An activist dressed as an ear of corn June 4 protests against the U.S. agriculture company Monsanto ahead of the upcoming G7 summit in Munich, Germany.

An activist dressed as an ear of corn June 4 protests against the U.S. agriculture company Monsanto ahead of the upcoming G7 summit in Munich, Germany.

The world’s largest seed company, Monsanto, is hoping to expand its business in insecticides and other herbicides by acquiring Syngenta, a major player in the chemicals business based in Switzerland. So far, Syngenta has said no, but Monsanto is likely to raise its offer. If Syngenta ultimately agrees to the deal, some fear the possible takeover could mean higher seed and food prices. In addition, anti-trust regulators will be looking closely at Monsanto’s expanded power in global seed and pesticide markets.

Guests

  • Alan Bjerga Reporter focused on agricultural policy and commodities, Bloomberg News
  • Scott Partridge Vice president, strategy, Monsanto
  • Diana Moss President, American Antitrust Institute

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The world's top seller of seeds, Monsanto, is hoping to acquire the world's top seller of crop pesticides, the Swiss company, Syngenta. So far, Syngenta has turned down Monsanto's bid, but antitrust regulators and some farmers are paying close attention. Here to talk about industry consolidation in agri-business, Alan Bjerga of Bloomberg News.

  • 10:07:24

    MS. DIANE REHMFrom a studio at KWMU in St. Louis, Missouri, Scott Partridge of Monsanto and by phone from Boulder, Colorado, Diana Moss of the American Antitrust Institute. I'm sure many of you will want to chime in. Give us a call at 800-433-8850 or you can send us an email to drshow@wamu.org. Follow us on Facebook or Twitter. And thanks to all of you for being with us.

  • 10:08:00

    MR. ALAN BJERGAThank you.

  • 10:08:02

    MR. SCOTT PARTRIDGEThank you, Ms. Rehm.

  • 10:08:02

    MS. DIANA MOSSThank you.

  • 10:08:03

    REHMGood. After being turned down the first time, I gather Monsanto is putting together another bid for Syngenta. Why would it be so important for Monsanto to acquire Syngenta?

  • 10:08:26

    PARTRIDGESure. And first, Ms. Rehm, thank you so much for having us and me, in particular, on. I've been a long time listener and this is quite a thrill for me so I appreciate the privilege very much.

  • 10:08:36

    REHMThank you.

  • 10:08:38

    PARTRIDGESo let me talk a little bit about the combination. And first, we're not preparing to make another bid. We believe the bid we've made is more than generous and I'm happy to talk about that in more detail later. But let me talk a little bit about what this combination means to us, means to our employees and our shareholders and most importantly to our farmer customers because it has created a lot of interest and a lot of excitement.

  • 10:09:03

    PARTRIDGEWhen I think about 15 -- and look back 15 years ago when we launched the company that we are today, we were focused on one challenge then and we're focused on that same challenge today. And that challenge is to help farmers around the world to sustainably improve agricultural productivity and that's necessary. It's required to feed a planet that within the lifetime of our children, we'll be adding 2 billion more people.

  • 10:09:36

    PARTRIDGEIt's a huge task and that alone, given the population growth, is just daunting. But Diane, when you couple that with climate change, with the volatility we're seeing globally with regard to weather, it makes the necessity to create new and innovative solutions just that much more compelling. So this combination really we're looking at a new company, that opportunity, and with that new company, a new vision.

  • 10:10:03

    PARTRIDGEAnd I believe with that new vision, we're going to do a couple of things. We're going to rapidly accelerate innovation. We're gonna put in the hands of more farmers, better tools and we're gonna enable them to produce more in a more sustainable and precise way. And I think that's just a really neat opportunity for us to help farmers do what is so important.

  • 10:10:26

    PARTRIDGEAnd when I look at that, I look at it from the farmer perspective and think of how it will touch farmers personally. They're -- I spend a lot of time talking to farmers.

  • 10:10:36

    REHMSure.

  • 10:10:36

    PARTRIDGEAnd I think about the mom farming in Africa, farming a small plot just to feed her children. And she's planting seeds that yield about what our American farmers planted at the time of the Civil War, very low-yielding seeds. We'll have the reach to bring her better seeds. I think about the farmer I met in Ukraine who wants biotechnology that's not in his hands right now.

  • 10:11:06

    PARTRIDGEThis combination will give us the scope of products to offer him that sort of innovation. And then, I think about the Nebraska farmer I met last year who asked for greater speed and more rapid innovation to unlock the genetic code for improving drought-resistant crops. And I look at those challenges and those are the challenges we're gonna try to meet.

  • 10:11:26

    PARTRIDGEWe're gonna try to bring new products to the farmers. We're gonna try to do it fast. I don't know how quickly or how many, Diane, but I can tell you if we're able to do this combination, we're gonna keep doing what we've done for the past 15 years and we're gonna try real, real hard to give farmers the tools they need. That's why this is important.

  • 10:11:40

    REHMGive us a sense, Scott, if you would, of what Monsanto is offering Syngenta.

  • 10:11:49

    PARTRIDGEYes. We offered them 449 Swiss francs, the rough equivalent, depending on what point of time, as around $45 billion. It is a 43 percent premium of where their shares were trading before our negotiations with them were leaked to the public. Since then, their shares have gone up significantly, which is a clear indication, from what their shareholders have told us, of interest by their shareholders in seeing this transaction be completed.

  • 10:12:20

    REHMAnd do you have a sense as to why they turned you down?

  • 10:12:27

    PARTRIDGEWell, I think in any negotiation, you know, they likely want the best price they can get and I suspect it's just plain old fashioned negotiation, Diane.

  • 10:12:38

    REHMSo you feel that if you up your price, they may rethink your offer?

  • 10:12:46

    PARTRIDGENo. We don't plan to up our price. We think our price, at a 43 percent premium, is generous. We think the combination is compelling. Our shareholders have told us that. We're hearing that from their shareholders and we think this a transaction that at that premium should get done.

  • 10:13:05

    REHMAll right. Scott Partridge, he's vice president for strategy for Monsanto. Alan Bjerga, who would you say are Monsanto's biggest competitors in the field in the seed business worldwide?

  • 10:13:23

    BJERGAWell, Monsanto is the biggest player, globally. And depending on the region, you'll see anywhere in the 25 to 35, 40 percent market share range in that. But they certainly are in a competitive field. DuPont Pioneer, actually, is number two, is very close second in a lot of different areas, and then you have Syngenta and Dow Chemicals, as sort of the two other big players.

  • 10:13:43

    BJERGAAnd then, there are other players, as well. There are some Japanese companies and BASF and folks who are also working in this field, but it's a very competitive marketplace. It's a fast-growing marketplace and it's an area where, if you're Monsanto, you're really looking at where some of the growth is. And while Monsanto's very strong in the Western hemisphere, North and South American, and a presence globally, there's certainly room to grow in the developing world, you know, among those African farmers, for example, that Scott was talking about.

  • 10:14:09

    BJERGASyngenta's pretty strong. You know, they're a European company so they have a little bit different distribution marketing chain than Monsanto and that would be a very attractive property to them.

  • 10:14:17

    REHMSo what have been the trend in the cost of seeds and pesticides in the last decade or so?

  • 10:14:27

    BJERGAWell, what you've seen, especially with increased adoption of biotech products, you've seen prices, especially in the seed sector, go up a lot. Pesticides somewhat, maybe about 11 percent over the last decade or so. In some places, you've seen seed costs as much as triple for farmers. Now, of course, what they're getting for that is a product that serves some of their needs.

  • 10:14:47

    BJERGAYou know, Roundup Ready has certainly made things a lot easier for a lot of farmers to apply and in some of these innovations in fighting pests and drought-resistance, other traits have been very helpful for farmers so they've paid the extra money. But it is becoming more expensive and it's that sort of competition that when you see a consolidation, a lot of farmers will get concerned that that could lead to prices to go up further.

  • 10:15:08

    REHMSo what would be lost if the two companies combine?

  • 10:15:15

    BJERGAWell, it would depend on what a final deal would look like. You know, Monsanto is very aware of antitrust and regulatory concerns so they have -- talking about divesting some of that, so the pesticide chemicals and some of the -- and the seed divisions from Syngenta. Those are some large portions for other companies to look for as well.

  • 10:15:37

    BJERGAI mean, at the end of the day, what you see is one of the competitors going away. Monsanto/Syngenta, the two will become one under whatever name they decided to have and that leads to one less big player in a consolidating global marketplace.

  • 10:15:50

    REHMAlan Bjerga, he is a reporter for Bloomberg News. Turning to you, Diana Moss, as president of the American Antitrust Institute. What are the legal challenges the merger would face if it were to go through?

  • 10:16:13

    MOSSYes. Thanks, Diane, and thanks again for having me on. It's a real pleasure and an honor to be part of this discussion. So this deal, as it's been proposed, would be, you know, one in longer string of acquisitions that Monsanto has made over the last, you know, 20-some odd years. We have a space here in ag-biotech in chemicals, traits and seed that has undergone significant and rapid consolidation.

  • 10:16:45

    MOSSLots of vertical integration where firms own different levels in the supply chain, chemicals, traits and seed, in this particular case. The antitrust agencies are gonna take a very skeptical, very, very close look at this as they have in past deals. And I think it's particularly important to note that this deal is occurring sort of at the peak of our current merger wave and we've seen other very large deals in the economy either abandoned or challenged by the agencies and not go through.

  • 10:17:21

    MOSSAnd I think that backdrop is a very important one to consider in the context of this merger where we see tremendous amounts of consolidation in key sectors and certainly in agriculture and food, that's one of our very, very important sectors. The food supply chain is critical, obviously. And so this, you know, this may be part of that broader pattern. But I think, specifically, what the agencies are going to look at is this merger as what we call a vertical merger.

  • 10:17:50

    MOSSIt's going to put together an enormous platform of chemicals, traits, genetic traits for insect resistance, herbicide tolerance and drought resistance, along with a big seed portfolio.

  • 10:18:07

    REHMDiana Moss, she's with the American Antitrust Institute. Short break. When we come back, we'll talk about farmers' concerns. Stay with us.

  • 10:20:02

    REHMAnd welcome back. We're talking about a proposed merger between Monsanto and Syngenta and whether that goes through, what the repercussions would actually be, whether it would be challenged by antitrust laws, whether farmers would object. We'll take up a lot of those issues. Here in the studio, Alan Bjerga. He's a reporter for Bloomberg News, focused on agricultural policy and commodities. From Radio Station W -- sorry, KWMU in St. Louis, Mo., Scott Partridge. He's vice president of Monsanto. And Diana Moss is president of the American Antitrust Institute.

  • 10:21:06

    REHMAlan Bjerga, if this should go through -- well, let's not even talk about if it should go through. Why are farmers concerned about this possible merger?

  • 10:21:20

    BJERGAWell, farmers are -- farming is a unique occupation in that you're always selling your product at wholesale prices and you're buying at retail prices. And those retail prices have been going up in recent years. Consolidation and lack of competition, classical economics will tell you, is a pressure that can allow a company to have more market power and raise prices. Farmers like to have choice. This could potentially lead to fewer choices, thus concern.

  • 10:21:43

    REHMSo seed prices could go up?

  • 10:21:47

    BJERGAOf course, if you are divesting of Syngenta's seed division, theoretically it will go to someone else. But that's still going to be one less player. And with research and development costs for biotech seeds being what they are, it's harder and harder for new entrants to make it into the business. So you've seen a huge consolidation really going back to the '90s, when Monsanto started buying up so many seed companies to begin with, that you now really only have a few players working in a few regions. And that encourages monoculture, that encourages a lack of diversity and that makes farmers worried about what a new landscape could look like.

  • 10:22:20

    REHMWe have a question here, Scott, from Brandon. He's at Texas A&M Junior Agricultural Sciences and Technology. He says, "What is Monsanto doing to encourage sustainable agriculture practices?" He says, "There's going to be a global shift toward local farming. But is Monsanto willing to help that movement along rather than hinder it for profit?"

  • 10:22:57

    PARTRIDGEYep. Absolutely, Diane. Great question. Thank you. Thank you very much. One of the benefits of this combination will be, it will give us the ability to reach more farmers, and that includes the small holder as well as the larger farmers here in America. You know, the support that we've given through stewardship, through making sure that the products that are brought to the marketplace are the best they possibly can be and to steward those products properly all the way through the farmers' experience with those products by -- it's just...

  • 10:23:32

    REHMAll right. So let me ask Diana, why do you think farmers are so concerned about this potential deal?

  • 10:23:41

    MOSSI think farmers are concerned because they have paid higher and higher and higher prices for traded seed and for chemicals over the past several years. I mean, there are many, many indicators now that indicate that innovation is slowing in the -- in this domain. A lot of indicators show that the rate of innovation is falling off, that higher levels of concentration through merger are not producing higher levels of innovation, that yields are not increasing at the rate that they used to. All of these are very, very troubling indicators that further consolidation and integration in this industry are not actually producing benefits for farmers and are, in fact, reducing choice.

  • 10:24:32

    MOSSAnd, you know, as I noted earlier, when the DOJ takes a very close look at this deal, they're going to see a very large, powerfully vertically-integrated platform of chemicals, traits and seeds that will all be orchestrated to work together, that will be presented to the farmer in a very expensive package, where other rivals potentially cannot interoperate with Monsanto's chemicals, traits and seeds, and that no other company in this domain, in this market space, can compete with head-to-head on the level that Monsanto is going to -- is going to present itself after this merger.

  • 10:25:16

    MOSSSo the merger enhances Monsanto's market power tremendously in the creation of this big vertical chemicals, traits and seeds platform.

  • 10:25:24

    REHMAll right, and Scott Partridge...

  • 10:25:25

    PARTRIDGEDiane, may I?

  • 10:25:27

    REHMSure.

  • 10:25:27

    PARTRIDGEYeah, may I -- yeah, may I jump in here?

  • 10:25:28

    REHMSure.

  • 10:25:29

    PARTRIDGEThere are some places that I agree with Diana but some critical areas that I disagree. I certainly do agree that the antitrust agencies are going to examine this transaction if it goes forward. And we have tremendous confidence in the thorough job they will do. We have planned this combination of our two companies to make sure that we divest all overlapping products. There is a corn, a soybean and a vegetable business that Syngenta has that, when we purchase the company, we will divest those assets as well as any chemistry overlaps. And we're going to do that because we think it's critical that the choices that farmers have today, they will have tomorrow, after this combination takes place.

  • 10:26:18

    PARTRIDGEThe antitrust regulators, the Department of Justice, who will likely review this, they will ensure that those divested assets end up in the hands of a company that will be at least as competitive as Syngenta has been. So I agree with Diana, this will be looked at and we welcome that opportunity to work with regulators to ensure the competition remains robust. Also...

  • 10:26:40

    REHMAll right. Diana wants to respond.

  • 10:26:43

    MOSSYes. Thank you. So let me just clarify a couple of points, which I think are really, really important for the public to understand here. First of all, this merger is presented -- been presented optically as a horizontal merger. And it's not. This is not a horizontal merger. Monsanto is promising to divest traits assets, seed assets and any overlapping chemical assets. One big question that comes up, of course, is who's going to buy those assets? When you have so few competitors in this space to begin with, who are those going to go to that will create or restore the competition that's lost by the merger? That's a big question.

  • 10:27:20

    REHMCan you answer that, Scott?

  • 10:27:23

    PARTRIDGEI -- well, I'm not -- yeah, Diane, I'm not going to give you a list of all of the people who have called us, the companies globally, some very, very substantial who already are active in this space, some who would be new entrants into the space. But I can assure you there is tremendous interest in the assets we would divest from Syngenta.

  • 10:27:43

    REHMAll right, Scott.

  • 10:27:44

    MOSSBut I also think that, you know, the DOJ's jurisdiction is over the United States and competition in the United States and consumers in the United States. You can talk about global competition but as far as DOJ's antitrust review goes, that is -- their concern is competition in the United States. And aside from all of these divestitures, the way the DOJ will look at this -- and nobody is talking about this aspect of the merger -- is, in fact, the creation of a large vertical platform. The chemicals portion of this portfolio coming in from Syngenta, coupled with Monsanto's traits and seeds, greatly enhances Monsanto's market power to foreclose rivals and to limit competition even more. And that's what farmers are going to scream about.

  • 10:28:34

    REHMAll right. Scott, do you want to answer?

  • 10:28:35

    PARTRIDGEYeah, Diane, there are -- yeah, there are agencies similar -- I don't know, I imagine Diana knows of them -- there are agencies that are similar to the Department of Justice all around the world. And we will be in front of those competition agencies to make sure that they look at this deal and see that it is pro-competitive coming out of this.

  • 10:28:56

    REHMAll right.

  • 10:28:56

    PARTRIDGEAlso, we don't foreclose -- please, we don't foreclose competition. We don't create barriers to entry. What we do is create choice. And farmers make choices every single year. And if we don't earn their trust every single year, they will choose someone else.

  • 10:29:11

    REHMAll right.

  • 10:29:11

    PARTRIDGEThere's not a place where we have a monopoly.

  • 10:29:13

    REHMOkay. If I could ask you this question, Scott. I gather, if the deal goes through, Monsanto and Syngenta together would hold 42 percent of the North American pesticide market, 28 percent in Latin America, 25 percent in Europe and the Middle East. Those sound like pretty big figures to me.

  • 10:29:45

    PARTRIDGEWith divestitures, Diane, those numbers go down and they fluctuate every year.

  • 10:29:52

    REHMOkay.

  • 10:29:52

    PARTRIDGEAgain, the farmers have a choice every single year of what to buy. And if we're not providing them value, they're going to choose someone else.

  • 10:30:02

    REHMNow, what about the farmers, who really are very concerned about this, saying that they believe their payments for various seeds and pesticides would go up?

  • 10:30:24

    PARTRIDGEDiane, I think the -- with the divesting of assets, the farmers -- the choice they have today will be the choice they have tomorrow. And if we do what we're going to work really hard to do, which is to accelerate innovation, we believe that that is going to create more competitive pressure for the other companies that work in this space -- and that's DuPont, who's much larger than we are, Dow, BASF, Bayer, much, much larger, two companies based in Germany -- we believe that our effort and our success, historically, in creating innovation and putting new tools in the hands of farmers, has caused those other companies to step up their game. We lead the industry in research and development and we intend to continue to do that.

  • 10:31:11

    PARTRIDGEAnd the only way we succeed, Diane, is if we give farmers better tools and they choose our tools every single year.

  • 10:31:16

    REHMAll right. One more question and then we'll open the phones. Scott, some say that this deal, if it goes through, should not be approved because it would enable Monsanto to move its headquarters out of the U.S. and therefore mean a loss of U.S. tax revenue. Is that the plan?

  • 10:31:45

    PARTRIDGENo, that's not the plan. The -- what you've seen is some indication that we would be willing to talk to Syngenta -- and this was one of their requests early on -- of a neutral location to be the headquarters for Europe or Europe, Mid-East and Africa. That's something we have talked to them about. That's something we would consider. But this company is -- we're based in St. Louis. And operationally this company is committed to being based in St. Louis. We intend to grow jobs in St. Louis. Whether there is a new domicile for the company, that would be a matter to be discussed. But that's not what's driving this deal.

  • 10:32:22

    REHMAll right.

  • 10:32:22

    PARTRIDGEThat's not the basis of this.

  • 10:32:24

    REHMAnd, Alan, earlier you said to me, when I asked you how likely it was that this deal would go through, you said, until a day or so ago, you thought it would. Now?

  • 10:32:39

    BJERGAWell, at this point, I think it's gotten a little bit cloudier with the rejection of the second offer by Syngenta. I know that it's Monsanto's position, of course, that they feel that their offer is good. But there's a lot of feeling among shareholders that really you should be getting into the 500 franc range rather than the 449 range for that. Also, there's a breakup fee that's about 10 percent of the cost of the merger. A lot of companies have done mergers that have been in the 10- to 20-percent breakup fee, which is important, because that's insurance if the whole merger falls through, with regulators.

  • 10:33:09

    REHMAnd what about the inversions?

  • 10:33:11

    BJERGAAnd that's where this risk comes in. Because inversions are a very hot political issue right now. You see members of Congress talking about how this is a big chance to cut down your U.S. tax bill. Monsanto is catching a lot of flack on that. And of course, the Department of Justice is one area, but these are global companies with a lot of regulators. And there are a lot of potential snags for this deal. So, I mean, of course, people are expecting -- with Scott's comments were not withstanding -- another offer. But how that plays out is really unclear right now.

  • 10:33:40

    REHMAnd you're listening to "The Diane Rehm Show." We're going to open the phones now. 800-433-8850. First, to John in St. Louis, Mo. You're on the air.

  • 10:33:59

    JOHNHi. Thank you. In St. Louis, we lost a lot of jobs when Anheuser-Busch fused with InBev. We also lost a lot of jobs when Turner Communications moved their headquarters to Connecticut. Do we have any assurances that Monsanto's not going to move their headquarters from their Creve Coeur Center to the U.K., where they've been said -- where it's been said in the news media that it will be? Because I'm kind of sitting here in a city where all of its major companies are moving out to other places. And it seems to me that this is about taxes and not about the community. Because we have signs all around town that says, Monsanto, Proud to be St. Louis Grown. And I just want to know if those are empty words or not. I'll take my answer off the phone. Thank you.

  • 10:34:41

    REHMAll right. Scott?

  • 10:34:43

    PARTRIDGEYeah. John, thank you for the question. And that's a great question. And, you know, Diane, this is the first time that we've talked on either radio or television about this transaction. And I'm proud to be doing it from your station here in St. Louis. And let me state this unequivocally. We're going to increase jobs in St. Louis. We have committed and we're already on the way to expand, out in Chesterfield, our labs. I'm pleased to announce today, we've actually applied for zoning changes out in Chesterfield to add more lab space, more office space and more jobs. So what I'm telling all of you in St. Louis today is we're going to have more jobs here in St. Louis, not less. This is a St. Louis company.

  • 10:35:20

    REHMYou're not quite answering the question though, Scott. Are you staying, basically, in St. Louis and not moving to the U.K.?

  • 10:35:37

    PARTRIDGEWe're staying in St. Louis, Diane. Yes. If there's an opportunity to create an office that would manage operations in Europe, Mid-East Africa, similar to what we have today -- I think we have over 40 sites around the world -- so we will have different offices in different places. Whether there ends up being a re-domicile of the company is a function of negotiation. But what I can tell people in St. Louis, tell all of our employees and the people who would like to work at Monsanto in St. Louis, we're going to be creating more jobs here. That's a commitment.

  • 10:36:08

    REHMAlan.

  • 10:36:09

    BJERGAI'm sure a lot of listeners in a lot of different cities can all relate to what have happened with corporate headquarters in their own domiciles. And in fairness to Monsanto, a relocation to another city isn't necessarily about inversions or tax revenues as well. When you become a large global powerhouse, there is sometimes an advantage to having a different vantage point that's not so connected to any particular set of operations to help you make more equitable decision making. A classic example of that would be when The Boeing Corporation moved its headquarters from Seattle to Chicago about a decade and a half ago. A lot of concerns in Seattle that that was going to mean a loss of identity and possibly a loss of jobs.

  • 10:36:47

    BJERGABoeing remains in Seattle but it certainly has a more global outlook and makes its decisions and some folks -- I was a reporter in Wichita, Kan., for a while, which saw some real turmoil with Boeing out there, a major Boeing center as well. St. Louis, after the McDonald-Douglass merger with Boeing, saw some losses of jobs in the St. Louis area, with that change there, they lost their headquarters to, first, Seattle and then later Chicago. So over time, it plays out. It's not necessarily about inversions. But it can be about identity and corporate decision making. And a person in St. Louis would have very rational reasons for being concerned.

  • 10:37:22

    REHMAll right. Short break here. When we come back, more of your calls, your comments. I look forward to speaking with you.

  • 10:40:00

    REHMAnd welcome back. We're talking about Monsanto's efforts to acquire the Swiss firm of Syngenta, one of its competitors. It has offered something like $45 billion. Whether there will be another offer or more negotiation on that remains to be seen. One of our guests, who is with us, Diana Moss of the American Antitrust Institute, believes there will be a lot of careful oversight if this merger does come about.

  • 10:40:53

    REHMAll right, I promised to go back to the phones. Let's go to Baton Rouge, Louisiana. Tyler, you're on the air.

  • 10:41:01

    TYLERThank you so much for having me again. I've got in, like, in the past two months. I feel really excited about this.

  • 10:41:08

    REHMGood.

  • 10:41:09

    TYLERI had a quick question for the Monsanto man. It just seems that in your earlier speech, when you started off on this program, you talked about sustainability, but as a horticulture student, who graduated and has a degree in it, I'm curious as to those death seeds that you have that automatically die and won't produce more seeds on the next crop. And I was wondering how sustainable that really is for the farmers, when they can't collect their own seeds again.

  • 10:41:33

    PARTRIDGEYeah, Tyler, thank you for what you do for agriculture. There are no such thing as death seeds.

  • 10:41:37

    REHMThank you.

  • 10:41:39

    PARTRIDGEThat's a myth.

  • 10:41:41

    REHMYeah, sounds that way, and let's go to David in Naples, Florida. You're on the air. David?

  • 10:41:52

    DAVIDDiane?

  • 10:41:53

    REHMYes.

  • 10:41:55

    DAVIDMy question is basically what is the gentleman from Monsanto, what is his definition of a farmer today, and what is going to be the environmental impact of this kind of a merger? The United States has already become sort of an agricultural factory for the world, and my concern is that eventually we're going to burn ourselves out, exhaust our resources. It takes 100 years to make an inch of topsoil, and if we contaminate it by trying to increase our productivity, what is going to be the impact of all that on this country and upon the individuals?

  • 10:42:50

    DAVIDFarmAid, back when Reagan was in office, obliterated a lot of family farms when they were sort of put on a bait-and-switch program and overextended themselves.

  • 10:43:03

    REHMAll right, Scott?

  • 10:43:04

    PARTRIDGEYes, Diane, thank you, and thank you for the question. I share your concern very, very deeply about the environment, and it's one of the reasons that we have led this entire industry in bringing the concept of precision agriculture, to put that in farmers' hands. The goal that we have, and this is being enabled by us through our acquisition of the Climate Corporation, out in California, is to actually create data-driven decision processes for farmers.

  • 10:43:36

    PARTRIDGEWhat we want to see farmers do, and what we're going to help them do, I promise, is we're going to help them make better choices from all of the selections they have out there offered by all of the different companies so they can produce more crops with fewer inputs, and that's reducing pesticides, reducing nitrogen and reducing, ultimately, reducing the water that's used to grow crops. So that's the future of farming. It is digital, and it is involved -- it involves the precision application of less stuff to make more food.

  • 10:44:10

    REHMDiana?

  • 10:44:12

    MOSSYes, thanks, Diane. I just want to jump in on this issue because this question from the gentleman in Florida I think is a very important one. Part of what's driving, in my view, part of what's driving this deal with Monsanto and Syngenta, is in fact to combat a lot of maturing markets and regulatory hurdles and battles but also the fact that it is becoming harder, through insect resistance and herbicide tolerance, to combat some of the pests and the weeds that are, you know, a fact of life in crop growing.

  • 10:44:55

    MOSSSo, you know, what we're looking at now are very complex products with what we call stacked traits, multiple traits to combat weeds and pests, and it's an uphill battle. And this is becoming a very expensive, very complex technology. Part of the motivation for the merger is to bring in the chemicals, the traits and the seeds in one very integrated platform, and a platform that large is necessarily going to challenge the ability of smaller food systems and conventional technologies and even organic technologies to compete in this space.

  • 10:45:29

    MOSSAnd, you know, this is symptomatic of our larger food supply chain, where large industrial food systems, because of consolidation and integration, are squeezing out smaller food systems, alternative food systems, that provide viable choices, potentially viable choices to consumers.

  • 10:45:49

    REHMAlan?

  • 10:45:49

    BJERGAWell, what's interesting in some of the responses and from some of the questions we're getting from the callers, and I'm sure we'll get more, as someone who covers agriculture, I'm hearing these various shades of argument all the time. You hear really sort of two world views that sometimes talk past one another, and one world view, you'll hear sustainability talked about a lot, which often means smaller, more local, more diverse systems, fewer inputs, less of a reliance on technology, more natural processes.

  • 10:46:16

    BJERGAWhat you'll often hear from larger agricultural concerns, high-technology concerns, is sort of -- you'll hear the term sustainable intensification, which is the idea that if we really want to sustain our population growth and be able to feed people, you need investments in technology that can actually get - you'll hear a phrase like more crop per drop, the idea that your productivity on ever-stressed land can actually be done more effectively and, in the end, with fewer chemical inputs if you have biotechnology that can solve some of these scientific problems.

  • 10:46:50

    REHMHowever, here is an email from Drew in Bailey, Michigan. He says the number one problem with this potential purpose is the issue of food sovereignty. When communities, especially in developing nations, lose control of their seed sources, they lose control of everything and become dependent on chemicals and equipment they did not require previously. Just look at the farmer suicides in India. Also, what is the perspective in the EU regarding this? Do they have any say? Do you want to take the first part of that, Diana, on food sovereignty?

  • 10:47:44

    MOSSSure. I think food sovereignty is important. I think for the U.S., which is an enormous agricultural producer, food sovereignty is particularly important. I would put food right up there with national security. The stability and safety of our food supply chain, our ability to control our inputs and protect our food system against potential acts of bioterrorism, those are all key public policy goals, I think that link up very importantly with competition policy.

  • 10:48:15

    MOSSAnd I think the most important thing is that choice be available not only to farmers and what they can choose in terms of chemicals, seeds and traits, but also to consumers in how they consume, what types of food systems they consume. And the only way you get that is through competition. You don't get choice and sovereignty and safety and stability of our food supply chain when you don't have lots of competition in the food space. And this merger in particular stands to really restrict, further, competition in our food space, which is already, you know, dominated by just a few players and one very large dominant player, Monsanto.

  • 10:49:00

    REHMAll right. I don't want to overlook the last sentence there. Farmer suicides in India, Alan?

  • 10:49:13

    BJERGAThere have been farmer suicides in India dealing with a lot of economic dislocations, a lot of issues on the land. This of course was the breadbasket of the green revolution, where you saw some huge dislocations and consolidations within agriculture. This has been a story in agriculture for, also, generations. Countries urbanize. As countries develop, there can be dislocation. There are a lot of factors behind the farmer suicides in India. I've seen a lot of things laid at Monsanto's doorstep by groups that will criticize Monsanto. It's an awfully complex issue to imply that one company is behind that.

  • 10:49:48

    REHMAnd what about the EU? What is the perspective of the EU?

  • 10:49:53

    BJERGAWell, the European Union is in a really interesting situation because, you know, right now the United States is negotiating a trade agreement with it, and biotech crops are actually a huge hang-up within that. At the same time that American agribusiness and global agribusinesses would really like to see a more even playing field for acceptance of biotech crops, you actually see the EU proposing giving countries more flexibility to opt out of GMO production and use of GMO imports and feed products.

  • 10:50:23

    BJERGASo this is a very unsettled issue. Syngenta, a European country, it's a myth that GMOs and biotech are not accepted in Europe, but there is a greater wariness that could lead to a complication of this deal with regulators over there.

  • 10:50:36

    PARTRIDGEDiane, could I...

  • 10:50:37

    REHMAll right, to Phil in Hebron, Illinois, you're on the air. Phil, you're on the air. No, I guess it's Jarrod in Dallas, Texas. Hi, you're on the air.

  • 10:50:53

    JARRODHi. Hey, Diane, and I just want to say I'm so glad that you have such an intelligent listener base because I would have to say it feels like you all dropped the ball on having an appropriate adversary to the Monsanto man there to represent those, like Alan mentioned, that believe in the sustainability, grassroots, local farming and organic farming. But anyway, to my point, I'm a professional pest control applicator, and I use a termiticide created by -- I can never say their name right. Can you say it for me?

  • 10:51:25

    REHMI can't say it.

  • 10:51:27

    JARRODSyngenta, the company that we're talking about.

  • 10:51:32

    REHMOh, you're talking about Monsanto and Syngenta.

  • 10:51:35

    JARRODSyngenta, I can never say that name right.

  • 10:51:37

    REHMOkay, all right.

  • 10:51:37

    JARRODYeah, I use a termiticide created by Syngenta, and my demographic, other than that product use natural pest control, and that's, I describe to my customers, as the lesser of two evils because there's not currently a effective termiticide that's naturally based that I have available.

  • 10:51:57

    REHMOkay.

  • 10:51:59

    JARRODThere is a fungus that a TED Talk explained that would do the job, but it would -- it's not applicable. But if I were to continue using that product after said merger, I'd have to mention that it's owned -- it's produced and owned by Monsanto, and that would literally cut my feet out from under me as far as my -- the opinion of me by my customers because they would not want to support that company, given the demographic I work in.

  • 10:52:23

    REHMAll right, all right.

  • 10:52:24

    JARRODAnd that's my comment is that it would cripple small businesses like mine to have that done.

  • 10:52:25

    REHMAll right, what do you say to that, Scott?

  • 10:52:28

    PARTRIDGEThat's all a factor -- a matter of choice, and, you know, we applaud that, you know, we applaud that the caller is making informed choices. You know, our job is to provide options, so those choices are out there, and he'll choose what's best for him and his customers.

  • 10:52:49

    REHMBut at the same time, what he's saying is he's going to lose customers because Monsanto has developed a reputation, maybe unwarranted but nevertheless, in the population of his customers that it doesn't -- those folks don't want to have anything to do with Monsanto products.

  • 10:53:19

    PARTRIDGEAnd Diane, I understand your point, and I'll tell you, I'm proud of this company. There are 23,000 people who I work with. A lot of them are men and women that grew up as boys and girls on farms, getting up early, working real hard, and we've got a bunch of really smart scientists here, trying to bring new innovation to an industry that we have led in innovation. And I know we're often misunderstood, and we just need to work a lot harder so people really understand who this company is and what this company's done over the last 15 years, when we were first launched.

  • 10:53:48

    REHMFair enough.

  • 10:53:51

    PARTRIDGEAnd that's our responsibility. And I can tell you, we're going to work really, really hard to earn every farmer's business. We hope they choose us every year.

  • 10:53:59

    REHMOkay, and you're listening to the Diane Rehm Show. Let's go now to Brighton in Cincinnati, Ohio. You're on the air.

  • 10:54:10

    BRIGHTONHi Diane, thank you for taking my call.

  • 10:54:12

    REHMSurely.

  • 10:54:13

    BRIGHTONAnd thanks for having such a great panel. I'm actually a permaculture teacher. I work with peasant farmers down in Haiti, in the mountains of Haiti, and it's interesting because it really exemplifies some of the acuteness that we're dealing with on the planet right now, of overpopulation, deforestation, ecological destruction, species extinction, relying on non-renewable resources like chemicals and pesticides and fossil fuels and all those scenarios.

  • 10:54:42

    BRIGHTONAnd, you know, I know that Monsanto is in sort of a difficult position because they're a for-profit corporation that is basically trying to develop a model that, you know, that will put money in the hands of the shareholders. And so I'm sort of curious on a two-fold front. You know, maybe Monsanto, rather than buying up Syngenta, might want to look into becoming a B-corporation, where their profits can be seen as -- it's a model that's been developed out in California, where their profits can be seen as benefits to community or benefits to the environment rather than just straight dollars.

  • 10:55:21

    BRIGHTONAnd the other thing, too, is looking beyond just the mono-cropping scenario, Understanding how nature has created resiliency for 2 billion years and how traditional cultures have actually been able to create regenerative and resilient agriculture and agroforestry systems, as exemplified in the Amazon or a lot of other recent anthropological findings.

  • 10:55:46

    REHMAll right, and let's give Scott a chance to respond.

  • 10:55:52

    PARTRIDGEYeah, I don't -- Diane, I'm really not familiar with what a B-corporation is or a B-company is.

  • 10:56:02

    REHMAlan?

  • 10:56:02

    BJERGAI think he might be talking about a for-benefit corporation, the idea that social gains are part of the balance sheet, as well as simple profits.

  • 10:56:11

    PARTRIDGEYeah, and certainly, you know, I believe that we do a tremendous amount to support society. The primary goal that we have set for ourselves is a societal goal. I can't think of a better goal than trying to feed the population that's going to put 2 billion more people on this planet by the time my kids are adults. I just, you know, when I think what some companies are committed to do in different industries and different spaces, I'm really proud to wake up every morning and know that what I'm doing is trying to feed a growing population of hungry folks.

  • 10:56:44

    PARTRIDGEAnd if you look, if you look at the three and a half billion acres that are farmed around the globe, and this is a bit of what I think is misunderstood, only 400 to 500 million of those acres actually have advanced agricultural techniques, biotech, on them. It's less than 20 percent of that acreage.

  • 10:57:01

    REHMAll right.

  • 10:57:03

    PARTRIDGEThere are so many farmers around the world, Diane, who need better tools just to feed their families, and that's a big part of what we want to do.

  • 10:57:07

    REHMAll right, and we'll have to end it right there. Scott Partridge of Monsanto, Diana Moss of the American Antitrust Institute and Alan Bjerga of Bloomberg News. Obviously this one is going to continue. Thanks so much for listening. I'm Diane Rehm.

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