Merged Bayer-Monsanto will corner the market on farm data and software

Angela Huffman | Register Opinion contributor

The Department of Justice (DOJ) is expected to approve the merger between Bayer and Monsanto. If that happens, the world’s newest and largest seed and chemical company will have more in common with Facebook and Cambridge Analytica than meets the eye.

In recent years, large agrochemical companies, including Bayer and Monsanto, have been heavily investing in digital agriculture. This new platform involves collecting data from farms, then building mathematical models and algorithms aimed at giving farmers real-time information on how to grow and manage their crops.

There are a number of ag tech start-ups producing digital agriculture products. However, it appears that Monsanto and Bayer are trying to become like the Microsoft of the late-1990s and control the future of this emerging industry.

Bayer has reportedly agreed to divest all of its digital agriculture assets to assuage the fears of antitrust regulators. Don’t be fooled by this misdirection. Bayer never even released its digital farming platform, Xarvio Field Manager, in the United States, but the company will be happy to take over Monsanto’s similar products.

Monsanto’s Climate FieldView serves the same purpose, providing crop analysis and generating suggestions to farmers for seed planting and fertilizer use. The program is spreading like wildfire. In 2017, Monsanto set a goal of collecting data from 25 million premium acres. By the end of the year, the company reached 35 million. Monsanto is expecting to collect data from 50 million premium acres across the globe by the end of its 2018 fiscal year.

The Climate FieldView platform is starting to look more like Microsoft’s Windows than a simple tool to help farmers maximize yield. In August 2016, Monsanto announced its intent to build a “centralized and open data platform” for digital farming start-ups to build software products and sell them to farmers. Think of a combination of Windows and the Apple App Store, where Monsanto gets access to both the data and part of the profit.

This new platform is one of the most valuable assets Bayer is set to acquire. Monsanto does not allow products that compete with its own products onto the platform, but the combined company will surely integrate Bayer’s pesticides business into the platform, while more start-ups will be excluded.

A combined Bayer and Monsanto would be able to leverage massive data platforms to muscle out innovative start-up companies looking to revolutionize data-driven farming. The combined company would have a near monopoly, a true one-stop-shop, for farming data and farming software.

It stands to reason that if Bayer and Monsanto combine to increase their dominance over digital farming, they will use their near monopoly on farmer data to sell more of their chemicals and seeds to farmers.

Farmers recognize the risk. Based on a recent poll, farmers are concerned that a merged Bayer and Monsanto would use market dominance for one product to push sales of other products. Nearly 92 percent of farmers surveyed are also concerned that Bayer-Monsanto will control data about farm practices. In 2015 testimony, Blake Hurst of the Missouri Farm Bureau put it most succinctly when he envisioned “a smart phone ad arriving within seconds of a farmer encountering weed or insect damage while he’s harvesting his crop.”

DOJ has neglected to do its job and prevent harm to American farmers and consumers by allowing the merger to proceed. Our antitrust laws have failed if the divestment of products that never even made it to the United States is enough to convince regulators that all is well for the future of digital farming. No divestment will be enough to prevent Bayer and Monsanto from cornering the start-up market for digital farming.

DOJ should not tolerate the potential abuses of data and enforce our antitrust laws. The only answer is to block the merger.

Angela Huffman is a sixth-generation farmer and an advocate for economic justice through anti-monopoly reform. She is the director of communications and research for the Organization for Competitive Markets, a think tank focused on antitrust and trade policy in agriculture.