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Antitrust issues put heat on Monsanto

Sarah Gardner Mar 10, 2010
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Antitrust issues put heat on Monsanto

Sarah Gardner Mar 10, 2010
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TEXT OF STORY

Kai Ryssdal: The agribusiness giant Monsanto is going to be a big topic in Ankeny, Iowa, this Friday. The Justice and Agriculture Departments will be holding what’s billed as a workshop on agricultural antitrust. Interestingly, Monsanto and antitrust are increasingly being mentioned in the same sentence.

Sarah Gardner reports from the Marketplace Sustainability Desk.


SARAH GARDNER: According to Bloomberg News, at least seven state attorneys general are joining forces to investigate possible antitrust violations by Monsanto. On top of that, the Justice Department has been investigating the company’s marketing practices. Today Monsanto execs kept mum, but a corporate spokeswoman speed-read a statement.

SPOKESWOMAN: Monsanto believes an objective review of the agricultural sector will reveal that competition is alive and flourishing.

That was “competition” is alive and flourishing, an assertion many U.S. soybean and corn farmers dispute.

John Crabtree directs the Center for Rural Affairs in Nebraska. He says when farmers pay for seed these days it doesn’t feel like there’s competition.

JOHN CRABTREE: When not too many years ago they used to be able to buy a bag of soybean seed, for example, or corn seed for under $100 a bag and now they’re paying close to or even above $300 a bag. These are enormous price increases.

BRUCE BABCOCK: Well Monsanto has been increasing prices for their seed.

Iowa State University economist Bruce Babcock…

BABCOCK: And the reason they’ve been able to do it is because they produce really good seeds, and they have property rights over those seeds.

Antitrust lawyers say it’s not illegal for a company to hold a monopoly share. But Backcock and others say the real question is whether Monsanto uses its market power illegally to stifle competition. Among the practices that may violate the law: offering generous rebates to seed distributors if they exclude rival products.

I’m Sarah Gardner for Marketplace.

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