Skyrocketing Seed Prices Spur Antitrust Concerns
Today the LA Times examines the rapid increase in the prices farmers pay for seeds. Spending on seeds grew to $17 billion last year—up an eye-popping 56 percent from 2006. The huge jump has farmers pressing for an investigation, and the departments of Justice and Agriculture are launching a series of meetings to explore whether antitrust practices are pushing food prices higher. Two related forces are largely responsible for the sharp increase in seed costs. In recent years, pricier, genetically altered options have edged conventional seeds out of the market. So rather than simply buying a sack of seeds, farmers are paying more to license and use a proprietary set of genes.
At the same time, consolidation has left most of the business in the hands of a few companies, led by Monsanto (MON), already the subject of an antitrust investigation. The White House has taken notice and could target the industry for more scrutiny. Neil E. Harl, a farmer and retired economics professor, told the Times, “There's a growing sentiment in this White House administration that competition, and the lack of it, is getting to be a serious problem in the food sector.”
But seed prices aren't farmers' only problem. The Wall Street Journal reports a shipping bottleneck is threatening growth in U.S. exports. One soybean farmer has 2,000 acres' worth of crops ready for Vietnamese soy-milk makers. But three-to-four-week shipment delays are irritating his customers and delaying his getting paid.
via Skyrocketing Seed Prices Spur Antitrust Concerns | The Big Money.
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