ROUNDUP READY OR NOT
Monsanto is making a kill in the agricultural sector at present. One of the first large agrochemical concerns to invest heavily in biotechnology from the early 1980s, it is now sharpening its teeth for the payoff. In 1995-1996, Monsanto brought its first genetically engineered crops into farmers' fields in the Unites States:
* Bollgard® cotton, carrying a gene isolated from the soil microorganism Bacillus thuringiensis (Bt) which is toxic to certain insects
* New-Leaf® potato, also carrying a Bt gene against Colorado potato beetle
* Roundup Ready® soybean, carrying the RR gene which is engineered to help plants withstand applications of glyphosate, the active ingredient in Monsanto's Roundup herbicide
Up and coming are YieldGuard® corn engineered to resist the European corn borer, Roundup Ready® canola, corn and sugar beets, more Bt crops and NewLeaf® Potato Plus which resists both leaf roll virus and oil in the frying pan (it absorbs less fat during cooking).
The Roundup Ready® soybean is turning into the epitome of many people's concerns about genetic engineering in agriculture and corporate control of the food system. While it has only been through one cropping season, the soybean symbolises many things that take agriculture in the opposite direction of farmer empowerment and sustainability.
Are you ready: the technology control
Roundup Ready® crops are genetically engineered to tolerate glyphosate, the active ingredient of Monsanto's Roundup herbicide. Glyphosate is a broad-spectrum herbicide, meaning it kills any plant it falls on. The alleged advantage of glyphosate over other herbicides is that it binds tightly to the soil particles where it falls, so it shouldn't travel widely from the field where it was sprayed. However, numerous experiences prove this isn't necessarily the case. A big disadvantage of glyphosate is that it destroys anything green, so farmers have to use it before crops emerge and resort to more selective herbicides later in the season.
Glyphosate is marketed under many formulations, some of which are very toxic to animals and humans. Monsanto's Roundup is generally considered the least harmful, although residues of Roundup have been found in crops planted a year after fields were treated. Roundup is also blamed by farm workers and landscape maintenance labourers as the cause of their health problems. Monsanto is proud to boast that Roundup is the most heavily screened herbicide in the world. It should be. It has been on the market for 20 years, is the world's best selling herbicide and provides17% of the company's annual US$ 8.6 billion sales. In the first nine months of 1996, Monsanto's worldwide agrochemical sales increased by 21% to US$2.48 billion, due largely to increased sales of Roundup...
Monsanto's longtime patent monopoly on Roundup will expire in 2000, so the company could lose its clamp on those sales very fast. Enter biotechnology. By having a gene from a microorganism inserted, crop plants can now be showered directly with the chemical. The idea, for Monsanto, is to extend the market life of Roundup beyond the patent. By creating crops tailoured to withstand Roundup, Monsanto will keep its herbicide sales secure.
Because of the inbuilt profits for Monsanto, the Roundup Ready® gene will find its way into a broad range of crops: Roundup Ready® cotton seed will be marketed on a large scale in the US this year, Roundup Ready® corn is in the pipeline, Canadians started growing Roundup Ready® canola last year, and Monsanto wants to market sugar beets, rice and other crops hungry for its herbicide.
Many observers are not so happy with this technology. For one, Monsanto claims that genetically programmed herbicide tolerance in crops will lower the use of weed killers on the farm. There is nothing behind this promise. In fact, the opposite could happen. Glyphosate is supposed to degrade rapidly in the environment. Therefore, farmers growing Roundup Ready® crops could be tempted to use more and more applications convinced that their crop won't be harmed as weeds emerge after it degrades. Also, as glyphosate will be sprayed directly onto crops now by Roundup Ready seed users, it could affect neighbouring fields through air drift. This could induce other farmers to switch to the Roundup Ready® product line to protect their crops from the drifting plant killer, thereby increasing overall glyphosate use in agriculture.
Are you ready: the farmer control
Monsanto obliges any farmer buying Roundup Ready® soybean seeds (and presumably other Roundup Ready® crops as they come to market) to sign a Growers' Contract. The contract lays down astonishing constraints on farmers.
One season's planting only: Farmers who buy Roundup Ready® soybeans are only allowed to sow them for one cropping season. Soybeans can normally be saved from harvest and used for the next planting. Soybean seed saving is even promoted by farmers organisations in Europe as a means of cutting costs. Monsanto will not tolerate this and farmers have to promise not one seed will be resold or saved from their harvest for replanting, research, sale as seed, genetic analysis or reverse engineering. This is the end of the breeding and marketing line, as far as Monsanto is concerned.
Post harvest responsibility: The farmer is responsible for ensuring the above rules are not broken by anyone within three years of purchase of the seed. This means that anyone the farmers sells his/her harvest to has to follow the rules _ or else the farmer gets penalised! And the penalty is enormous. Monsanto will seek retribution of damages equal to 100 times the value of the Roundup Ready® gene multiplied by the number of seeds involved in the infringement plus "reasonable" attorney's fees and expenses (presumably at Monsanto rates). Thus, if the Roundup Ready® gene per se represents US$ 5 per 50 pound bag of seed, a farmer deemed liable for any of the prohibited acts would have to pay US$ 500 for every bag of soybeans plus the legal charges. That a farmer should be responsible for the use of his/her crop for three years after marketing is a shock alone. That it carries such a financial burden, likely to increase, is bordering on the unthinkable.
Roundup only: The Growers' Contract stipulates quite clearly that only the Roundup formulation of glyphosate may be used on the crop. Monsanto's seeds can only be treated with Monsanto's herbicide - by force of law now.
Monsanto police: Farmers who sign on to grow the soybean are obliged to allow Monsanto representatives inspect and test their fields to ensure the contract is being complied with. The contract does not say that the farmer must be present at inspection time. Monsanto's right to police farmers holds for three years after purchase of the seed.
Post farmer responsibility: The obligations of the agreement are fully binding on all heirs, representatives, successors and permitted assigns of the seed buyer. However, the farmer cannot transfer his/her rights under the contract to anyone without Monsanto's explicit agreement.
The Farmers' Legal Action Group in the US has analysed the contract and comes to further conclusions. The word research is not clear in the contract and could mean that farmers and buyers of their crop cannot engage in product development (watch out for processed items like "Herbie Happy Tofu"). Also, Monsanto can claim damages for patent infringement far beyond the "unauthorised use" laid out in the contract itself. Perhaps most disturbing, there is no performance guarantee in the Growers' Contract. Monsanto buoyantly promises all sort of great results from Roundup Ready® soybean in its promotional materials: high yield, effective weed control, no residues, adaptability to all tillage systems, etc. None of these claims appear in the agreement Monsanto makes growers sign.
Are you ready: the market control
The technology clearly works to the advantage of Monsanto sales, whatever the debate over environmental considerations (see table). The patent and the growers contract remove further doubts over how the company can make millions from sales. But there are further elements to ensure market control over the Roundup Ready® crop portfolio.
Monsanto has refused any call for segregation or labeling of its genetically engineered crops, and has obtained full backing of the US government. This has raised a squalor in Europe, where no less than 40% of the US soybean harvest ends up. Although the European Union has given its approval for importation, consumers and environmentalists are protesting against the mixing of Roundup soybeans with ordinary soybeans which will end up in all sort of food stuffs. Already, the German branches of Nestlé and Unilever promised to heed consumer concern and cancelled their orders for US soybeans, amounting to 7% of American soybean exports to Europe.
The debate on segregation can be confusing. Monsanto insists that it is impractical and unnecessary to separate the harvest from Roundup Ready® growers and the others. Yet the company is banking on its legal right, through the Growers' Contract, to pursue misuse of the harvest. If all harvested soybeans are mixed in the US, how can Monsanto trace misuse of its beans with its gene? If importing countries rule against transgenic soybean, for whatever reason of health and safety, then Monsanto will certainly have to find a way to segregate, unless it wants to fall out of the market altogether.
Monsanto and the rest of the biotech industry have also argue bitterly against any logic of labelling products derived from transgenic plants in any conspicuous way. Consumers are the key to the life of these companies. Special attention to transgenic foods could put a damper on sales, especially in Europe and Japan. While consumers want to be informed, the companies lobby governments against any special labelling (see box).
Finally, Monsanto is high on its transgenic horses and is moving fast to snuff competition from other companies. In a dramatic shopping spree now two years in the running, Monsanto has bought an amazing amount of shares in seed and biotech companies. These purchases are astounding: for the consolidated cost, for the market shares they confer to one chemical interest, and for the synergies that Monsanto will now reap between seeds and sprays. Monsanto was never a big presence in selling seeds. But through biotechnology, as NGOs have always predicted, the company can genetically programme seeds to need proprietary chemicals. Buying the seed companies to deliver the full technology package (genes + toxins) is just logical. Monsanto is taking this logic to today's limit.
Monsanto's mad shopping spree
By February 1997 Monsanto had bought:
* a 49.9% stake in Calgene for US$ 80 million in 1995 and an additional 6.25 millions shares in December 1996, bringing Monsanto's ownership to a majority 54.6%;
* a US$ 158 million chunk of DeKalb's stock (10% of its voting stock of and 43% of its non-voting stock) in early 1996; DeKalb is among the United States' top seed companies;
* biotech heavyweight Agracetus from WR Grace for US$ 150 million in early 1996; Agracetus holds major patents of interest to Monsanto;
* US$ 25 million worth of Bt technology from Ecogen in early 1996 (including US$10 million shares in Ecogen's common stock);
* Asgrow Seed Company for US$ 240 million in late 1996; Asgrow holds about 18% of the US soybean seed market and thus turns from competitor to Roundup Ready® delivery mechanism;
* Holden's Foundation Seeds for a whopping US$ 1.02 billion or nearly one-fifth the value of the entire planet's commercial seed industry;
* Holden's is the humble supplier of some 35% of the American maize industry's breeding lines.
The Holden purchase is like buying one of the best genebanks in the world, if genebanks were normally for sale. On December 2, 1996, the investment banking firm Dain Bosworth predicted in a report the sale of Holden and estimated the price at $300-500 million: "Holden's high price has very little to do with Holden as a seed company and a lot to do with the battle between chemical giants for future sales of herbicides and insecticides. (...) If Holden Foundation Seeds is worth $300-500 million, then we only dare to think what Pioneer Hi-Bred, DeKalb Genetics and Mycogen are worth."
But remember: Holden went for more than $1000 million which is 23 times Holden's annual sales. As Bill Freiberg editor of Biotech Reporter noted: "Big ag company profits will need to be squeezed out of farmers, one way or the other. And there's only so much blood that can squeezed out of the proverbial turnip."
The gobbling up of key germplasm, technology and seed suppliers will put Monsanto in top place to fight market leaders like Pioneer HiBred, the world's number one seed company. Pioneer holds half of the US corn seed market and is active in soybean too. Monsanto's fighting posture may drive a worried Pioneer to cut a deal with other big league businesses like AgrEvo (Hoechst + Schering), which just bought Europe's most innovate biotech company Plant Genetic Systems, or Dow Elanco.
Top guns on the market, with critical patents in the pocket and legal tools to control farmers to the maximum, Monsanto is well geared to reap the highest profits it can from agricultural biotechnology. As these products, legal tools and practices move further and further into developing countries, Monsanto may soon control an important part of world agriculture. All to feed the world? Or to sell the chemicals?
* Monsanto: various documents publicly available on Monsanto's home page on the World Wide Web (http://www.monsanto.com).
* Julie Sheppard, "Glyphosate", Pesticides News, #33, Pesticides Trust, London, September 1996.
* L.J.G. van der Maesen and Adikin Somaatmadja (eds), Plant Resources of Southeast Asia: Pulses, PROSEA Publications, Bogor, 1992.
* Caroline Cox, "Glyphosate. Part 1: Toxicology. Part 2: Human Exposure and Ecological Effects", Journal of Pesticide Reform, Vol. 15, Numbers 3 & 4, Fall & Winter 1995, Northwest Coalition for Alternatives to Pesticides, USA.
* "Monsanto Acquires Holden's", AgBiotech Reporter, January 1997.
* Monsanto Roundup Ready® Gene Agreement
* Farmers' Legal Action Group, "Legal Brief on the Monsanto Roundup Contract", 5 February 1997, USA.
* Biotech Reporter, various issues late 1996 through early 1997.
* Dain Bosworth Inc., Seed Industry Overview, Minneapolis, December 2, 1996.
Table: Rounding off the Roundup debate