Bayer-Monsanto Buyout: Dangerous Waste of $66B

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finalsign.jpgPost the premerger notice and let the bells ring. German pharmaceutical and pesticide titan Bayer and controversial seed giant Monsanto have finally tied the knot for $66 billion, in a deal complete with a $2 billion breakup fee owed to Monsanto if the deal is disallowed by the authorities. Not only is this deal a blatant attempt to monopolize the agricultural industry; upon closer scrutiny, Bayer may have dramatically overestimated the value of their newest purchase.

This buyout will be highly advantageous for Monsanto, which has routinely defrauded the growers of its genetically modified seeds for decades by vastly overstating its protections under U.S. patent law. The corporation speciously claims that patents on its asexually created plants forbid farmers from saving and replanting second-generation seed produced by a GMO plant, an assertion that clearly contradicts the unequivocal text of 35 U.S.C., Chapter 15. By using this deception to force farmers to repurchase seed every year, Monsanto has collected millions of dollars in unlawful profits - but, however lucrative that practice may prove at present, there remains the distinct possibility that regulators could at some point curtail such cozenage. By walking away with a cushion of some $66 billion dollars and handing Bayer the responsibility for this precarious operation, Monsanto's executives have ensured that they are never held accountable for their illegal restraint of trade.

Because of those legal uncertainties, this acquisition could prove to be a mixed bag for Bayer. The recently passed "Dark Act" overruled more comprehensive state-by-state GMO labeling laws that required notices to be placed physically on grocery packages, instead allowing manufacturers to obscure this information by posting it on websites or providing phone numbers consumers must call to learn the truth about their foods. This poorly veiled boost to the agribusiness industry is expected to increase the prevalence of GMO crops by making avoidance nearly impossible, and therefore would render Monsanto a desirable purchase. However, Monsanto's duplicity regarding its patents could prove to be more of a burden than a boon to Bayer if its claims are ever disputed. In addition, in an entirely separate controversy, an ongoing Justice Department suit against both Monsanto and John Deere over a partial merger of their machinery divisions (orchestrated prior to this buyout) could result in substantial penalties. Taking all these things into consideration, it is unlikely that Monsanto's products are worth the massive investment Bayer has just made in the company.

No matter what the outcome for the entities involved, one thing is clear: this merger will have a decidedly negative effect on American farmers and consumers. The two largest GMO seed companies are now both foreign-based: the Monsanto brand will now be German-held, and primary competitor Syngenta was recently purchased by ChemChina, a state-owned Chinese chemical developer. This could complicate an eventual challenge to Monsanto's interpretation of the patent laws by embrangling regulators or a class of growers in a drawn-out fight over the legitimacy of US jurisdiction; see World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), Asahi Metal Industry, Co., Ltd. v. Superior Court of California, 480 U.S. 102 (1987). In addition, the merger gives the new conglomerate unprecedented market power over the price of seed and the herbicides most GMO plants have been specifically engineered to withstand, costs that will further repress small farmers and will be passed on to the consumer through increases in the prices of basic necessities.

The premerger notification will soon be available for public comment, and it is imperative that anyone ever having grown staple crops, eaten corn, soy or sugar, or worn cotton clothing unite to stand up against this plainly wrongful attempt to restrain the free market. So speak now or forever hold your peace.

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This page contains a single entry by Katrianna Brisack published on September 16, 2016 8:08 PM.

Update: Monsanto Agrees to Disagree, Basically was the previous entry in this blog.

Hillary Clinton, Criminal Justice Reformist? - Not So Fast is the next entry in this blog.

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