Bayer Beware - Monsanto Merger Moves Ahead

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Just yesterday, stockholders in the Monsanto Company approved a proposed merger with German chemical and medical behemoth Bayer, which has agreed to pay $66 billion dollars for the notorious agricultural empire.

The shareholders were correct: this buyout is definitely in the best interests of Monsanto. For years, the usurious limited-use license known as the MT/SA, which all growers of its seeds must sign, prohibits farmers from saving and replanting seed on their own property, a condition justified by a vague avouchment that "Monsanto Technologies are protected by U.S patent law." Even though the use of this provision has continued unchecked, it entirely ignores the luculent language of 35 U.S.C. §163. This statute provides that patents on asexually reproduced plants - a classification which clearly encompasses the synthetic breeds produced by Monsanto, such as a cross between corn and bacteria that could never sexually occur - secure "the right to exclude others from asexually reproducing the plant, and from using, offering for sale, or selling the plant so reproduced," but do not in any way curtail the traditional practice of saving seed. However, even though the deceptive implications contained in Monsanto's unconscionable contract have been the very foundation of the company's continued prosperity, it is nearly inevitable that this routine, positive fraud will be extinguished at some point.

Bayer, therefore, may have gotten more than it bargained for. Its complete acquisition of Monsanto cements its assumption of the rights and the duties contained in the MT/SA, as well as the responsibility for the Agreement's inherent defects. As the Restatement (Second) of Contracts states in §336(2):

"The right of an assignee is subject to any defense or claim of the obligor which accrues before the obligor receives notification of the assignment."

By taking on Monsanto's contracts with thousands of American farmers, it may have hoped to reap the revenues of its purchase's unlawful conduct; but will be liable for the vague and specious claims contained in these documents, and is independently answerable for all similar assertions made in contracts after the deal closes.

However, neither of these corporations will face the real consequences of Monsanto's actions or this buyout. It is U.S. farmers and consumers who will be most heavily impacted. This new, consolidated company would possess unprecedented control over both genetically engineered seed and the pesticides and weedkillers these plants have been fabricated to withstand. This heightened oligopoly will precipitate an artificial rise in the price of these agricultural commodities, costs that many small growers simply cannot afford when added to the prices of seed that must be repurchased every year. Either these farmers will be forced to sell their land, hastening the decline of the free agricultural market even further, or these new expenses will necessarily be passed on through the supply chain to the American consumer. Products we all use every day - from breakfast cereal to blue jeans - will rise in price as a result of this monopolistic merger.

The U.S. Department of Justice, the Federal Trade Commission, and the several states still possess the authority to challenge this merger as an unreasonable and impermissible restraint of trade. It is imperative that they do so, to protect truly free competition and preserve the possibility of small farming.

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This page contains a single entry by Katrianna Brisack published on December 15, 2016 12:42 PM.

Scott Pruitt's EPA: Don't Forget Our Rights was the previous entry in this blog.

Conscious Commitment: Free Competition and the Living Wage is the next entry in this blog.

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