AAI filed comments today in United States Department of Agriculture Docket No. AMS-AMS-22-0025, a request for information on competition in markets for seeds and other agricultural inputs to support the USDA’s response to President Biden’s July 9, 2021 executive order on competition. AAI’s comments focus primarily on genetic seed traits and transgenic seed (“agricultural biotechnology”), and how consolidation has eroded and transformed competition in agricultural biotechnology markets. AAI’s comments explain how unchecked consolidation over several decades has led to a tight oligopoly of three vertically integrated companies that control the markets for seeds, seed traits, and their associated pesticides, and how the growing role of farming data compounds the competition issues resulting from this market structure.
AAI’s comments break down how a lack of effective competition between the Big 3 in agricultural biotechnology, combined with the rise of genetic seed trait technology, has reduced choice and innovation in seeds and seed traits available to farmers. Consolidation has fostered the elimination of the parallel path innovation and joint ventures that are critical to pathbreaking innovation in complex technology markets. At the same time, as the Big 3 have bought up smaller rivals, they have removed those rivals products from the market and neutered the potential for nascent competitors to grow into true alternatives. AAI also explains how the vertical integration of agricultural biotechnology markets has shifted competition from individual seeds and traits to competition between a limited number of integrated systems, raising barriers to entry and reducing choice.
AAI’s comments urge the USDA to both work proactively with antitrust agencies to carefully scrutinize further horizontal and vertical merger activity, particularly mergers involving nascent competitors, and to develop positive policies that will facilitate competition in these markets. Specifically, AAI proposes that USDA work to define property rights in farming data, develop technological standards and open-source resources for interoperability between seed trait systems, and develop rules to facilitation switching and portability between large systems.