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Emerging agricultural inputs, such as genetically modified seeds and pharmaceuticals for livestock, are the products of expensive R&D; programs. Factors such as complementarities in research and production, and ownership of the intellectual property embodied in these inputs can shape competition in these industries. Understanding R&D; requires keeping up with industries evolving structure of input industries—including the strategic behavior and economic consequences of mergers and acquisitions.
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Concentration and Technology in Agricultural Input Industries—Examines the causes and consequences of industry consolidation and its effect on market efficiency. 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. AIB-763 (3/01).
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updated: June 4, 2001
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