Biotech Giants Merge to Become World's Largest Agribusiness
by Jaya Ramachandran
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by Jaya Ramachandran |
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(IPS) LONDON --
The
merger of biotech giants Novartis, of Switzerland, and AstraZeneca, of the UK, creating the world's biggest agribusiness concern, has alarmed some of Europe's largest development agencies, which worry that the rights of small farmers will be further eroded.
The two companies' shareholders approved the merger at a meeting in London last week. The new company will be called Syngenta. According to Paul Collins of Britain's ActionAid, Syngenta will be ranked number one in the world for agrochemicals -- herbicides, fungicides and insecticides. It will be number two for seed treatments and the third largest seed supplier. That Syngenta will be a truly global concern is underlined by the pro forma regional turnovers of the two companies for 1999. In Europe, Africa and the Middle East, with 40 research and production sites, the turnover amounted to $2.87 billion. In the NAFTA region, comprising the U.S., Canada and Mexico, with 18 research and production sites, the turnover was $2.46 billion. Seven research and production sites in Latin America fetched $955 million, and 21 establishments in the Asia-Pacific region $1.04 billion.
Syngenta's is to be floated on the Swiss, London, New York and Stockholm stock exchanges. Its combined sales will amount to $7.34 billion.
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Novartis and AstraZeneca have been researching Genetic Use Restriction Technologies (GURTS), the most famous of which is "Terminator Technology." The Terminator Technology generates sterile seeds that force farmers to buy need seed or new chemicals each year.
GURTS-dubbed "Traitor Technology" relates to the control of other plant characteristics or traits. These traits can be switched on or off by the application of a proprietary -- or company licensed -- chemical. The implications of the creation of the mega-corporation are examined in a study entitled "Syngenta: Switching Off Farmers' Rights?" Conducted by ActionAid in conjunction with the Swiss agency Berne Declaration, the Swedish Society for Nature Conservation and Gene Watch UK, the study said poor farmers may find they have no choice but to use GURTS seeds. Founded in 1972, ActionAid works with over 5 million of the world's poorest people in more than 30 countries across Africa, Asia, Latin America and the Caribbean. The report points out that farmers have always saved seed, and 1.4 billion people still rely on them as their primary seed source. "Terminator means farmers would have to buy new (patented) seed or chemicals which will switch off the sterility each year, at an increased and annual cost. Such a cost would be felt heavily by poor farmers in the South," it said. The study said this needs be viewed in the context of multinationals buying up local seed companies and dominating national seed markets in the South -- for example, the corn market in Brazil, where Monsanto now controls 60 percent of the market. Collins said, at the shareholders' meeting Oct. 11, Zeneca Agrochemicals' CEO Michael Pragnell had repeated a commitment not to commercialize the Terminator Technology. "But ActionAid doubts this statement after the firm took a 20 percent shareholding in ExSeed Genetics, a U.S. firm with a Terminator patent," Collins told IPS. Last year, Zeneca Agrochemicals had assured ActionAid that they were "not developing any system that would stop farmers growing second generation seed, nor do we have any intention of doing so." Pragnelli even wrote to ActionAid, stating: "Zeneca has no interest in trying to change farmers' traditional practice of saving seed and in fact we decided in 1993 not to develop and bring to market any system which would prevent farmers from doing this. We have no intention of revising this decision." Novartis said in February that the company had "a longstanding policy that we will not use genetic use restriction technology to prevent seed germination." But where does the merger leave their promise? Collins said: "These companies have said no to Terminator, but they have left themselves clear to develop Traitor, which will oblige farmers to buy chemical inducers each year." According to the study, the merger into Syngenta will not be without human costs. Three thousand jobs are expected to be lost worldwide and the restructuring costs are estimated at $850 million. The new management will be led by Novartis' Heinz Imhof as president and David Barnes of AstraZeneca as vice-president, with Zeneca Agrochemicals' Pragnelli taking on the role of Syngenta CEO. The European Commission, acting as an anti-trust watchdog for the 15-nation European Union, required that each company make a number of divestments before the merger was authorized. This, according to the study, was due to concerns about the creation or strengthening of dominant positions in certain markets. The cereal fungicides based on strobilurin and flutriafol, as well as maize herbicides sulcotrione and acetochlor, were sold as part of this deal. For example, in the herbicide protection of corn, the merger would have created a market share of up to 65 percent in some countries, four times bigger than the nearest rival, Aventis, the ActionAid report adds.
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October 23, 2000 (http://www.monitor.net/monitor) All Rights Reserved. Contact rights@monitor.net for permission to use in any format. |
