Hearing on Ag Industry Consolidation
September 22, 2016
Regulatory barriers facing agriculture are a major driver of agriculture industry consolidation, National Corn Growers Association Chief Executive Officer Chris Novak will testify Tuesday at a Senate Judiciary Committee hearing on consolidation and competition in the U.S. seed and agrochemical industry. Novak is testifying on behalf of both the National Corn Growers Association and the American Soybean Association.
“Domestic regulatory hurdles for crop protection chemicals and delays in international approvals for new seed traits represent significant barriers to market entry. These barriers slow down innovation and drive up the cost of seed and chemicals. The process of developing and testing new products, and then securing regulatory approval to bring them to market, requires a substantial amount of time and money. As a result, fewer and fewer companies have the resources to be players in the market. This trend toward consolidation will continue unless and until Congress addresses these regulatory hurdles,” Novak will testify.
Together, NCGA and ASA represent more than 500,000 corn and soybean farmers nationwide, and they have a direct interest in ensuring a competitive marketplace for crop production inputs. Earlier this year, NCGA and ASA joined forces to conduct an analysis of a recently announced merger and ensure their members’ best interests were represented in conversations with the Department of Justice.
In written testimony submitted to the Senate Judiciary Committee for the hearing, NCGA and ASA argue that a competitive marketplace is measured by more than the number of competitors, but also their size and relative ability to compete.
“True competition is not based solely on the number of players within a given market. Strong competition can result from having several evenly-matched companies fighting for market share within the seed, chemistry and trait development markets,” the written testimony states.
NCGA and ASA call on government and industry to work together to maintain farmers’ access to tools and technology.
“We’ve seen a significant decline in the number of small-to-medium sized family farms. Fewer farmers means that the agribusiness industry that supports the farm community has fewer customers—resulting in consolidation beyond the farm gate. The speed at which the industry continues to consolidate, and the tenuous state of our farm economy, dictate that we work diligently to ensure that our farmers will still have access to a range of technologies without suffering higher costs,” the written testimony states.
Click here to read the full written testimony.
Founded in 1957, the National Corn Growers Association represents more than 40,000 dues-paying corn farmers nationwide and the interests of more than 300,000 growers who contribute through corn checkoff programs in their states. NCGA and its 48 affiliated state organizations work together to create and increase opportunities for corn growers.
ASA represents all U.S. soybean farmers on domestic and international issues of importance to the soybean industry. ASA’s advocacy efforts are made possible through voluntary farmer membership by farmers in 30 states where soybeans are grown.