the individual firms in the industry. If the industry is completely monopolized, the HHI is at its maximum, 10,000. If there are N firms in the industry, each with an equal share of sales, the HHI equals 10,000/N. As the number of firms in the industry increases, the HHI falls toward zero. The HHI is the preferred measure of concentration because under some conditions it is proportional to the markup of price over marginal cost and so indicates the excess profit due to the exercise of market power (Cowling and Waterson 1976). The US Department of Justice considers an HHI over 1,800 to indicate market concentration worthy of consideration for potential antitrust action.

Published US data are available on four major seed markets—corn, soybeans, cotton, and vegetables. Published estimates of corn seed market shares of the 6-10 leading firms are available for about half the years since 1973—before the first merger wave that affected the US seed industry (table A.5). The market has become more concentrated, but the increase in concentration, is due almost entirely to increases in the market share of a single firm, Pioneer Hi-Bred (acquired in 1999 by DuPont), rather than to mergers and acquisitions. Published estimates of soybean-seed market shares are available for 1988 and 1997 (table A.6). Taking into account the market share of farmer-saved seed, it appears that the most recent mergers and acquisitions have increased concentration in this market, although the degree of concentration is still not high. The US cotton-seed market is highly concentrated because a single firm, Delta and Pine Land, controls 70-75% of total sales (Hayenga 1998). Data on market shares of the top two firms alone reported by Hayenga (1998) imply an HHI of at least 5,300, which indicates a high degree of concentration. As with corn, however, the concentration predated Monsanto's entry into the industry and remains unaffected by the termination of the proposed Monsanto-Delta and Pine Land merger. The vegetable seed-market also appears highly concentrated. The Mexican conglomerate Empresas La Moderna (ELM) accounts for about 40% of US vegetable-seed sales, and mergers and acquisitions have given the agrichemical firm Novartis a market share about half that of ELM (Friedland and Kilman 1999). Both companies have built their market share primarily through mergers and acquisitions. In this case, mergers and acquisitions do appear to have resulted in increased concentration.

Estimates of pesticide market shares were not publicly available. However, markets for some specific pesticides tend to exhibit substantial concentration. For example, Hayenga (1998) estimates that in 1998 the top four firms accounted for about 80% each of sales for soybean, corn, and cotton herbicides.

Publicly available data are insufficient to determine whether all possible seed markets exhibit concentration. The fragmentary data that are available do not clearly indicate that the current merger wave has re-

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