Based on multiple news reports, it appears that the mega-merger between Bayer and Monsanto will happen, creating another diverse giant in the ag industry.
According to an April 9 Wall Street Journal report, the U.S. Justice Department will allow Bayer’s planned purchase of Monsanto to proceed, contingent on Bayer selling off additional digital farming assets, in all likelihood to BASF.
The Germany-based Bayer had launched data-driven platforms including xario and Zoner in recent years. But in an increasingly crowded data management service field, those brands got little if any attention in North America.
But even if Bayer sheds some of it’s current digital farming assets, the acquisition of Monsanto could heighten the debate over how farm data is collected and manipulated by companies, potentially to influence purchasing decisions by farmers.
Monsanto would bring with it access to the Climate Corp., and it’s FieldView platform. Monsanto has aggressively sought to expand it’s data presence and last year announced that FieldView had more than 120 million acres and 100,000 users across the U.S., Brazil and Canada.
“I think there should be concern with the larger market share and power these seed and chemical companies are gaining through these mergers and then bundling their data services with their seed and chemical sales,” says ag attorney Todd Janzen. “You could have a situation where farmers are required to use a specific data platform if they want to use that seed or fertilizer company’s products, which would be an anti-trust problem, so hopefully we don’t go there.”
Consolidation is an increasingly common part of the ag industry, but in the case of data services, choice is a good thing, adds Janzen. Allowing a handful of companies to maintain a controlling interest in this segment of ag business could be problematic.
However, Janzen does point to a potential “silver lining” in that the formation of data giants could create opportunities for start-ups and smaller service providers.
“Whenever you have these giant mergers it can open the door for smaller start ups to chip away at market share of the bigger companies,” he says. “The bigger you get, the harder it is to deliver that individualized service to the farm customer.”
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