Do not let private ownership ‘own the means of production,’ was what Karl Marx pleaded to the Russian people through his 1848 publication of the ‘The Communist Manifesto.’
One could only think of his reaction today, if he were to hear that two global giants of the farming and chemical industries, Monsanto and Bayer, are planning to merge in a deal reported to be worth $88b.
Both companies have outlined future plans for revolutionising the agriculture industry, in an attempt to keep up with an ever-increasing, global demand of food. This to be achieved through the increased use of pesticides and genetically modified seeds in lieu of conventional farming methods.
Money has been pouring in to the rapidly emerging industry dubbed ‘precision agriculture.’ This is the process of gathering massive amounts of weather and crop data from a farmer’s land, analysing the results and then on selling advice to the farmers. With the advice entailing what and when is the best seed and fertilizer to use, commonly the same company will own these products.
Monsanto and Bayer however are not the only major companies who can see a financial benefit of partnering with other major global companies. American companies Dow Chemical and DuPont Pioneer are in formal talks for a merger worth $176b, and Swiss based Syngenta is negotiating with the Chinese ChemChina in a deal reported to be worth $58b.
If all these deals were to be passed through the regulators the renowned Big Six would become the Big Three (industry insiders say a push for the Big Two wouldn’t be far behind). This would essentially create a duopoly of the agriculture industry, similar to what Coles and Woolworths has created at the consumer end.
At first glance the prospect of increasing crop yields for farmers — and in turn reducing the cost and increasing the availability of food — all in the grand plan of ‘feeding the world’s hungry’, sounds like a business plan I’d be willing to support.
However, as I am far from a staunch believer in the economic theories of Karl Marx, it all sounds a bit too good to be true — almost as if we are all being sold a handful of magic beans. Having only three, then possibly two companies controlling the production of world food, just doesn’t sit right. There is too much control and too much room for manipulation from global forces.
What if America declared a food war on China and banned all sales of seed to the country — what if they did it to Australia. This is the doomsday scenario that Marx was foreseeing, so I’ll leave it with this: “eaters of the world, unite!”
For further reading: