Joe Biden’s administration has set itself the task of boosting competition in the American economy. Under a sweeping executive order to that effect, federal agencies have targeted overdraft fees and “non-compete” agreements that discourage workers from demanding higher wages. They have also allowed hearing aids to be sold over the counter.
All of this is designed to curb the influence of the biggest companies. This week, the White House alerted the agricultural seed sector by forming a task force to look at market concentration in the industry.
You know that meme of a really intense looking guy in front of a bulletin board with criss-crossed red string outlining his conspiracy theory? This is Phil Howard charting decreasing competition in the seed sector.
“Yeah, it’s a lot to keep track of,” he said, laughing. Howard is a Michigan State University professor who has been studying it since the late 1990s.
His latest chart shows that over 60% of global seed sales are controlled by just four companies.
“They have made hundreds of acquisitions of formerly independent seed companies. The power of the seed industry is in fewer and fewer hands,” he said.
The farmers who buy these seeds have less choice and pay higher prices, Howard said.
The history of consolidation in this particular market is matched by a relaxation of antitrust rules across the economy. By about the mid-1980s, there were thousands of independent nut and pop seed suppliers.
“Since that time, antitrust law hasn’t been too intrusive,” said Eleanor Fox, professor emeritus at the New York University Law School.
Beginning with President Ronald Reagan, she said, regulators and courts increasingly approved large mergers and acquisitions that consolidate markets. “The Biden administration is trying to resist that. And it’s not easy,” Fox added.
Because, according to Fox, it can’t destroy any mergers that have already taken place. But it can provide a closer look at intellectual property issues, according to Michigan State’s Howard.
“There were a lot of problems with the current system for patents, really broad patent claims made by these big companies,” he said.
That prevents smaller seed breeders from entering the market, Howard said — and from innovating and competing with the Big Four.
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