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Aug. 24, 2016 Des Moines Register reports: Iowa Sen. Chuck Grassley said Tuesday he will hold a hearing next month to discuss a wave of consolidation among seed and chemical producers, including the merger of Dow and DuPont. The chairman of the Senate Judiciary Committee said he is calling the hearing because some producers have expressed a "great deal of concern" about the mergers. It is still being determined who will testify in late September. Consumers, companies affected by the mergers and antitrust experts are among those expected to appear. "Because of the importance of the seed and chemical industries to agriculture and the nation's economy, the Senate Judiciary Committee is planning to hold a hearing in late September," Grassley told reporters. "The hearing will focus on the transactions currently being reviewed by antitrust regulations and the current trend in consolidation in the seed and chemical industries." Monsanto, the world's largest seed company, is being courted by Bayer AG. In addition, ChemChina and Syngenta - along with DuPont, parent of DuPont Pioneer, in Johnston, and Dow Chemical - are in the midst of their own deals. The $130 billion Dow-DuPont deal is expected to close this year, with the companies saying the merger could eventually bring more jobs to Iowa. If these mergers were completed, the seed and chemical sector would be left with just four major players - including one owned by the Chinese government - which Grassley and others fear could not only lead to higher prices for farmers but stifle innovation. The deals come as the agricultural economy remains mired in a prolonged slump that has squeezed farm income and left farmers with less money to buy seed, chemicals and other equipment. With shrinking profits and pressure to churn out new products faster, there is more incentive for businesses to combine to tap into a deeper pool of resources. David Miller, director of research at the Iowa Farm Bureau Federation, said he is supportive of a hearing, given the "unprecedented nature of multiple companies engaged concurrently in potential merger activity." Miller said Congress should use the hearing to not only review the tie-ups but also determine whether Congress and regulators may actually be creating regulatory pressures for companies to merge in order to remain competitive. One example he cited was the increasing cost and time for seed and chemical makers to develop and get approval from U.S. regulators for a new product, a process that squeezes out competition from smaller firms. "We don't think any of the mergers in and of themselves is significantly problematic, but the combination of all of them occurring at the same time creates a different dynamic," he said. "We think there is good reason to look at them both on their individual merger implications but also in the broader context of what does it mean when you have this many merging simultaneously?" Tweet |
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