OCM Supports State Attorney Generals Investigating Monsanto

The Organization for Competitive Markets and more than 35 farm and citizen groups voiced support for an ongoing antitrust investigation into Monsanto’s suspected anticompetitive practices in the U.S. crop seed industry last week in letters sent to 23 state attorneys general. About a dozen states are already involved in the investigation, including the attorneys general in Iowa and Texas.

“Concentration of market power in the seed industry has grave implications for American farmers,” said Keith Mudd, President of OCM. “Monsanto continues to control the marketplace in seed technologies, especially the corn, soybean, and cotton sectors.”

“We believe the company uses transgenic trait licensing agreements with independent seed companies as a tool to put smaller seed companies at a competitive disadvantage,” continued Mudd. “As a result, farmers and smaller seed companies face higher prices, fewer choices and less innovation in the crop seed marketplace. These companies need access to technology, but under fair and equitable terms.”

The Organization for Competitive Markets (OCM) was joined by the American Corn Growers Association, National Farmers Organization, 10 state Farmers Unions, and dozens of others as signatories on the attorneys general letters.

The price for transgenic seed and glyphosate has skyrocketed, taking millions of dollars from farmers and rural America. Monsanto, however, is making record profits. “Farmers are already struggling with rising fuel and chemical prices, as well as planting problems,” Mudd added. “And now they must contend with higher prices for crop seed with less choice in the market.”

Monsanto maintains a dominant position in the marketplace by acquiring smaller competitors and merging with other companies. Last year, the Department of Justice agreed to allow Monsanto to acquire Delta & Pine Land Company, giving it a 90 percent share of the transgenic cotton seed market.

The company also enters into restrictive licensing agreements with seed dealers that are designed to gain market power, restrict competition, and prevent future innovation and market access by competitors.

“Independent seed companies are essential distribution channels for seed technologies, making up more than a quarter of the market,” said Fred Stokes, OCM’s Executive Director. “We believe Monsanto’s licensing agreements prohibit stacking its transgenic traits with non-Monsanto traits without any scientific reason. Farmers who prefer regional seed companies and their locally adapted varieties can’t access non-Monsanto traits restricted under these contracts. ”

Monsanto is also known to aggressively enforce its licensing agreements through lawsuits that seek to protect its patent rights. At times Monsanto mistakenly targets innocent farmers who undergo undue financial and emotional stress in their effort to avoid costly lawsuits. “Monsanto’s behavior has dramatically altered our rural communities,” Stokes said.

“We hope the state attorneys general will aggressively press this investigation. Control of crop seed must be diverse. This issue is of fundamental importance to the future of American agriculture,” Mudd said. “Farmers and independent seed companies deserve an open and fair seed marketplace. Consumers should not have to shoulder any further increase in food prices.”