Volatility

May 16, 2016

Poison Sector Concentration: Monsanto May Get Bought

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In my January piece on agrochemical sector concentration I mentioned that Monsanto’s last chance for a merger may be with BASF. Now the business press is percolating with talk of either BASF or Bayer buying Monsanto outright. Both companies have herbicide portfolios not dependent on glyphosate. Bayer also has extensive seed company holdings, while BASF has little in that way.
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All the talk reinforces the perception that Monsanto’s Roundup business is seen as having a highly questionable future and that the only thing which might really interest anyone is the company’s potential to develop GM traits other than those based on glyphosate, along with the germplasm holdings among the seed companies Monsanto owns.
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The specter of “monopoly” always touted in these connections by the corporate media and government is a misdirection ploy. The sector already has monopolies on pesticides and GM seeds, and the handful of companies in an oligopoly sector almost never compete on price, product quality, or anything else which might benefit customers or the public. Rather, they compete for market share through advertising and government lobbying. So a BASF/Monsanto or Dow/DuPont merger is unlikely to make any difference for industrial farmers. Anyone who actually cared about the evils of monopoly would target the sector as the monolithic whole it is, not fret over cosmetic mergers within the sector.
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We can expect that any reconfigured entity will try to make the Monsanto name go away in the same way that Monsanto’s former contractor Blackwater changed its name to “Xe”.
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Whatever cosmetic changes are made including in the name, we must still keep calling it Monsanto.
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The main point of all this is as I analyzed in my longer piece. As pesticides and GMOs continue to fail, and as hypothetical ideas for the sector’s future become more and more scarce, it becomes harder for indoctrination and government subsidies to prop up the sector’s failed products, and the sector is less able to support the number of companies it has. Therefore they face the necessity of consolidating. This is always the sign of a sector’s economic and intellectual calcification.
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