Times Republican

Monsanto is the gorilla controlling the seed industry

May 12, 2008

By David Kruse

Fred Stokes, a prominent figure in the Organization for Competitive Markets wrote: “As you know, the seed industry has become highly concentrated, with Monsanto becoming the dominant global player in the industry.”

It is said that he who controls the seed controls the food supply. Monsanto clearly is the 800-pound gorilla and has a reputation for playing rough. The OCM is launching a new project that will take a critical look at the seed industry and the ills of concentration. On Wednesday, April 16, Michael Stumo, OCM General Counsel, and I were guests on the Derry Brownfield Show and discussed the new project and seed industry concentration.

The following Monday, Derry Brownfield was notified that his right to broadcast over the Learfield Communications Network was being terminated; presumably because of the April 16th broadcast.”

Monsanto is ranked 305th out of the fortune 500 in 2007, with revenue of over $8.6 billion and profits of $993 million, up 44.1%. A recent article in Vanity Fair called “Monsanto’s Harvest of Fear,” was scathing in accusations describing Monsanto corporate tactics as “ruthless.”

Vanity Fair wrote, “In 1980, the U.S. Supreme Court, in a five-to-four decision, turned seeds into widgets, laying the groundwork for a handful of corporations to begin taking control of the world’s food supply. In its decision, the court extended patent law to cover ‘a live human-made microorganism.’

The precedent was set, and Monsanto took advantage of it. Since the 1980’s, Monsanto has become the world leader in genetic modification of seeds and has won 674 biotechnology patents, more than any other company, according to U.S. Department of Agriculture data.”

Monsanto first went through the court system to solidify its legal grip on the patent rights of the genetics it develops and then went about changing long held practices of farmers by selling seed but retaining the rights to the genetic traits they have patented. Farmers were used to saving seed, ‘brown bagging’ it as the practice was called.

Farmers were denied the right to save Monsanto’s seed from one crop for the next. When they buy patented seed they don’t “own” the genetic rights, they’re only renting them on an annual basis for a fee.

A lot of farmers did not initially accept the new way of doing business or Monsanto’s patent rights and Monsanto went methodically about teaching lessons to all those who violated their patented rights and seed agreements. Whether Monsanto’s claim to their genetic monopoly is morally right or wrong, it has been legalized by the courts. Monsanto aggressively defends those rights.

You can think the worst of them and call them bad names but Monsanto holds the genetic keys to the future of global food production in their vault and without them, the world will produce less food and fiber at a higher cost. That’s a heck of a valuable monopoly to own.

Monsanto is not infallible. A number of years ago, I challenged them and lived to tell about it.

I have never challenged their patent rights. My companies follow the law and seed agreements both here and in Brazil. I’m a “good” customer of Monsanto and very pleased with the products they sell today. I wasn’t always pleased, however. That’s where my run in with Monsanto occurred.

When they first introduced RR soybeans it was common knowledge that initially in a rush to get their product on the market, they put the RR gene into poor genetic soybean seed and yields lagged. University yield trials showed the yield lag. I confirmed it on my own farm as did neighbors, yet Monsanto bombarded the air waves with a commercial that claimed “higher yields” from their new RR soybean varieties.

A local radio station provided me a copy of the commercial and I produced a CommStock Radio Report interviewing a local farmer who had experienced the RR soybean yield lag and pasted in Monsanto’s erroneous claim to higher yields as “but Monsanto says ... Higher Yields!” Monsanto spends a lot on advertising, giving them clout beyond the control of what gets aired in their commercials. I was summoned by the station owner, who in a very uncomfortable situation for him, backed me.

I was right. Everybody knew it. The result was that Monsanto dropped the “higher yields’ commercials. They ceased to air. Maybe that was a coincidence, but I doubt it. It was simple truth in advertising.

An Asgrow agronomist (Monsanto owns Asgrow), confirmed the technical reasons for the initial RR soybean yield lag and also why it would eventually go away as their breeding program matured.

It did. He was right. I grow RR soybeans today. I don’t believe Monsanto will allow the same thing to happen with their new genetic products. I think it was a case where their advertising department temporarily overshot their genetic capability.

Today, RR soybeans likely do out yield non-GMO varieties, if for no other reason than that nothing is put into seed research for non-GMO varieties any more because seed companies make less money from plain seed and farmers want GMO seed traits. Trendline corn/soybean yields are climbing today and Monsanto genetics can take a lot of credit for that.

Not long after my on air challenge of Monsanto’s commercial advertising, a Monsanto executive paid me a visit. He was professional, cordial and unthreatening. I practice the Golden Rule.

David Kruse is president of CommStock Investments,Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.