Bigger is Not Always Better: Drivers and Implications of the Recent Agribusiness Megamergers
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Abstract: The global agrifood industry is undergoing profound upheaval, with a spate of mergers, acquisitions and deals that are consolidating the sector. The mergers announced in 2015 and 2016, for example -- including Dow and Dupont, ChemChina and Syngenta, and Bayer and Monsanto -- are poised to change the face of the agricultural inputs sector. This paper examines the political and economic dynamics surrounding these large transnational agribusiness megamergers and reflects on the broader implications of these deals for global environmental and food politics. The paper advances two arguments. First, it makes the case that the current wave of mergers is in some ways similar to past waves of consolidation in the sector, but also different in important ways. Past mergers in the sector were driven largely by technological innovation and integration along with strengthened intellectual property protection. Further technological innovation and integration remains important for today’s mergers, but it is not the only driver. The current mergers are also deeply shaped by increased financialization in the agrifood sector that has prioritized investor demands for profits in ways that encourage corporate consolidation. Second, the paper argues that past episodes of consolidation in the sector had important implications for questions of economic fairness, farmer autonomy, environmental sustainability and political power, and that the proposed mergers are likely to result in even more pronounced effects on these fronts. Yet while these concerns are wide-ranging, the evaluation measures used by regulatory bodies to assess the impacts of the mergers only partially capture the ways in which they affect economic fairness, and say little on questions of environmental impact, farmer autonomy, and power inequities.
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