The EC recently announced that it had cleared the deal ‘subject to conditions’ – namely, an extensive remedy package that involves Bayer divesting assets and both companies addressing overlaps in their products.

The move follows the approval of two other major agrochemical mergers: Dupont-Dow in the US and ChemChina-Syngenta in China. Together, these new companies look set to dominate the global agricultural chemicals, seeds and genetically modified food markets.

But some stakeholders – including farmers’ associations and non-governmental organisations – have warned against the consolidation of leading market players.

‘A very strong market concentration is reducing genetic diversity, choice for farmers and raising seed prices,’ says Monika Messmer, Chair of the European Consortium for Organic Plant Breeding and Head of Plant Breeding at the FiBL research institute. ‘Monopoly of the seed market threatens our food security, as large influence of a few market players can dictate what kind of agriculture we have in the future.’

The EC had raised concerns that the proposed Bayer-Monsanto merger could reduce competition, resulting in higher prices, lower quality, less choice and less innovation in digital agriculture.

But, following a six-month review, the Commission said its concerns had been met in full, providing Bayer divests assets, develops a competitive product to challenge Monsanto’s glyphosate – the most used pesticide worldwide – and ensures continued market competition by granting a licence to its ‘entire global digital agriculture product portfolio’.

According to media reports, the DoJ in the US has also agreed to the merger in principle. China’s Ministry of Commerce and Brazilian regulator CADE gave conditional approval earlier this year.

A spokesperson for Bayer told Global Insight: ‘[The merger] will have almost no impact on the relative concentration in this area. The antitrust authorities will see to that. We are selling our seeds businesses in order to acquire Monsanto’s. This will ensure that the number of suppliers remains unchanged. Every farmer can decide which seed to use. He can use free seed or he can pay for one of our products. But he’ll only do that if he believes it will deliver greater value.’

Jan Holthuis, Chair of the IBA’s new Agricultural Law Section, says: ‘The EC has forced [Bayer-Monsanto] to divest a great deal – the competing conventional chemicals and the formerly Bayer biotech products and research are going to BASF,’ he says. Under the deal, BASF has agreed to buy Bayer’s field crop seed business for $7bn, alongside its oilseed and soybean portfolios, complementing its existing crop protection business.

Underlining the dominance of the major agrochemical players, Holthuis, an M&A lawyer at Buren, adds that Bayer-Monsanto, as well as Dupont-Dow in the US and ChemChina-Syngenta in China, would ‘also own the majority of patent applications for intellectual property rights at the European Patent Office’.

Current patent law stipulations make it illegal for farmers to multiply patent-protected seed on their own land. A 2018 report by the No Patents on Seeds coalition argues that the wording of patent descriptions and claims is deliberately vague. No distinction is made between genetically engineered plants and decades-old conventional processes, it says, meaning that ‘patents cover all plants with the described characteristics, independently of the method that was actually used’.

No Patents on Seeds Coordinator, Christoph Then, tells Global Insight that ‘in many cases, farmers will not know there is patent protection or plant variety protection’ and that, due to the high costs of patent law litigation and penalties, only the big companies will survive. Messmer, head of the European Consortium for Organic Plant Breeding, adds: ‘Farmers have a very weak position. There is no lobby for farmers strong enough to challenge or fight against global seed company practices.’

There are also concerns that lobbying by the agrochemical giants on free trade agreements (FTAs) could force developing countries to allow patents on seeds. For example, in 2016, Monsanto threatened to withdraw genetically modified (GM) Bt cotton cultivars from India – the world’s top producer of the crop – if the Indian government fixed a maximum price to protect smallholder farmers. The dispute could resurface following a recent announcement by the government that it will impose fresh cuts of 20.4 per cent to Monsanto royalties for GM cottonseeds.

World Trade Organization agreements include ‘provisions designed to increase developing countries’ trading opportunities through greater market access’ and ‘provisions requiring WTO members to safeguard the interests of developing countries when adopting some domestic or international measures’. Then, who is also Executive Director of Testbiotech, an institute researching the risks associated with genetic engineering, states that ‘intellectual property rights are often part of FTAs, with standards that can be beyond those agreed in the WTO’.

Messmer argues that perhaps the greatest threat of the approved mergers will be a dramatic reduction in choice for farmers to use alternative products. ‘It’s the duty of the global antitrust agencies to support a wide range of competitors to secure our seed sovereignty for near and future generations,’ she says. ‘Action is urgently required to avoid unprecedented loss of control of genetic resources for food and agriculture.’