Agriculture Reference
In-Depth Information
The Herfindahl index (HI) is sometimes preferred to concentration ratios
because it is sensitive to the distribution of market shares among firms, while
the concentration ratios are not. In 1994, the HI for the global crop seed
market was lower than similar indices for agricultural input sectors like animal
health and agricultural chemicals. Between 1994 and 2009, HIs for seed,
agricultural chemicals, animal health, and farm machinery all rose, but the rate
of growth was most rapid for the seed sector. In 2009, the ranking for crop
seed was higher than for any other sector, with the exception of animal
genetics. Different sectors of the seed market can be more concentrated than
the aggregate global seed market. For example, we estimate that the top four
companies in the commercial market for vegetable seeds covered 70 percent of
the global market in 2007, and the top eight companies 94 percent. Three of
the Big 6 seed-chemical companies are major players in the global market for
vegetable seeds—Monsanto since its acquisition of Seminis in 2005, Syngenta
since its absorption of parts of the Advanta Seed Group in 2004, and Bayer
since its acquisition of Aventis/Nunhems in 2002. Limagrain also sells a
substantial amount of vegetable seeds and seeds for home gardens. Together
with Sakata, Takii, and Rijk Zwaan, these companies represent the largest
current participants in the vegetable seeds market.
Similarly, concentration in seed for particular crops in important
individual markets can be higher than global concentration overall. For
example, the four largest companies accounted for an estimated 72 percent of
the U.S. market for corn (maize) seed in 2007 and 55 percent of the U.S.
market for soybean seed (NRC, 2010). These shares have most likely
continued to rise. 15 Data from USDA/Agricultural Marketing Service suggest
that in 2009, the top two cotton seed companies, Bayer (Fibermax and
Stoneville) and Monsanto (Deltapine), had 85 percent of the U.S. market for
cotton seed, and the top four companies had 95 percent. These recent estimates
compare with four-firm concentration ratios in 1998 of 67 percent for corn, 50
percent for soybeans, and 95 percent for cotton (Fernandez-Cornejo, 2004).
A GRICULTURAL B IOTECHNOLOGY
AND THE S EED I NDUSTRY
The structure of the seed industry has been transformed in large part
because of the advent of modern agricultural biotechnology. Under the
broadest definition, domestication of plant species and selection of desired
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