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Why Bayer buying Monsanto makes sense for agriculture
Jun. 7, 2016
Bayer's $62 billion proposed takeover of Monsanto is being evaluated so far based on its price, its affordability, and Bayer's strategy.
So far it is being seen in relation to the market Monsanto serves, genetically engineered seed and transgenic science.
Environmentalists are gearing up to fight the merger because they know the real story. Bayer is a European company, and Europe is historically opposed to genetic engineering, especially when applied to agriculture. But if the merger goes forward, Europe will be the home of the dominant player in that market. Monsanto would replace the loss of Syngenta, which is being acquired by a Chinese company.
Engineered seed is used almost exclusively in the U.S., where it allows food crops to be farmed reliably, even without tilling the soil, and it is sought-after by the developing world, which needs innovative seed in order to feed people. It is fought bitterly in Europe, where activists have demanded the genetic modification case be proven before the market is allowed to develop.
Under Bayer, this would have to change. The merger is predicated on the idea that it will change, that Europe will be forced to accept genetically modified crops when the EC economy becomes dependent on the technology. Otherwise Monsanto would be worthless, and that would threaten Bayer's very existence.
But losing Monsanto could also have a big impact on the U.S. Here, intellectual property is seen here as the key asset. It's even more important than the actual sales of seed and product. Losing Monsanto would force the U.S. market to consider more open source solutions, in line with the desires of the developing world, or lose control of agriculture to the Europeans entirely.
A Bayer-owned Monsanto, in other words, could liberate U.S. players from their intellectual property straitjacket, and allow more direct cooperation with African and Latin American plant scientists, who need solutions geared to their conditions, where water is scarce and land abundant, and where intellectual property is cheap, rather than the U.S. where the reverse is true.
The result of losing Monsanto, in other words, would spur needed innovation while increasing acceptance of the science around the world, solving the industry's two biggest problems.
As Stewart Brand explained in his 2010 book Whole Earth Discipline, traditional agriculture is more disruptive, and more damaging to soils, than the creation of customized seeds. New strains created through cross-breeding tend to carry additional genetic codes that weaken strains, while those created directly through genetic engineering carry just the additional genes that are needed to improve crop quality.
There is nothing especially organic about a red delicious apple, or an ear of sweet corn. They are products of genetic engineering as surely as high-protein, flood-resistant rice is. The latter just delivers better nutrition, more reliable yields, and lower costs to the farmer, and the new genes are produced more efficiently.
In short, a Bayer purchase of Monsanto would likely end decades of argument, and spur new innovation in transgenic sciences in the U.S., which is what business and a hungry world most need.
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