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September 24, 2012

DuPont Pioneer now closer to takeover of South Africa's Pannar Seeds, but still fighting public relations battle

U.S. seed ginat Dupont Pioneer had to fight long and hard to get regulatory approval to 'merge' with (really take over) South Africa's Pannar Seeds. Despite spirited opposition by activist groups, Dupont was given approval to go ahead with the deal earlier this year, although that is being appealed.

Among the reasons for opposition to the takeover were fears of  a further swamping of South Africa with GM seeds, fears of a further reduction of 'seed sovereignty' and the general implications of the country's seed supply being significantly under the 'control' of a giant U.S. corporation.

Even though the merger deal is done, the merged entities are still fighting speculation that the price of maize, the country's staple crop and an important export commodity, would dramatically shoot up as a result of the Dupont Pioneer takeover of Pannar. 

Economist Mike Schussler got a lot of attention when he speculated in August that as a result of the merger, South African seed maize prices could rise as much as 15%. He also painted an alarming picture of the potential for collusion between Dupont Pioneer and the other seed giant, Monsanto, to push up seed maize prices. 

This caused much alarm as there is already a feeling that consumers are  squeezed by current maize flour prices. Schussler painted Dupont Pioneer as the big bad wolf. The company is clearly sensitive to this charge after the bruising battle to acquire Pannar.

Dupont Pioneer put out an outraged statement refuting Schussler's contention, with a spokesperson saying immediate post-merger prices were expected to increase by less than 2%.

It was carefully pointed out that out Schussler made his comments at a 'Syngenta-sponsored media event.' Sygenta and Monsanto are Dupont's competitors in the South African market, although the former is a relatively small  player.

Dupont Pioneer's statement also claimed that Schussler's research was sponsored by Syngenta, thereby cleverly planting a seed in the reader's mind about the objectivity and motivation for the research!

African Agriculture      

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