Department of Justice Allowed
Monsanto Cotton Monopoly

Monsanto first tried to buy Delta & Pine Land Company (DPL) in 1998. DPL is the nation’s biggest cotton seed breeder. Monsanto owns the genetically modified, or transgenic, seed traits. The Department of Justice did not allow the merger because of competition concerns.

But Monsanto took another run at it, announcing a do-over merger in August 2006. The Department of Justice is now different. DOJ can’t seem to find a merger it does not like. Indeed, it approved Smithfield’s acquisition of Premium Standard Farms in May, 2007, even though the result is a monopoly in pork packing in the Southeast United States.

OCM opposed Monsanto’s proposed acquisition. Monsanto controls 96% of the market for insect resistant, and 99% of the market for herbicide resistant, cotton traits. The company controls 95% of the market for herbicide tolerant corn traits, 80% of the market for insect resistant corn traits, and 98% of the market for herbicide tolerant soybean traits. Monsanto has purchased scores of competing seed dealers in acquiring tremendous market power in the U.S. Buy the competition so they don’t compete, a very effective tactic.

A Monsanto-DPL merger combines the underlying cotton seed with the transgenic traits for tremendous market power and the ability to increase prices with little competitive restraint. The merger also cuts off substantial DPL joint development efforts with other companies. Monsanto halts the innovation of other companies through this deal, preserving and increasing its market power for many years.

Farmers feel these effects… in their wallet. Technology fees are imposed on farmers over and above the underlying seed price. The tech fees justified as paying for the transgenic portion of the cotton seed DNA. But the company increases these prices exhorbitantly each year. For cotton, Monsanto has increased tech fees by 229% in four years, which is 50-70% of the price of a bag of cotton seed. And you thought health insurance premium increases were bad.

If you replant soybeans, like farmers have done since farming began, Monsanto’s Pinkerton Detectives trespass on your field, grab some soybeans, test them and decide whether to sue you for patent infringement. They are not nice guys.

OCM pointed out these problems to DOJ. DOJ ignored us. OCM is now working with state Attorneys General to file a state level suit against the company. You will likely here more of our efforts in the coming months. MS