The companies say they are merging to diversify and increase growth and research capabilities, but these deals, given their size and scope, have already caught the attention of lawmakers and regulators in Washington. There is no guarantee that they will all receive regulatory approval, and some companies may have to sell assets to allay antitrust concerns. Dow’s merger with DuPont is under Justice Department review.

The market seemed to anticipate hurdles for the Monsanto deal on Wednesday. Shares of the company closed about 20 percent lower than the $128 per share cash offer from Bayer, which is based in Leverkusen, Germany. Shares of each company gained less than 1 percent after the deal was announced.

Adding the assumption of about $10 billion of Monsanto debt, Bayer’s total $66 billion pact is the largest all-cash deal, according to data compiled by Thomson Reuters, ahead of InBev’s $60.4 billion offer for another St. Louis-based company, Anheuser-Busch, in June 2008.

Senator Charles E. Grassley, Republican of Iowa and chairman of the Judiciary Committee, scheduled a hearing next week to discuss the possible effect of these agriculture-related mergers on farming. Iowa produced more corn last year than any other state, according to the National Corn Growers Association.

“It seems to be catching fire and happening so fast with so many,” Senator Grassley said in a phone interview. “When you have less competition, prices go up.”

European competition regulators also said publicly, before a Bayer-Monsanto deal was even signed, that they would look at how it could affect prices and the availability of seed products, as well as research.

Liam Condon, who leads Bayer’s crop-science division, said in an interview that the company did an “extensive analysis” with regard to antitrust before approaching Monsanto in May. Mr. Condon said that he does not believe there is much overlap between their portfolios, because Bayer’s focus is largely on crop protection, while Monsanto’s is on seeds and traits. He said the companies assume they may need to sell off some assets to appease regulators.

Monsanto, which is famous for its production of genetically modified seeds, rejected several offers from Bayer as too low. Wednesday’s deal represented a 44 percent premium to Monsanto’s stock price on May 9, the day before Bayer’s interest in a deal surfaced. To assuage Monsanto’s concerns, Bayer threw in a $2 billion breakup fee if the deal fell apart on antitrust grounds.

The strategic goal of the deal, according to Bill Selesky, an analyst at Argus Research, is to create a one-stop-shopping experience for farmers, making Bayer the world’s largest supplier of seeds and farm chemicals. By improving the product for farmers, the combined company could ultimately raise prices, Mr. Selesky said in an interview.

Senator Grassley said that he had spoken with a few farmers who believed the deals were necessary so large agribusinesses could continue to absorb the costs of researching and developing products and getting government approval for them.

Tim Hully harvesting corn at Walnut Grove Farm in Adairville, Ky. Credit Joe Buglewicz for The New York Times 

Bayer and Monsanto said they planned to cut about $1.2 billion worth of costs as part of the deal, helping to improve efficiency.

But Jim Benham of Versailles, Ind., the president of the Indiana Farmers Union, was not so optimistic. He blamed the rising costs of inputs — seeds, fertilizer and the like — for eating away at farmers’ profit margins, and warned that consolidation will make it worse. Costs have already risen by double digits over the last four to five years, and the proposed Bayer-Monsanto merger could accelerate that.

“The merger is going to hurt the farmer,” said Mr. Benham, who grows corn, soybeans and sometimes wheat on his 1,400-acre farm. “The more consolidation we have on our inputs, the worse it gets.”

Mr. Condon of Bayer said that the company would not raise prices without providing more value to farmers.

“This is a highly competitive industry, and just increasing prices without having any additional advantage or benefit for growers won’t go anywhere,” he said. “It’s up to us to show what we’re offering will help farmers improve their return on investment.”

Some farmers said the consolidation could even enable prices to fall.

Christine Hamilton manages a farm of more than 12,000 acres in Kimball, S.D., growing crops like corn and operating a ranch. She said that if the deal can pass the antitrust screening, then maybe it could actually help farmers.

“I understand how companies need to get bigger in order to be competitive,” she said. “As we are in a low part of the cycle, anything that might have a chance of reducing our input prices would be great.”
Bayer and Monsanto: A Merger of Two Evils
September 20, 2016 Organic Consumers Association by Katherine Paul
Billions Against Bayer Logo

It’s been about a week since Monsanto and Bayer confirmed their intention to say “I do”—ample time for media, lawmakers, consumer and farmer advocacy groups, and of course the happy couple themselves, to weigh in on the pros and cons.
Reactions poured in from all the usual suspects.

Groups like the Farmers Union, Food & Water Watch, Friends of the Earth and others didn’t mince words when it came to condemning the deal. (Organic Consumers Association tagged it a “Marriage Made in Hell” back in May, pre-announcement, when the two mega-corporations were still doing their mating dance).

Predictably, the corporate heads of state last week promoted the proposed $66-billion deal as an altruistic plan to improve “the lives of growers and people around the world.” This week, they told Senate Judiciary Committee members that the merger “is needed to meet a rising food demand.”

Is anyone out there still buying the line that Monsanto and Bayer are in the business of feeding the world? When the evidence says otherwise?

Even if that claim weren’t ludicrous, who thinks it’s a good idea to entrust the job of “feeding the world” to the likes of Bayer, a company that as part of the I.G. Farben cartel in the 1940s produced the poison gas for the Nazi concentration camps, and more recently sold HIV-infected drugs to parents of haemophiliacs in foreign countries, causing thousands of children to die of AIDS?

The sordid, unethical, greedy, monopolizing and downright criminal histories of both Monsanto and Bayer have been well documented.

Does allowing them to merge into the world’s largest seed and pesticide company pose what two former Justice Department officials call "a five-alarm threat to our food supply and to farmers around the world?"

In a press release, Pesticide Action Network senior scientist Marcia Ishii-Eiteman said:

"Just six corporations already dominate worldwide seed and pesticide markets. Additional consolidation will increase prices and further limit choices for farmers, while allowing Monsanto and friends to continue pushing a model of agriculture that has given us superweeds, superbugs and health-harming pesticides. Instead, we need to invest in agroecological, resilient and productive farming.”

Without question, this deal, which strengthens the ties between Big Pharma, Big Food and Big Biotech, will hurt farmers and consumers.

Not to mention an ecosystem already on the brink.

But for those of us committed to ridding the world of toxic pesticides and hideous factory farms, to restoring biodiversity, to cleaning up our waterways, to revitalizing local economies, to helping small farmers thrive, to reclaiming and regenerating the world’s soils so they can do their job—produce nutrient-dense food while drawing down and sequestering carbon—the marriage of Bayer and Monsanto doesn’t change much.

As we wrote last week when the deal was announced, Monsanto will probably pack up its headquarters and head overseas. The much-maligned Monsanto name will be retired.

But a corporate criminal by any other name—or size—is still a corporate criminal.

Merger or no merger, our job remains the same: to expose the crimes and end the toxic tyranny of a failed agricultural experiment. #MillionsAgainstMonsanto will simply morph into #BillionsAgainstBayer.

Feed the world? Or feed the lobbyists?

Bayer and Monsanto had plenty of time to perfect their spin on the merger before the big announcement. Yet even some of the most conservative media outlets saw through it.

A Bloomberg headline read: “Heroin, Nazis, and Agent Orange: Inside the $66 Billion Merger of the Year.” From the article:
Two friends making dyes from coal-tar started Bayer in 1863, and it developed into a chemical and drug company famous for introducing heroin as a cough remedy in 1896, then aspirin in 1899. The company was a Nazi contractor during World War II and used forced labor. Today, the firm based in Leverkusen, Germany, makes drugs and has a crop science unit, which makes weed and bug killers. Its goal is to dominate the chemical and drug markets for people, plants and animals. 

Monsanto, founded in 1901, originally made food additives like saccharin before expanding into industrial chemicals, pharmaceuticals and agriculture products. It’s famous for making some controversial and highly toxic chemicals like polychlorinated biphenyls, now banned and commonly known as PCBs, and the herbicide Agent Orange, which was used by the U.S. military in Vietnam. It commercialized Roundup herbicide in the 1970s and began developing genetically modified corn and soybean seeds in the 1980s. In 2000, a new Monsanto emerged from a series of corporate mergers.

A skeptical Wall Street Journal reporter suggested that the merger, one of three in the works in the ag industry, is a sign of trouble: “The dominance of genetically modified crops is under threat,” wrote Jacob Bunge on September 14. Bunge interviewed Ohio farmer Joe Logan who told him:

 “The price we are paying for biotech seed now, we’re not able to capture the returns,” said Ohio farmer Joe Logan. This spring, Mr. Logan loaded up his planter with soybean seeds costing $85 a bag, nearly five times what he paid two decades ago. Next spring, he says, he plans to sow many of his corn and soybean fields with non-biotech seeds to save money.

Nasdaq took the merger announcement as an opportunity to highlight numbers published by showing that Monsanto and Bayer are not only the two largest agrichemical corporations in the world, they’re also two of the biggest spenders when it comes to lobbying.

Together, according to OpenSecrets, Bayer and Monsanto have spent about $120 million on lobbying in the last decade. Monsanto’s spending has been largely focused on the agricultural industry, while Bayer has spent heavily in the pharmaceutical arena.

Both Monsanto and Bayer forked over millions to keep labels off of foods that contain GMOs, according to OpenSecrets:

A big issue for both companies has been labeling of genetically modified foods, which both companies oppose. That put them in support of the Safe and Accurate Food Labeling Act (H.R. 1599), which was signed into law this summer. The law permits corporations to identify products made with genetically modified organisms in ways that critics argue will be hard for consumers to interpret, while superseding state laws that are sometimes tougher, like the one in Vermont.

To be clear, the “Safe and Accurate Food Labeling” was just an intentionally misleading description of a bill intended to protect corporations from having to reveal the GMO ingredients in their products.

A criminal by any other name

Last week, the International Criminal Court (ICC) in The Hague made a big announcement of its own. For the first time in history, the ICC will “prioritise crimes that result in the ‘destruction of the environment,’ ‘exploitation of natural resources’ and the ‘illegal dispossession’ of land,” according to a report in the Guardian.

The announcement came within the same two-week period as three new reports on the sad state of our ecosystem, all of which implicate industrial agriculture:

•    Researchers at the University of Virginia University of Virginia reported that widespread adoption of GMO crops has decreased the use of insecticides, but increased the use of weed-killing herbicides as weeds become more resistant, leading to “serious environmental damage.”

•    Mother Jones magazine reported that “A Massive Sinkhole Just Dumped Radioactive Waste Into Florida Water The cause? A fertilizer company deep in the heart of phosphate country.”

•    NASA and the National Oceanic and Atmospheric Administration (NOAA) said that when it comes to global warming, “even the records themselves are breaking records now” after reporting that Earth just experienced its hottest August on record.

What’s that got to do with Bayer and Monsanto? Industrial, chemical, degenerative agriculture is the largest contributor to greenhouse gas emissions. Organic regenerative agriculture, by contrast, holds the greatest promise for drawing down and sequestering excess carbon from the atmosphere.

Whether or not regulators approve the Bayer-Monsanto merger, these companies will continue their rampage against nature. Governments and courts have a lousy track record when it comes to holding these, and other, corporations accountable for the damage they’ve inflicted, over decades, on human health and the environment.

The ICC has signaled that this may change. In the meantime, frustrated with the lack of action and fed up with paying the price for making corporations like Bayer and Monsanto filthy rich, the grassroots are fighting back.

On October 15-16, a panel of distinguished international judges will hear testimony from 30 witnesses and scientific and legal experts from five continents who have been injured by Monsanto’s products.

This grassroots-led international citizens’ tribunal and People’s Assembly (October 14-16) will culminate in November with the release of advisory opinions prepared by the judges. The tribunal’s work, which includes making the case for corporations to be prosecuted for ecocide, is made all the more relevant by the ICC’s announcement.

The International Monsanto Tribunal is named for Monsanto, the perfect poster child. But the advisory opinions, which will form the basis for future legal action, will be applicable to all agrichemical companies—including Bayer.

In the meantime, we encourage citizens around the world who cannot participate in the official tribunal and People’s Assembly, to show solidarity by organizing their own World Food Day “March Against Monsanto.” 

Monsanto. Bayer. The name doesn’t matter, and though size does matter when it comes to throwing weight around, the crimes perpetrated by the companies remain the same. It’s time to stop them.
Katherine Paul is associate director of the Organic Consumers Association.

No comments: