Letter from Langdon: Consider the Corporations, By Richard Oswald

Letter from Langdon: Consider the Corporations

By Richard Oswald

September 21, 2016

Like the lilies of the field, corporations don’t toil. But they sure do spin a good story about their need for mega-mergers to keep profits up. Thank goodness they’ve got farmers to do the work for them.

Big corporations are having a hard time competing.

And it’s costing them money.

Now they need to consolidate.

I feel so bad for them.

Speaking as a farmer I know how tough it can be when returns don’t total enough to pay expenses. And I know Monsanto, Syngenta, Dow, DuPont, BASF, and Bayer have my best interests at heart. That’s why they kept raising prices on their patented seeds and pesticides even after prices of wheat corn and soybeans had sunk below green into red.

Perhaps it was meant to give me hope–and some heavy expenses I could write off my taxes.

Either way, they’re the only game in town.

If my biggest suppliers could make money running their competition out of business, then I suppose whether I like it or not, I should too. Anyhow, I need corporate innovation to keep me on the cutting edge. But these days the cutting edge seems like a meat grinder making farmer burgers of me and my neighbors.

We’re on the menu while corporate agriculture is eating high on the hog.

Poor Monsanto just won’t survive without Bayer, the German pharma known for aspirin and Phenobarbital. Now Bayer wants to rebrand Monsanto to get past its negative reputation of pollution and suing farmer customers who don’t pay seed patent royalties. Bayer doubtless understands problems like this because its World War II parent company IG Farben experimented on Jewish prisoners and produced a poison gas used by the Nazis as their final solution. But Pharmacia’s former owner turned subsidiary Monsanto, has its own poisonous cross to bear that resulted in the spinoff of Solutia, the corporate answer to Monsanto’s dioxin liability.

As the song goes, that was yesterday and yesterday’s gone or at least out of the way…along with most of the victims of corporate excess who once stood in the way of profits.

That’s not to say Monsanto doesn’t earn their money. After all, they have to put their $72 bushel of patented soybean seed into paper sacks that cost as much as a dollar . . . or less.

When will the government do something about these unreasonably high paper costs?

Maybe that’s why it almost makes me sad when Monsanto can’t make a lot of money.

Even though Monsanto delivered “solid” performance in 2015, the end must be near with profits in 2016 down nearly 25%. Speaking as a farmer, I wish I had hope for any 2016 profits at all let alone 75% of last year’s. And Monsanto is blaming my equity-losing situation for its own inability to earn more than a few billion dollars this year.

Senators Orrin Hatch of Utah and Thom Tillis of North Carolina say this is the result of too much government regulation. Maybe they should get a real job outside Washington.

I’d be happy to sell them mine.

Tax free of course.

But Senator Chuck Grassley, a farmer in his own right, says farm profits are dwindling among higher seed prices and all these corporate mergers. National Farmers Union President Roger Johnson noted that three very large companies could soon control 80% of corn-seed sales in the US and 70% of worldwide pesticide sales.

So while I pay $60 bucks or so for about 80% of a bushel of soybean seed, I’ll be paid $9 or $10 for the full bushel of soybeans I sell. And even though the soybean seed I plant is identical to the seed I’ll harvest, I can’t hold any of my harvest back to use as seed corn next year. That would violate the agreement I have to make with Monsanto for the privilege of losing money. That’s not to say Monsanto doesn’t earn their money. After all, they have to put their $72 bushel of patented soybean seed into paper sacks that cost as much as a dollar … or less.

When will the government do something about these unreasonably high paper costs?

Like the old cowboy who still hopes to break that mustang to walk, farmers like me keep paying our bills hoping that somehow things will get better and we’ll ride off into the sunset. But when our corporate suppliers find their chickens coming home to roost, they sell themselves tax free on a government pass so that shareholders and customers pay the bills.

When that happens, corporate CEOs get a golden parachute to sunny days on the golf course.

If a farmer ever actually got to a debt-free place in the sun on green grass, chances are he’d want to put cows or sheep on it, or plow it up. Then he’d start the whole thing over again. Still, on rainy days, I wish I could do that … just sell my stuff and retire on the proceeds. But when farmers sell out, the next bill they pay is to the banker. Then we pay income and capital gains tax. We’re lucky if we escape with the shirts on our backs.

That’s why I always smile when I hear politicians talk about cutting taxes.

It hasn’t happened here yet.

If only we could merge.

Our best alternative now is the step up in basis our heirs get if we can hang on to the end.

Of course, jobs are at stake. Not mine. The other ones. And these mergers save jobs, according to Bayer and Monsanto, even though they also say some will be lost when they join forces. That should be comforting to 1,500 forced retirees who know even though they are history, somebody somewhere still has a job.

It’s about cutting costs.

Not mine.


But as for me, the bare-bones farmer beneficiary of all this competitive corporate consolidation whose face you will never see on a box of cornflakes, I am thankful my government is watchful though slightly inactive against unfair trade practices.

Otherwise someone might take advantage of me.

Richard Oswald is a fifth-generation farmer and president of the Missouri Farmers Union.