Tuesday, September 27, 2016

'Baysanto' and the Competitiveness of the Ag Sector

There is a nice post summing this up over at the Farmer Hayek blog:

It seems to me that the relationship between anti-trust legislation and regulation is an under-discussed issue in these cases. Agribusiness firms are heavily regulated by three of the most powerful regulators in the US: the FDA, the USDA, and the EPA. Many regulations function as fixed costs, implying that there are economies of scale in regulatory compliance. Thus, the greater the regulatory burden placed on firms in an industry, the greater the inducement to merge.

Similarly, from a 2003 issue of Regulation:

'In the end, EPA and the USDA regulatory policies place federal bureaucrats in the middle of virtually all field trials of gene-spliced plants, spelling disaster for small businesses and academic institutions whose scientists lack the resources to comply with burdensome, expensive, unnecessary regulation. The cost of field-testing gene-spliced plants is as much as 20-fold higher than for virtually identical plants crafted with older, less precise genetic techniques.' -Regulation, Summer 2003 

See also:
More details related to this from a 2010 post at EconomicSense - Monsanto Antitrust Case

Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003

No comments:

Post a Comment