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NZ farmers watching Bayer's Monsanto deal

NZ NewswireNZ Newswire 15/09/2016 Jonathan Underhill

Bayer's $US66 billion ($NZ91 billion) acquisition of Monsanto, creating the world's biggest supplier of seeds and agri-chemicals to farmers, will be closely watched by New Zealand's rural sector.

Federated Farmers arable farming chair Guy Wigley called it "a significant development for New Zealand farming."

"It's a very finely tuned marketplace and farmers are highly sensitive to pricing," he said. "The costs and benefits of using all their products are keenly understood."

Wigley likened agri-chemicals to the pharmaceuticals industry, where there was plenty of competition for older products that had come off patent while companies sought a premium to cover research and development costs for new products.

The Commerce Commission said it is unable to comment on whether the transaction would require its scrutiny.

However, John Hampton, professor of seed technology and director of the Lincoln University Seed Research Centre, said it may require antitrust approval.

While Monsanto is the world's largest seed company, its GM crops such as Roundup-ready Canola, soybean and maize aren't sold in New Zealand and its local sales in that market are confined to vegetable seeds produced by its Seminis and De Ruiter units.

Bayer has a smaller seeds business but is mainly in the pest and disease product side of the agri-chemical market, including seed treatments, while Monsanto's chemicals were more in the herbicide and weed control side of the market.

All up there were about half a dozen major companies in the seed sector, "so I can't see there would be a major impact in what's happening in seeds in New Zealand," Hampton said.

Globally, there was no new herbicide chemistry emerging and increased resistance and regulatory hurdles for some existing ones. At the same time growing demand "for more sustainable methods of weed and pest control," he said.

"Chemicals aren't the future. Now the industry is looking at interactions between microbes and plants - biocontrols," he said.

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