Concentration and Technology in
Agricultural Input Industries
By John L. King
ERS Agriculture Information Bulletin No. 763. 16 pp, March 2001
Consolidation in the agricultural biotechnology industry can both enhance and dampen market
competition. This report examines the causes and consequences of industry consolidation and its
effect on market efficiency.
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In some cases, concentration realizes economies of scale, which can improve market efficiency by driving down production costs.
The protection of intellectual property rights is integral to the agricultural biotechnology marketplace, stimulating research and
development, investment, and the development of substitute markets.
However, excessively broad intellectual property rights can hinder the market for innovation. Recent data on mergers,
acquisitions, and strategic collaborations in the agricultural biotechnology industry, as well as the
emergence of life science conglomerates, indicate some level of consolidation.
However, the move by some companies to divest their seed operations calls into question the long-term viability of these conglomerates.
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Source: http://www.ers.usda.gov/publications/aib763/
USDA/ERS publication
N3406 |
