Will independence in seed industry remain an uphill battle?

If it receives the required regulatory approval, the monster merger between Monsanto and Bayer will create the world's largest agricultural multinational. While the giant takeover by Bayer still may sound surprising, the fusion of the two companies is also 'just the next step' of the tumultuous situation that the seed and plant protection market is in. The market is under pressure price-wise, but moreover, patented technologies play a major key role and trigger rapid takeovers.

Over the last decades numerous consolidations and takeovers have taken place within the seed breeding industry. We have summed up some of the major transactions and takeovers within the (greenhouse) vegetable industry.

After several failed attempts from Monsanto to buy Syngenta, Chinese state-owned chemical company ChemChina took over the Swiss seed and plant protection giant Syngenta in February this year. The bid of USD 43 billion was said to be the largest ever foreign purchase by a Chinese firm. The offer from ChemChina was extended several times and is now open until at least November 8. It's still waiting for an official approval and it's expected that the transaction will be concluded by the end of this year.

Earlier this year the world's two largest chemical companies Dow Chemical and DuPont announced their merger plans and established a separate agricultural branch DowDupont Agri. This company is now the world's second largest agricultural multinational.

This takeover transformed the landscape of the Big Six (BASF, Monsanto, Bayer, Syngenta, Dow and DuPont) into a Big Four (BASF, Syngenta/ChemChina, Bayer-Monsanto and DowDupont Agri).

BASF missed out on the takeover of Monsanto and seems to be a sleeping giant. But perhaps they are eyeballing Limagrain, the French multinational that also owns large vegetable breeders like HM (Harris Moran) Clause, Vilmorin, Hazera Genetics and Nickerson-Zwaan?

But how did Monsanto get this big? Most greenhouse growers will know them as the owners of Seminis and DeRuiter. Seminis was established in 1994 after the acquisition of the Agrow Seed Company, Bruinsma and Genecorp. Bruinsma was a leading Dutch breeder and the first company to introduce a hybrid tomato in Europe.

A year later also Royal Sluis was added to the Seminis portfolio.

Later on in 2007 Monsanto expanded its presence in the greenhouse vegetable industry by acquiring major European greenhouse veg breeders Western Seed, Poloni, and Peotec (as part of the International Seed group).

And their takeover hunger was once again stilled a year later with the acquisition of DeRuiter; this family sold their business to Monsanto in 2008 for a sum of 546 million euros.

Later on in 2012, Monsanto announced that its Seminis brand would focus solely on open field and unheated protected vegetable crops and that the DeRuiter brand would become their brand for protected crops in heated structures, i.e. medium and high tech greenhouses.

These are just a few major takeovers Monsanto made over the last few years in order to strengths its portfolio with important genetic material to breed hybrid greenhouse vegetables. Together with numerous takeovers in other seed industries (cotton, grain and many other row crops), Monsanto suddenly owned 26% of the global seed market in 2015.

Bayer however 'only' owned 4% of the global seed market in 2015. In regards to greenhouse vegetables, they have been the proud owners of Dutch seed breeder Nunhems since 2002. At the time of the takeover, Nunhems was one of the world's top five seed breeders. Just like DeRuiter, Bruinsma and WesternSeed, it was one of the successful Dutch seed breeders that owned much of the most important knowledge and material for high tech greenhouse vegetable breeding. Before the takeover by Bayer, Nunhems also tookover another major Dutch seed breeder: Leen de Mos. Today, Nunhems is the brand for vegetable seeds within Bayer CropScience.

Bayer CropScience recently showed some appetite for more market share when it took over Indian seed breeder Seedworks in June 2015. This breeder from Hyderabad is specialized in the breeding and marketing of hybrid tomato, chilies, okra and pumpkins.

Yet, after all these takeovers, Bayer still remained fairly small in terms of its market share in the global seeds market (4% in 2015). However, they are the world's largest supplier of plant protection products; Bayer owned 18% of this market in 2015. That is why the combination of Bayer and Monsanto is what scares most farmers and growers; they are afraid of having no choice left in the future.

But all these takeovers also have a side effect; the few independent vegetable seed companies that are left have seen a major growth too. Apparently there is a fast growing group of farmers who are interested in buying seeds from independent companies or family businesses.

Rijk Zwaan for example is one of the most successful Dutch seed breeders who are still an independent company. The breeder was sold once, to British Petrol in 1989, but soon a management buy-out secured the independence of the breeder again. Ever since, Rijk Zwaan advertises that it strives to stay an independent company owned by three families.

Also French seed breeder Gautier Semences advertises that they are independent and family owned. Just like Dutch breeder Enza Zaden, they strive to stay independent and say that their freedom helps them to make better choices.

And then there is Axia Seeds; the Dutch seed breeder that was founded in 2010 by the former chairs of Western Seed (taken over by Monsanto in 2007). Backed by six of the largest Dutch tomato growers as shareholders, (Lans, Looye, CombiVliet, AgroCare, Kesgro and propagator van Geest), Axia Seeds is becoming a more important independent player, not only in Holland but also on an international level.

That more growers start their own professional breeding programs is also confirmed by the recent establishment of Totam Seeds. This breeding company was founded in 2010 by the Dutch growers of tomato growers cooperation Prominent.

The question remains how independent this group of breeders can stay.
In any case, it is common ground that the merger between Bayer and Monsanto will not be the end of the consolidation wave in the breeding industry. As the world's population grows, the demand for food increases and the material to achieve this is the wide range of genetic material that is property of a large number of independent business around the world. Thus, it is expected that many more acquisitions will follow, especially in the fast-growing economies of South America and Southeast Asia.