Elizabeth Warren Wants to Break Up Monopoly Seed Companies
The presidential hopeful doesn't realize that government biotech crop regulation helped to create the monopoly in the first place.
Democratic presidential hopeful Sen. Elizabeth Warren (D–Mass.) was on the hustings in Iowa last week seeking caucus votes among the state's farmers. According to the The Washington Post, Warren called for breaking up Big Ag in the hope of appealing to her audiences.
Government statistics do show four companies now share 85 percent of the U.S. corn seed market, up from 60 percent in 2000, and 75 percent of the soybean seed market, up from about 50 percent in 2000. "Twenty years ago, 600 different outfits were selling seeds. Today, basically, it's six," Warren said.
The senator is not wrong about the steep decline in the number of seed companies. Throughout most of history, farmers chiefly saved their own seed and shared it with neighbors. That changed with the development of high-yielding hybrid corn in the early 20th century. Since hybrids don't breed true, farmers began buying their seeds from developers each year. Around 200 seed companies came into existence to supply the market for hybrid seeds before 1940.
Consolidation of the seed breeding industry began after the passage of the Plant Variety Protection Act (PVPA) in 1970. Prior to the PVPA, the courts had ruled that life couldn't be patented. The PVPA created a voluntary program that conferred patent-like rights on seed developers, breeders, and owners of plant varieties. The goal was to encourage the development of new plant varieties by enabling breeders to recover research and development costs. Between 1970 and 1980, about 50 seed companies were acquired by chemical, food, and pharmaceutical firms.
In 1980, the U.S. Supreme Court ruled that genetically modified bacteria could be patented and this extended to the genetically engineered products including crops. In the 1980s there were still some 200 independent seed companies, including many scores of biotech startups. A wave of mergers and acquisitions took off in the 1990s as firms like Monsanto and Syngenta transformed themselves into integrated life sciences companies.
Escalating costs due in part to regulation are part of what drove the consolidation of the seed industry that Warren is now decrying. By one estimate, it takes more than $130 million and 13 years to get a new biotech crop variety to farmers. Startup biotech companies cannot afford to shoulder those burdens. This resulted in six breeders eventually becoming the dominant sellers of genetically enhanced seeds and related agricultural chemicals to farmers. Farmers rapidly adopted the new biotech varieties and associated agronomic practices because of dramatic cost savings and benefits to the environment.
Warren's worries about Big Ag are a bit behind the times. Competiton from a new wave of crop breeding startups is already taking off. These startups are using safe and simple genome-editing techniques to speedily develop new crop varieties with improved nutritional, yield, and pest and disease resistance characteristics. And since the U.S. Department of Agriculture has ruled that its expensive and onerous regulations for earlier biotech crops do not apply to the genome-edited crops, the startups can get their seeds to farmers much faster and at less cost.
The best way for Warren to achieve the goal of reducing the market shares of the big biotech crop companies is to make sure that environmental activists don't succeed in preventing these new crop varieties from getting to farmers.