Concentration in Seed and Biotech Markets: Extent, Causes, and Impacts

Abstract

The merger of Dow and DuPont, the acquisition of Syngenta by ChemChina, and the acquisition of Monsanto by Bayer have recently reshaped the global seed and biotech industry and caused concern about growing market concentration. This review documents market concentration in seed and agricultural biotech markets and discusses its causes and impacts. The available evidence suggests that concentration in seed markets varies strongly by crop and by country, while markets for biotech traits are considerably more concentrated. Complementarities between seed, biotech, and crop protection chemicals explain much of the observed structural changes in the industry, and new complementarities may be emerging with digital agriculture. Although growing concentration might in theory lead to higher prices and less innovation, evidence on this is currently limited; this tendency is also in part offset by the remedies imposed by competition authorities. Expected final online publication date for the Annual Review of Resource Economics, Volume 12 is October 5, 2020. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

The problem with growing corporate concentration and power in the global food system

“…In 2018, after the most recent mergers, the top four firms controlled even more of the market-around 70% of the global pesticides market 12 and around 60% of the global seed market 13 . Some analysts warn against reading too much into these aggregate global market share figures regarding concentration levels because there are differences in specific crop seed market shares at the domestic level 14 . However, even those data show that in many domestic markets, just a few firms dominate sales of key staple crop seeds in a wide range of countries, in many cases with market shares above 80%, including the USA, the UK, Turkey, South Africa, Thailand, Italy, Denmark, Indonesia and Brazil.…”

“…A key question for regulators is to tease out which force is likely to prevail, if any. Untangling the implications of these competing dynamics for innovation in the seed and agrochemical sector is not an easy task 14 .…”

The organizational choice of technology transfer mode: Theory and application to the genetically modified plant industry

“…Finally, though the present model can been used to explain the international strategies of Monsanto, it can also give some insights on the evolution of the GMO market in the United States, as documented by various authors (Deconinck, 2020; Fulton & Giannakas, 2001a; Oehmke & Naseem, 2016). During the 1980s, licenses and JVs were the most preferred form of collaboration between agrochemical firms, biotech firms, and seed firms.…”

“…Agbiotechnology has revolutionized the seeds sector with the creation of transgenic seeds with specific properties (Deconinck, 2020). A transgenic plant is a typical example of an upstream innovation that requires collaboration between the innovator and a downstream producer for successful commercialization.…”

From unfair prices to unfair trading practices: Political economy, value chains and 21st century agri‐food policy

“…This has occurred in OECD countries but also increasingly in emerging and developing countries, as reflected in the so‐called “supermarket revolution” (Reardon et al., 2003). While in the late 20th century discussions on problems of excessive concentration in food value chains were mostly about the dominant position of food processors, in the 21st century this has shifted to implications of concentration in input markets and retail (Deconinck, 2020; Swinnen & Vandeplas, 2010).…”