It’s also feared the deal could lead to the 51-year-old South African company cutting back on its extensive and highly respected local plant-breeding research.Grain SA’s senior economist: inputs Corné Louw said, “Pannar does promising research out of South Africa to develop seed varieties for local conditions, and this has always been something we have supported. But if the Competition Commission approves the deal, this research could fall away to make way for breeding technologies only imported from other countries”.
He added that the first time Grain SA heard of the proposed deal was when the announcement was issued to the media. However, Pannar’s Peet van der Walt said Pioneer and Pannar will continue to operate independently of each other.“By South African law, we won’t even be allowed to sell the same products, but we will be allowed to exchange inbred seed lines. “By operating independently, Pioneer and Pannar will retain a larger marketshare than if they merged into a single business,” he explained.Many of Pannar’s current seed technologies originate from the US, he added.
Through the deal, the companies would be sharing research and therefore could compete even more effectively against other multinational seed companies.Grain SA chairperson and crop farmer Neels Ferreira added that over the past five years, improvements in technology had been a big driver behind the South African seed industry, and that if companies share their plant breeding technologies, they could provide even better products to local farmers.
“If you don’t have the latest technology available, you’re going nowhere, especially in the maize industry,” he conceded. “Now that the deal has come so far, perhaps it would be a good idea for Pannar to hold a roadshow to explain to farmers exactly what’s happening and to also point out what the advantages will be.”
