Black emerging farmers and the African Centre for Biosafety (ACB) anticipate an uncertain future for South Africa’s crop production following the approval, on appeal, of the takeover of Pannar Seed by Pioneer Hi-Bred, a subsidiary of DuPont.
Motsepe Matlala, the president of the National African Farmers Union and an established commercial farmer, said this deal would benefit two US-based conglomerates, Monsanto and DuPont, as it would place control of the African seed market entirely in their hands.
“South Africa’s largest seed company is now in the hands of the Americans; many things will change in the company that we once considered our own,” Matlala said.
ACB contended at the Competition Appeals Court that Monsanto already controlled 50 percent of the seed market in South Africa and that the pie would now be split between Monsanto and DuPont.
Mariam Mayet, the director of the environmental NGO, said the takeover ensured the further consolidation of private ownership over local seed systems. In addition, it would sanction the concentration of germplasm, defined as a collection of genetic resources for an organism, in the hands of a small number of multinational corporations.
“This will exacerbate the existing situation whereby farmers are becoming irreversibly disconnected from breeding processes and converted into mere consumers of what they originally collectively produced,” she said.
A crucial issue in the merger was Pioneer’s fervent desire to control locally adapted germplasm that Pannar holds – germplasm that has existed and been used in Africa for a long time.
The deal was granted approval this week by the Competition Appeal Court, overturning an earlier decision by the Competition Tribunal. Under the deal Pioneer Hi-Bred, owned by chemicals to agribusiness conglomerate DuPont, will take a controlling stake in Pannar Seeds for an undisclosed sum.
The takeover met resistance, with authorities concerned that it would erode competition in South Africa’s seed-production market. Prior to the approval, the main players in the market were Monsanto, Pioneer Hi-Bred, and Pannar Seed.
The deal was approved in other African countries without much red tape, although some countries were reportedly uneasy about the use of genetically modified crops.
Approval of the deal is subject to certain conditions and commitments. One of the conditions of the merger is the establishment of a R20 million fund to “increase the productivity, knowledge and welfare of small-scale and developing farmers”.
Ruben Venter, the marketing manager for Pioneer Hi-Bred, dismissed claims that the deal would limit competition. He said Pannar Seeds was a small player in the market, which would contribute to the technological development of Pioneer Hi-Bred’s business.
“The deal will bring lots of benefits. It has been discussed for a long time and it looks at improving the use of technology,” he said.
Pioneer said it had committed R62m over five years to establish a regional research centre in South Africa that would bring advanced research and development in breeding technologies to Africa.
Trudi Makhaya, the manager of advocacy and stakeholder relations at the Competition Commission, said the watchdog would debate the merits of the ruling then decide on the next course of action.
Makhaya said the commission had a mandate to investigate the implications of mergers for the market – especially if the acquisition had an impact on farmers and poor households.
“This is a crucial sector and when such transactions happen they need a deep level of scrutiny. We are not overstepping our mandate,” she said.