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by kelnos 680 days ago
My guess would be it's about pricing. Let's imagine a world where there are only two farms, mine and my neighbor's. We're both using regular seeds, and we do a decent job, but it's not wonderful, and some years our yield isn't so great.

Then Monsanto comes along and wants to sell us a product that gives us better, more consistent yields, even better than our best harvests with the regular seeds. The catch, of course, is that we have to buy new seed from them every year, and can't propagate seed from the prior year's crop.

So my neighbor decides to start buying Monsanto's seeds, but I don't like the terms of the deal, so I don't. My neighbor sees amazing yields, even to the point of surplus. He decides to undercut me by lowering his prices because he has so much to sell, and can still make out better than before, with those lower prices. Nothing's changed for me, so I can't lower my prices. My neighbor's entire inventory sells out, but because of his surplus, only half of my yield gets sold. Fortunately I have some savings to fall back on, so I burn my entire savings feeding my family for the rest of the year, and then grudgingly buy Monsanto seeds for next year.

I'm sure this exact scenario doesn't scale up to the global agricultural system, but I think it's more likely than your naive "no one forces anyone to buy anything; if they buy it, it's because it's worth it" view of economics... things are rarely that simple.

2 comments

In your story nobody is forced to anything. The farmer that doesn't like the monsanto deal made their choice, effectively rendering their farm business less competitive (unable to lower prices like the other farmer). That was predictable, it's also why the other farmer took the deal. Yeah, forced by market to not ignore progress to be better at what you do, that may be, but can't see that as negative.
They are forced in the sense that they don't have a viable choice other than taking a bad deal.

Note that the issue isn't ignoring progress. Neither farmer has an issue with using more sophisticated seeds. The issue is with the deal that goes along with the seeds.

You do realize that most farming is subsidized by the gov these days right? So in your scenario here, likely no farmer is making profit and the gov is paying the difference.