Loosen regulatory barriers
WASHINGTON (ASA) – Regulatory barriers facing agriculture are a major driver of agriculture industry consolidation, National Corn Growers Association Chief Executive Officer Chris Novak testified Tuesday morning at a Senate Judiciary Committee hearing on consolidation and competition in the U.S. seed and agrochemical industry.
Novak’s testimony was 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,” Novak said. “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.”
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.
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