Seed the Commons retweetledi
It is now illegal for most American farmers to do what farmers have done for 10,000 years. Save seeds from their harvest to plant next season.
Four corporations control over 60% of global seed sales. Bayer-Monsanto. Corteva. Syngenta-ChemChina. BASF.
Over 80% of all corn and more than 90% of all soybeans planted in the United States use patented biotech seeds. Farmers sign licensing agreements that prohibit saving, replanting, or sharing seeds. Every season requires a new purchase.
Seed prices have increased over 300% since 1995.
In the 1990s, most farmers saved a portion of their harvest to plant the following year. Seed companies genetically engineered crops to be resistant to specific herbicides, most notably Monsanto's Roundup Ready system. The seeds worked. Yields improved. Farmers adopted them rapidly.
Then the patents locked in.
Monsanto deployed a team of private investigators to audit farms suspected of replanting patented seeds. They filed over 150 lawsuits against American farmers. Settlements and judgments totaled over $23 million. The Supreme Court ruled unanimously in Bowman v. Monsanto (2013) that patent protections extend to self-replicating technologies including seeds.
Farmers who had planted one crop with patented seeds could not legally replant the offspring of those seeds. The biology of reproduction itself was patented.
Today, the four largest seed companies spend more on intellectual property enforcement and patent filings than many of them spend on R&D for new crop varieties.
The consolidation of the seed industry is one of the least discussed monopoly structures in the global economy.
Corteva (CTVA) was spun off from DowDuPont in 2019 as a pure-play agricultural sciences company. They control roughly 20% of the global corn seed market and are the largest seed company in the Western hemisphere. Revenue exceeded $17 billion. Operating margins are expanding as they shift toward higher-value biotech seeds and crop protection products. The pricing power comes from the fact that once a farmer is in the Corteva seed ecosystem, switching costs are significant because crop protection products are designed to work with specific seed genetics.
Deere & Company (DE) sits at the intersection of the seed monopoly and the equipment monopoly. Modern precision agriculture requires Deere's GPS-guided tractors and automated planters to work in concert with biotech seed prescriptions. The software layer that connects equipment to seed to data is becoming the most valuable part of the farm. Revenue exceeded $51 billion. The precision agriculture division is growing faster than the equipment division.
For broader agricultural exposure, the Invesco DB Agriculture Fund (DBA) tracks a basket of agricultural commodity futures. When seed costs rise, crop production costs rise, which supports higher commodity prices. The farmers absorb the input cost increase. The commodity market passes it to consumers. The companies selling the seeds and the equipment capture margins on both sides.
The seed monopoly is a toll booth on the global food supply. 8 billion people eat every day. Four companies control the genetics.
I'm hosting a once in a lifetime webinar where I go over the exact things I know as a former banker and world class investor.
100% free to join. Sign up with the link in my comments.
English
