After a meeting with President-elect Donald Trump last week, the CEOs of Bayer and Monsanto are promising an increase in American jobs and more funding for research and development. As Politico reports, this is the latest in a trend of one-to-one meetings between Trump and CEOs, with a focus on U.S. job retention.
The specifics include $8 billion in research and development funding and 3,000 new American jobs, while retaining all 9,000 currently employed in the U.S. by the two companies.
For farmers, a merger between Bayer and Monsanto leaves many questions likely not addressed in that Trump Tower meeting. With tight margins and floundering commodity prices, a merger between two of the biggest agribusinesses leaves many producers worried that input prices will rise as competition disappears.
While Monsanto and Bayer tout the differences between their offerings, reporting from Farm Journal’s Sonja Begemann shows that the merged company would control nearly a third of the soybean seed market, almost 40 percent of the corn seed market, and a significant majority – 70% – of cottonseed.
Increased R&D would be beneficial for growers, but the promise lacks any real punch, as it was made in an unofficial meeting with the president-elect, not during a regulatory hearing, as is common practice. Trump’s team says the deal will still go through all the regulatory channels before approval or rejection.
The news also comes as the incoming Trump administration still hasn’t nominated a Secretary of Agriculture, just days before the inauguration.
Trump’s heavy-handed approach to job-creation is applauded by some, and dismissed by others see it as a blueprint where companies threaten to move overseas, with the hopes of tax breaks and incentives from a Trump meeting. The deal made with Indianapolis-based Carrier is an example of this double-edged approach to corporate diplomacy.
Politico cites New York labor lawyer Vincent Pitta, a friend of Trump’s, saying, “He's using the bully pulpit pretty damn well if you ask me.” Pitta goes on to say, “No one ever pushed these companies to keep the jobs like this, and he hasn't even taken office yet."
But on the other side of the argument, Richard Painter, top ethics lawyer for George W. Bush, says this myopic approach to business dealings could be dangerous for the White house, long term.
"It can start to look like the president is playing favorites and can send all sorts of mixed signals to the business community,” says Painter. “He needs to be spending his time worried about big-picture details and not individual details."
Midwestern politicians and advocates representing the Midwest have come out against the merger. Senator Chuck Grassley (R-Iowa) doubts the promise of increased research and development, and points to the shrinking agribusiness marketplace as bad news for farmers.