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Seed company executives appear on Capitol Hill

U.S. Senators on Tuesday challenged executives from the world's largest seed companies to justify a wave of mergers, which some lawmakers said could lead to higher prices for farmers and consumers alike.

Senior officials from Monsanto Co., Bayer AG, DuPont Co. and Dow Chemical Co. said their combinations would yield higher-performing crops and more effective chemical sprays by integrating research and sharing regulatory costs. If successful, the mergers would shrink the seed and pesticide industry's top six global players to four companies.

"To me, it looks like this consolidation wave has become a tsunami," said Sen. Charles Grassley (R., Iowa), chairman of the Senate Judiciary Committee, who convened the hearing. "I'm concerned that further concentration in the industry will reduce choice and raise the price of chemicals and seed for farmers, which ultimately will affect choice and costs for consumers."

Sen. Amy Klobuchar (D., Minn.) warned that fusing companies with different specialties -- such as Bayer's focus on pesticides and Monsanto's deep portfolio of seed genetics and biotechnology capabilities -- could leave few avenues for upstarts to penetrate the research-intensive business. "It poses a question of whether some mergers are too big to fix," she said.

Seed and pesticide executives defended the deals as necessary to speed the development of new crops and chemicals that can take around a decade and hundreds of millions of dollars to bring to market.

Read more at nasdaq.com
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