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BUSINESS: Organization for Competitive Markets (USA) opposesMonsanto acquisition of Delta & Pine



------------------------------- GENET-news -------------------------------
TITLE:  OCM opposes Monsanto acquisition of Delta & Pine
SOURCE: Organization for Competitive Markets
AUTHOR: Press Release
URL:    http://www.competitivemarkets.com/news_and_events/press_releases/
2007/3-12Monsanto.htm
DATE:   12.03.2007
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OCM opposes Monsanto acquisition of Delta & Pine

The Organization for Competitive Markets filed its opposition to
Monsanto's proposed acquisition of the Delta & Pine Land Company. The
acquisition would, if allowed, tremendously concentrate the transgenic
cotton trait and cotton seed markets in Monsanto's hands.

"Monsanto's past history of consolidation and charging excessive
technology fees in other seed markets shows this deal would harm cotton
farmers across the United States," said Keith Mudd, OCM President.

OCM's letter to the U.S. Department of Justice Antitrust Division is below.

*****

March 9, 2007

The Honorable Thomas O. Barnett
Assistant Attorney General
Antitrust Division
United States Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530

Re: Monsanto's proposed acquisition of Delta & Pine Land Company

Dear Assistant Attorney General Barnett:

The Organization for Competitive Markets (OCM) is an independent,
nonpartisan, nonprofit group of farmers, ranchers, academics, attorneys,
and policy makers. Preserving and protecting competitive markets in
agriculture is our central goal, and gives rise to the organization's name.

OCM strongly opposes Monsanto Company's proposed acquisition of Delta &
Pine Land Company, which would devastate competition in the transgenic
cotton trait and cotton seed markets, with ripple effects in other crop
markets, such as corn and soybeans, and to downstream industries that
rely on corn, cotton, or soybeans as inputs.

Monsanto is the dominant developer and licensor of transgenic seed
traits used in cotton. Transgenic traits allow seed companies to produce
seeds that grow plants able to resist insects and tolerate certain
herbicides. In the cotton transgenic seed trait market, Monsanto holds a
100% market share of insect resistant traits, a 95.1% market share of
herbicide tolerant traits, and a 99.8% market share of stacked traits
(combined herbicide tolerance and insect resistance). Monsanto's
monopoly power in this market is evidenced by its ability to impose
significant increases on farmers for seeds containing Monsanto
technology. For example, according to Center for Food Safety, the cost
of cotton seed has risen 3.4-fold from 1995 to 2005, due primarily to
rising technology fees charged for transgenic traits. These fees
represent about 70% of the price of a bag of seed and make up a
significant portion of farmers' costs.

Delta and Pine Land seed accounts for over half of all cotton acres
planted in the U.S., and enjoys an even larger market share in the South
Central and Southeast regions, where transgenic seed traits are highly
valued. Delta and Pine Land also is a partner with Monsanto competitors
seeking to develop competing cotton traits that would provide much
needed alternatives for cotton farmers. By acquiring Delta and Pine
Land, Monsanto will remove the key partner of its competitors midstream
in their efforts to develop and commercialize transgenic seed traits
that will compete with Monsanto's monopoly products.

The proposed transaction has both horizontal and vertical
anticompetitive effects. Adverse horizontal effects would result from
the ability of Monsanto to derail the joint development efforts between
Delta and Pine Land and Monsanto competitors. Despite Monsanto's public
promises to continue working with its competitors in their trait
development efforts once it acquires Delta and Pine Land, a captive
Delta and Pine Land under Monsanto's control simply has no economic
incentive to work with others to develop or sell traits that will
compete with Monsanto's own existing or future products. As a
consequence, the proposed acquisition would eliminate competition
between Monsanto and rival trait developers, to the detriment of farmers
and consumers.

Anticompetitive vertical effects would result from the foreclosure of
Monsanto trait development competitors from a significant portion of the
finished seed market. A captive Delta and Pine Land would have the
ability and incentive to foreclose competing trait developers from
access to Delta and Pine Land seed varieties. Because Delta and Pine
Land has a 50% U.S. market share of the highly concentrated cotton seed
market and a significantly higher share in the South Central and
Southeast regions, competing trait developers would not have sufficient
non-Delta and Pine Land outlets to license their cotton biotech seed
traits to justify their significant R&D expenditures. This foreclosure
would harm both farmers and consumers through less innovation and higher
prices.

For these reasons, OCM concludes that Monsanto's proposed acquisition of
Delta and Pine Land will eliminate market competition in the cotton seed
and transgenic cotton seed trait markets, to the detriment of
independent family farmers and consumers, who will be deprived of
increased choices and lower prices resulting from competition.

America was made strong by guaranteeing fair, open and competitive
markets. Allowing Monsanto to cement its monopoly will have a dramatic,
negative impact on farmers, as well as on rural communities, the
environment, food quality, food safety, and consumer prices. This
acquisition should be blocked by the Department of Justice.

Respectfully,

Keith Mudd,
President

The Organization for Competitive Markets is a nonprofit organization
working for American farmers, ranchers, consumers and rural communities.


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