AGEC Articles-1.docx - Article 1 Rising Concentration in...

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Article 1: Rising Concentration in Agricultural Input Industries Influences New Farm Technologies Market concentration is a small number of firms that work together and control a large majority of the market. Several of today's markets are controlled by very few major industries. Some Agricultural Input Industries are controlled by eight industries and some are controlled by four. This concentration in the market is leading to many different changes in marketing; some are positive and some negative. More than fifty percent of global market sales in each sector are now controlled by the four major industries that control each of the different markets. The global market has increased its concentration in several different areas including the following: crop seed/biotechnology, agricultural chemical, animal health, animal breeding, and farm machinery industries. Due to the intensive concentration on the agricultural input industries, new technologies in agriculture are leading to an increase in farm sales. New farm technologies come about within companies when there is a market concentration. There are several industries that lead the technological market for several reasons. One of the reasons is that industries will put patents or many different types of protections on their research and development of new technologies. Protecting your ideas will get you a step ahead of the game on other industries until they can come up with their own ideas. While they are coming up with their own new ideas, the industries are still further advancing their ideas. Although many industries patent and protect their ideas, some will merge together to collaborate with each other on new ideas or create ways to help production move along faster and more efficient. There have been many new innovations throughout the years that are due to a concentrated market. One of the biggest innovations is the change to seed genetics that come from crop seed/biotechnology. Farmers can plant the newly modified seeds that will produce at a higher rate/yield than they originally were. There is a quick widespread of farmers using the genetically modified seeds now to produce their crops at a higher rate. There are many factors that drive market concentration. The concentration varies differently for each market for a variety of reasons. Many firms, big or small, are beginning to merge with other industries to try and become the top industry in the market. If a small industry decides to merge with a bigger industry, it could lead them to taking bigger steps to becoming one of the main industries. This merge helps many industries work together and collaborate ideas on new research and development tactics. The driving force for the crop seed and breeding sectors consolidation was finances. There are large fixed costs with meeting new approvals for the most up to date innovations. Many of the industries in the crop and breeding sectors did not

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