September 10, 2001
In the past decade, the worldwide value of corporate mergers and acquisitions increased from US $462 billion in 1990 to over US$3.5 trillion in 2000, roughly 12% of total world economic output. This concentration of corporate power has affected most sectors of the global economy at the same time as disparities between the rich and poor have grown sharply: according to the United Nations Development Programme, the richest 1% of the world's population receives as much income as the poorest 57%.
The agriculture industry has been affected by such concentration: the top 10 seed firms now control 30% of the US$24.4 billion commercial seed market and the top 10 agrochemical corporations control 84% of the US$30 billion agrochemical market.
Rural Advancement Foundation International (RAFI) has monitored corporate concentration in the food and agriculture industries for several decades. Under its new organizational name, the Action Group on Erosion, Technology and Concentration (or the ETC Group) has released a report analyzing corporate concentration in the food, agriculture and health sectors. Entitled "Globalization, Inc. -- Concentration in Corporate Power: The Unmentioned Agenda," the report provides a brief sector-by-sector analysis of the leading companies involved in the closely related fields of pharmaceuticals, biotechnology, genomics, seeds, agrochemicals, food and beverage processing and mega-grocery retailers. Arguing that international bodies cannot address world food security without addressing corporate ownership, control and consolidation, the report calls for strengthening the U.N. Food and Agriculture Organization's economic division to monitor the impacts of multinational corporations and new technologies on world food security.
Agricultural Biotechnology (ag biotech) is not a crowded field in terms of numbers of 'major player' companies. Following two decades of fast-paced mergers and acquisitions, five major "Gene Giants" dominate the market: Pharmacia, DuPont, Syngenta, Aventis and Dow. Despite industry analysts' hestitations about and the recent public outcry against genetically modified organisms (GMOs), the ETC Group cautions that it is "premature to write ag biotech's obituary." Although some companies such as Novartis, AstraZeneca and Pharmacia have sold off their ag biotech interests, the German-based agrochemical companies Bayer and BASF each announced plans in the past year to invest heavily in ag biotech.
Despite industry claims that ag biotech is implemented and accepted by diverse groups of farmers growing diverse crops worldwide, the introduction of genetically engineered (GE) crops over the past five years is better characterized by uniformity, industrial agriculture and corporate concentration. In 2000, commercial GE crops were not diversified. Only four crops -- soybean, maize, cotton and canola -- accounted for virtually all crops planted. In the same year, 98% of all GE crops were grown in three countries: the U.S., Argentina and Canada. Three-quarters of the area devoted to GE crops last year was engineered for a single trait: herbicide tolerance. The rest was engineered for Bt crops, insect resistance or a combination of the two traits. Finally, only one company's GE seed technology -- Pharmacia (Monsanto) -- accounted for 94% of the total area sown to GE crops last year.
A University of California at Berkeley study illustrates the degree to which the Gene Giants control key patents and technology. At the end of 1998 the U.S. Patent and Trademark Office had granted 1,370 ag biotech patents to the top 30 patent assignees. Three-quarters (74%) of the ag biotech patents (of those awarded to the top 30 assignees) were held by six Gene Giants: Pharmacia (Monsanto; 287 patents), DuPont (279 patents), Syngenta (173 patents), Dow (157 patents), Aventis (77 patents) and Grupo Pulsar (38 patents).
The closely interlinked nature of the ag biotech, seed and agrochemical industries is clear: seven top ag biotech companies or "Gene Giants" (the top five plus Bayer and BASF) rank as the world's top seven agrochemical corporations. These seven Gene Giants also rank among the world's top 10 seed corporations.
The top two companies -- Syngenta and Pharmacia -- control 34% of the global agrochemical market, valued at US$29,880 million in 2000. Last year, the second year of decline, global agrochemical sales fell by 0.6%. According to industry analysts, sagging pesticide sales are a reflection of the global farm crisis -- the combination of overproduction and rock bottom commodity prices. Sales in North America, which account for nearly 30% of the world's total agrochemical sales, were up by 2.8% partly due to soybean plantings. One analyst predicts that the agrochemical market will grow by 1% per year over the next five years.
Top 10 Seed Companies (Ranked by sales in 2000)
2000 Seed Sales (US$, millions)
1. DuPont (Pioneer) --
2. Pharmacia (Monsanto) -- USA $1,600
3. Syngenta -- Switzerland pro forma $958
4. Groupe Limagrain -- France $622
5. Grupo Pulsar (Seminis) -- Mexico $474
6. Advanta (AstraZeneca & Cosun) -- $373
U.K. and Netherlands
7. Dow (+Cargill North America) -- USA $350
8. KWS AG -- Germany $332
9. Delta & Pine Land -- USA $301
10. Aventis -- France $267
ETC Group (Action Group on Erosion, Technology and Concentration), "Globalization Inc. -- Concentration in Corporate Power: The Unmentioned Agenda"
Ag Biotech Countdown: Vital Statistics and GM Crops, Update--June, 2002