The dangerous concentration of the seed market

© Laurent Gillieron/Keystone
There has been a strongly increased trend of concentration in the seed market over the last twenty years. This has now reached the point where a handful of multinationals control the global market. This situation impacts the price of seeds as well as the offer that is tailor-made for industrial agriculture and linked to heavy use of chemical inputs.

Today’s global seed market is dominated by three agrochemical giants: Bayer (who bought out Monsanto in 2008), Corteva and Syngenta. In 2017 Syngenta’s turnover on seed sales totalled almost 3 billion Swiss francs.

These three companies control over 50% of the global market that has an estimated net worth of between 45 and 50 billion Swiss francs.

This oligopoly is the outcome of many different buy-outs and mergers. In the 1980s the market share of the 10 biggest seed companies was still below 15%. There were still a multitude of small and medium-sized companies that were actively involved in the seed market. Today, the ten largest companies control 70% of the market.

The European market

A report that was commissioned by the Green Group of the European Parliament in 2014 highlighted the fact that in the European Union, the five largest corporations control 95% of the vegetable seed market. Monsanto alone -bought by Bayer in 2018 - controlled 25% of the vegetable seed market in the EU. And for maize, 75% of the market share was controlled by the five biggest companies.

In June 2012, a study (in German) that was commissioned by Public Eye and ten other non-governmental organisations demonstrated that the American corporation Monsanto (bought by Bayer in 2018), and the Basle giant Syngenta controlled over half the European seed market for some vegetables: 56% of the pepper varieties, 62% of tomato varieties and as much as 71% of cauliflower varieties. A summary of the main findings is available in French.

Lack of transparency in Switzerland

There is no available data on the varieties of vegetables that are grown and sold in Switzerland. And without any transparency on varieties and their origin, retailers and consumers are not in a position to be able to make informed choices. Furthermore, without this data being made available, the Swiss Commission for Competitiveness COMCO is not able to efficiently supervise the seed market.

© Mark Henley

The dangers of market concentration

According to the UN-report on global agriculture (International Assessment of Agricultural Science & Technology for Development, IAASTD), the concentration of the seed market creates the following problems:

  • A limited number of suppliers leads to the concentration of research and development of a limited number of seed varieties.
  • Concentration makes it more difficult for new companies to enter the market.
  • Concentration has an effect of anti-competitiveness that can lead to massive price increases for seeds. For example, the price of cottonseed tripled or even quadrupled in the United States, following the introduction of Genetically Modified cotton; a similar price hike was observed in developing countries.

Experts raise the alarm

In the “Too Big to Feed” report published in October 2017, the International Panel of Experts IPES-Food underlined the way in which the consolidation of the seed market is making farmers increasingly dependant on a handful of suppliers and eroding their right to decide what, how and for whom to grow.

In another report published in 2016, IPES-Food also drew attention to the fact that the concentration of the seed market “has led to the disappearance of most of the small and medium-sized seed companies and a reduction in the range of varieties that are being developed".

This concentration is also strengthening the industry trend to focus research on a limited number of species and varieties that are commercially profitable. At present 40% of the research carried out by the private sector is concentrated on a single species: maize.

A threat to biodiversity

According to the United Nations Food and Agriculture Organisation, agricultural biodiversity was reduced by 75% between 1900 and 2000. Three quarters of our food comes from just twelve plant and five animal varieties. And within these species, the diversity is very limited indeed. However agricultural biodiversity is the basis of food security.

Influencing policies

The enormous economic power gives companies increasing power over political processes. Their influence on framework conditions (such as the regulatory frameworks or intellectual property rights) is decisive, and of their nature is such that the phenomenon of market concentration continues to grow.

In their 2016 report, lPES-Food also identified the concentration of power in the hands of several large multinational corporations as one of the key obstacles to a transition towards more sustainable food systems:

“Concentration of power in food systems is a lock-in of a different nature: it is a mechanism that reinforces all of the lock-ins mentioned above.”

Agropoly: who controls our food?

Global population and food consumption are constantly rising, yet paradoxically, the number of companies actively involved in the food sector is decreasing. Public Eye (previously known as the Berne Declaration) published a special issue of their magazine on this topic: in an updated issue in 2014 (available in French and German), we showed how an ever-decreasing number of companies are now in a position to dictate prices and control sales’ strategies through the increased influence of public policies.

Seeds and pesticides produced by the same companies

Another worrisome fact: the three biggest seed companies (Monsanto/Bayer, Corteva and Syngenta), are all part of the agrochemical industry and are three of the biggest global pesticide producers. And it is these same producers of pesticides that develop seeds; this clearly implies their vested interest in the need to use pesticides when growing the seeds they produce.

The outcome: a very limited market offer of seeds that are tailor-made to industrialised agriculture and highly dependant on chemical products.

Who benefits from the research?

Parallel to the consolidation of the private sector, public research has collapsed. The combined Research and Development budget of the six largest seed companies is six times higher than that allocated by the American Department of Agriculture to agricultural research – and twenty times greater than the budget of the international agricultural research centres.

In the European Union, the financial resources that are invested by the private sector in developing new varieties is estimated at somewhere between 800 and 900 million euros a year. By comparison, the public sector dedicates a mere 40 million euros to developing new varieties.

© Fabio Erdos/Panos

Protecting farmers’ rights

Industry has done its best to dissuade farmers from using participatory breeding methods in order to create their own new varieties. This was initially done by using hybrid seeds, then through the introduction of intellectual property rights that prevent them from reusing and exchanging their farmers’ seeds. And yet farmers have practised these techniques for millennia, thus developing agricultural biodiversity.

Patents per se increase the concentration of the seed market. Small and medium-sized companies that do not have the means to pay for patents are under pressure, competition is reduced and innovation limited, all of which ultimately leads to price increases and a reduced offer of plant vegetable varieties.