COVER STORY/A.V. Krebs
The Seed Patenters:
Special to The Progressive Populist
Biotech Giants Force
Farmers into Lockstep
"Adapt or Die!" That was the clarion call issued during the 1970s
to American agriculture by Earl Butz, the Secretary of Agriculture, on behalf
of his corporate sponsors. In the 1990s the call is echoed by corporate
agribusiness itself, but this time it means big business.
With the "agricultural biotechnology revolution," American agriculture
is today on the threshold -- whether all farmers like it or not -- of entering
yet another era of "getting big or getting out," as Secretary
Butz repeatedly counseled family farmers more than two decades ago. Those
who followed such "conventional wisdom" in the 1970s soon found
themselves in the 1980s with crop prices below the cost of production, deep
debt, bankruptcy and foreclosure.
Now the nation's farmers are being asked to again gamble on their future
in the form of biotechnology. "I needed to participate in this in order
to stay competitive," Gregory Guenther, a 44-year-old Belleville, Ill.,
farmer recently told the Wall Street Journal. "Like it or not,
you're almost forced to use the technology."
Leading the way in this so-called biotech revolution are seeds equipped
with agronomic traits -- resistance to herbicides, insects and pests. While
some farmers are embracing the new technology, just as they embraced expanding
their operations from "fence post to fence post" in the '70s,
others are being more cautious.
As Christopher Hausman, a Pesotum, Ill., farmer who raises 600 acres of
soybeans using a brand of Monsanto seeds designed to resist Monsanto's Roundup
herbicide, notes certain fields he planted with the new soybean seeds aren't
producing as well as he expected. Saying he plans to wait to see whether
the yields improve before committing additional acreage. "You just
don't want to leap into this technology head-first," he said. "You
want to try it out first."
Of course, the large transnational chemical and seed companies that are
manufacturing these biotechnologically engineered seeds believe that more
seed varieties gives farmers more choices and the quicker they get such
seeds the better.
Farmers like Bill Northey, who has been farming in northwest Iowa for 17
years, however, noted to the Journal that such seeds can also make
family farmer's work more complicated. "There's a complexity to all
this that requires additional management," he observed "Some people
will thrive in that environment and some won't."
Many family farmers fear that they indeed will be the ones who will not
"thrive" in this new "environment," for while the nation's
major chemical companies, through mergers and acquisitions, have been moving
aggressively to gain control over the makers of the seeds needed to carry
their designer genes, many family farmers fear these mergers could lead
to monopolization and higher seed prices.
"Anytime you have concentration in any market, it drives out the small
producer, and he's normally the person that holds prices in check,"
warns Billy Arpe, a farmer from Roscoe, Texas.
Leading the charge into this new era in the U.S. is the Monsanto corporation,
headquartered in St. Louis, Missouri and the DuPont corporation of Wilmington,
As the Journal observed May 27:
"Monsanto Co. and DuPont Co. are betting the farm in bids to transform
themselves into the Coke and Pepsi of genetically engineered crops. In the
three years since the first transgenic seeds were introduced, crop biotechnology
has grown from a young science to a hot business: About half of U.S. cotton
fields, 40% of soybean fields and 20% of corn fields this year are genetically
altered. Now, in a stunningly swift concentration of power, much of the
design, harvest and processing of genetically engineered crops is coming
under these two companies' influence."
Monsanto is attempting to stake out a leadership in this biotech revolution.
In recent months it has:
* Announced two agreements in the crop-biotechnology field with a total
value of about $4.25 billion. In a bidding war it acquired the DeKalb Genetics
Corp. with a stunning offer of $100 a share for the 60% of the seed-corn
company that it didn't already own. The deal valued the DeKalb stake at
$2.5 billion. In a separate deal, it also agreed to acquire cotton-seed
company Delta & Pine Land Co. in a stock deal valued at about $1.75
DeKalb, based in DeKalb, Ill., gives Monsanto the ability to quickly see
that their genetically engineered seeds gets into the hands of many farmers.
DeKalb Genetics currently controls 11% of the U.S. market for corn seed.
Delta & Pine Land, based in Scott, Miss., is the top U.S. breeder, producer,
and seller of cotton seed; it also sells soybean seed. Currently Monsanto
owns 4.7% of Delta & Pine's common stock.
* Monsanto Co. and Empresas La Moderna S.A., a Mexican biotechnology company,
have signed an agricultural technology collaboration agreement with Mendel
Biotechnology Inc. Monsanto and Empresas will have exclusive access to Mendel's
technical capabilities in plant genetics and genomics for several crops,
including corn and soybeans and fruits and vegetables. Mendel identifies
the function of genes and patents the corresponding DNA sequences that will
produce the intellectual property basis for the next generation of agricultural
products created through biotechnology.
* Positioning itself for greater sales of its genetically engineered seed,
Monsanto acquired the closely held Holden's Foundation Seeds Inc. and its
exclusive sales agents for $1.02 billion. Holden's, a corn-seed seller based
in Williamsburg, Iowa, and Corn States Hybrid Service Inc. and Corn States
International. Corn States, based in Des Moines, Iowa, raises so-called
foundation seed, used by many of the Midwest's small, local seed companies
to grow their own brand of hybrid corn seed for sale to farmers. More than
35% of U.S. corn acres are planted with seed developed from Holden's genetic
material. Analysts, according to the Wall Street Journal, say that
the company's ties to those mom-and-pop seed companies could prove vital
in the marketing of genetically engineered seed, which is what made the
company so attractive to Monsanto.
* In April, 1997 Monsanto Co. signed a contract with Calgene Inc. to acquire
the remaining Calgene shares it doesn't already own for $8 a share, or about
$240 million. At the time Monsanto owned 36.4 million Calgene common shares,
or about 55% of the outstanding Calgene shares. Calgene, based in Davis,
Calif., introduced the Flavr Savr genetically altered tomato in 1994.
* Recently Cargill Inc., the nation's largest private corporation and the
world's leading grain trader, and Monsanto Co. announced the signing of
a letter of intent to form a worldwide joint venture to create and market
new products enhanced through biotechnology for the grain processing and
animal feed markets. The 50-50 joint venture would draw from Monsanto's
capabilities in genomics, biotechnology and seeds and from Cargill's global
agricultural input, processing and marketing infrastructure to develop and
market new products.
The venture is the first to create a system that links biotechnology research
and development from seeds through processing to the customer, said Monsanto.
The joint venture will focus on applying biotechnology to improve feed products
for animals raised for human consumption, such as pork, beef, poultry and
fish. It also will develop and market feed additives grown in crops using
biotechnology and create and market crops with traits designed to reduce
costs and improve yields for the wet and dry milling, oil seed crushing
and refining, feed compounding and other processing industries. Monsanto
and Cargill also said they plan to explore future opportunities to expand
the partnership into agriculture and food.
Following the announcement of this agreement rumors persisted among investors
that DuPont, Monsanto's arch-rival, was seeking a possible merger-acquisition
with Cargill's chief competitor, Archer Daniels Midland, corporate agribusiness'
"Supermarkup to the World."
Even more stunning news, however, came soon after the Cargill-Monsanto agreement
when it was announced on June 1 that American Home Products, the East Coast-based
drugs and pharmaceutical group, will, in effect, take over Monsanto in a
$34 billion merger thereby creating a broad-based "life sciences"
group encompassing pharmaceuticals, agricultural products and food ingredients.
The combined stock market valuation of the two companies is $96 billion.
Hope Shand of Rural Advancement Fund International (RAFI) in Pittsboro,
N.C., who has been relentlessly tracking developments in the biotech industry
for many years, estimates that the proposed merger would make the yet-to-be-named
company number three in the world in seeds, number one in agrichemicals
(surpassing Novartis!), and possibly allow it to jump to number four in
Clearly the merger is one of the most dramatic moves in the growing biotech
industry, an industry that includes DuPont, Novartis of Switzerland, Hoechst
and Bayer of Germany, Rhône-Poulenc of France and Zeneca of the United
Kingdom. The new company, in which AHP will hold a 65 percent stake, will
have annual sales of about $23 billion, will employ 75,000 people and put
about $3 billion a year into research and development.
By agreeing to merge with Monsanto Co. AHP has established a strong foothold
in the growing biotechnology field, while Monsanto deals with important
growth issues relative to its pharmaceuticals business. Analysts note that
by teaming up with AHP, a leading pharmaceutical company with a strong international
presence, Monsanto will get access to the marketing and research and development
resources it needs to grow its pharmaceuticals operations adequately. With
the addition of American Home Products' American Cyanamid Co. unit, Monsanto
will get some additional marketing power for its agricultural chemicals.
"The bottom line is (that) Monsanto was getting more and more resource-constrained,"
Donald Carson, chemicals analyst at J.P. Morgan Securities Corp. told the
Journal. Meanwhile, American Home Products will get to add to its
portfolio what many consider to be the premier company in the fast-growing
area of agricultural biotechnology, and one where AHP was lacking.
In its pursuit of seeking to dominate the biotech marketplace Monsanto has
received sharp criticism for the variety of the means it has pursued in
seeking market dominance.
"We call it terminator technology," said Shand, RAFI's research
director. "It will force farmers to return to the same company year
after year for their seeds." Shand was singling out a new technique,
developed by USDA researchers and the Delta and Pine Land Co., that makes
seeds sterile. The technique has been sowing controversy among critics who
say it will protect big-business profits while unfairly ending the age-old
farm practice of saving a crop's seeds for next year.
Monsanto Co. recently offered a total of several million dollars to some
Mississippi Delta farmers who said the company's Roundup Ready cotton seed
delivered inferior yields. The offer, first reported by the New York
Times, was to settle complaints, filed last summer by about 60 to 70
Delta farmers, that the genetically engineered seed produced yields that
were lower than expected. The cotton seed was created to resist harm from
crop spraying with Monsanto's Roundup herbicide. Monsanto spokesperson Scarlett
Foster said the situation was "extremely unusual." It was, she
said, "an isolated incident," of the under performing cotton seed.
"Our studies indicate it wasn't technology but rather extreme and unusual
Last April the Omaha World-Herald reported that Monsanto was sending
"seed cops," into Nebraska's farming communities bent on building
cases of seed piracy against local dealers, in a bizarre twist in a new
era for farming, when a company's seed patents conflict with a tradition
of saving seed from a harvest to plant in another year. The incident, the
paper noted, testified to the hardball that a company was willing to play
to nab violators, going so far as to send undercover "seed cops"
to follow up on tips and rumors. Monsanto Co. said it had hired Pinkerton
detectives to investigate hundreds of tips in 20 states about illegal sales
of Roundup Ready soybean seed.
Following the European Union's 1997 opposition to genetically modified crops
Bernard Auxenfans, the executive vice president international of Monsanto
Europa S.A./N.V., said the E.U.'s biotechnology regulations would severely
damage the E.U.'s position on the world food market. "The biotechnology
industry in Europe will lag behind the U.S. and South America, who have
fully accepted genetically modified crops," Auxenfans said at a conference
on agriculture, food and trade.
The Monsanto vice president, however, quickly came under fire from producer
and consumer groups in the U.S. and the E.U. Jill Johnstone, head of policy
at the U.K.'s National Consumer Council, attacked Monsanto for underestimating
the consumer and for providing a one-sided argument.She said, "I note
he does not mention the risks. Information on its own is not enough, nor
will greater understanding necessarily put consumers at rest," she
added. "Consumers will believe in the benefits of genetically modified
technology when they see them for themselves."
In November 1996 Monsanto Co. agreed to alter its advertising of its spray-on
glyphosate-based herbicides, including Roundup in New York State after the
state's attorney general complained its ads were misleading. Attorney General
Dennis Vacco said Monsanto was touting its herbicides as being safer than
table salt and "practically non-toxic" to mammals, birds and fish.
"Monsanto's use of the term `practically non-toxic' is not the broad
assurance of safety the public is led to believe," Vacco said. "Because
all pesticides are toxic, at least to some degree, such a safety claim is
Vacco's office also objected to a Monsanto advertisement the previous year
showing a homeowner with his head in the soil and a dog standing nearby.
The announcer said, "Roundup can be used where kids and pets play,
and breaks down into natural material." Under the deal, Monsanto agreed
to remove the objectionable references from its advertisements in New York
state such as claiming the weed killers are "biodegradable" and
"environmentally friendly." The company also agreed to drop a
claim that "Roundup stays where it is put" and not compare the
toxicity of the weed killers with common household items like table salt.
At the same time a study renewed questions about a possible link between
aspartame and brain cancer, although the sweetener's principal manufacturer,
Monsanto Co.'s Nutrasweet Kelco Co., disputed the claims. In an article
in the Journal of Neuropathology and Experimental Neurology published
in October 1996, John Olney of Washington University in St. Louis cited
an increase in brain tumors following aspartame's introduction in 1981 and
called for more study to "reassess the carcinogenic potential"
of the product.
Dr. Olney, a longtime critic of aspartame, found no direct link between
aspartame and brain cancer. But he cited statistics on brain tumors from
the U.S. National Cancer Institute and an animal study to conclude that
the sweetener may have played a role in the mid-1980s in a rise in the number
of brain tumors, to an average of 53 per million people from 48 per million
in the 1970s. Monsanto maintains that aspartame is the most-tested food
ingredient in the world. An official at the Food and Drug Administration
said the agency has reviewed aspartame's safety 26 times during the past
23 years and reaffirmed the product's safety for use in food and beverages.
Aspartame is most commonly consumed in diet soft drinks.
Reporting on the controversial bovine growth hormone rBGH, which reportedly
increases a cow's milk production by one third, can be hazardous to a journalism
career, as two award-winning investigative reporters found when they found
the Fox-owned television station WTVT-13 in Tampa, Florida, would not broadcast
their findings that use of the hormone was widespread in Florida despite
promises by the state's supermarkets that they would not sell milk from
treated cows until the hormone gained acceptance by consumers. [See story
on page 12.]
The FDA approved the artificial hormone in 1993, but some researchers suspect
links to cancer. The hormone is banned throughout Europe and is unapproved
in several other countries because of human health concerns.
Whether consumers are to learn what food they serve on their tables is genetically
engineered, whether farmers will be forced to pay an increasing quantitative
and qualitative price for the right to farm in this new "agricultural
biotechnology revolution," whether the safety and the health of people
and the environment in which they live will become subordinate to the bottom
lines of the Monsanto's, DuPonts and Novartises are questions that now await
to be answered.
A.V. Krebs is director of Corporate Agribusiness Research Project, P.O.
Box 2201, Everett, Wash. 98202-0201; http://www.ea1.com/tiller/
The controversial bovine growth hormone rBGH, which reportedly increases
a cow's milk production, is defended by its manufacturer Monsanto against
fears of scientists who believe use of the hormone poses health risks to
milk drinkers. Jane Akre and Steve Wilson, two award-winning investigative
reporters at the Fox-owned television station (WTVT-13) in Tampa, Florida,
found out the hormone was to be defended at any cost.
Costs Reporters' Jobs
The husband-and-wife investigative team are blowing the whistle on a story
they allege WTVT and its corporate bosses preferred to cover up rather than
broadcast honestly and accurately. Although the story never was broadcast,
it was documented in a lawsuit the reporters have filed in Florida district
court. The lawsuit reveals the widespread use of the rBGH hormone that Florida
dairymen have been secretly injecting into their cows. The story, which
has been ignored by the nation's major media, is presented in full detail
at an Internet website: http://www.foxbghsuit.com
Although approved by the FDA in 1993, the artificial hormone has been linked
to cancer and is banned throughout Europe and several other countries because
of human health concerns.
The reporters found that Florida supermarkets quietly reneged on promises
not to sell milk from treated cows until the hormone gained widespread acceptance
by consumers. All major supermarkets now admit rBGH has found its way into
virtually all of Florida's milk supply.
The reporters, in their suit, allege that Monsanto pressured Fox television
(owned by Rupert Murdoch's multi-national News Corp.) not to broadcast the
story. They claim the TV station violated the state's whistleblower act
by firing the journalists for refusing to broadcast false reports and threatening
to report the station's conduct to the FCC. Their complaint also claims
the station violated the reporters' contracts in dismissing them for those
reasons and it seeks a ruling from the court to determine to what extent
the reporters' contractual obligations limit their ability to speak freely
about the rBGH issue.
The journalists filed the suit after struggling with Fox executives for
most of 1997 to get the story on the air. They say they submitted over 70
drafts of scripts, all of which were found "unacceptable" by the
station. According to court papers, they were ultimately dismissed December
"Every editor has the right to kill a story and any honest reporter
will tell you that happens from time to time when a news organization's
self-interest wins out over the public interest," said Wilson, the
station's former senior investigative reporter who helped Akre produce the
story and is now one of the plaintiffs.
"But when media managers who are not journalists have so little regard
for the public trust that they actually order reporters to broadcast false
information and slant the truth to curry the favor or avoid the wrath of
special interests as happened here, that is the day any responsible reporter
has to stand up and say, 'No way!' That is what Jane and I are saying with
this lawsuit," Wilson said.
"We are parents ourselves," Akre said. "It is not right for
the station to withhold this important health information and solely as
a matter of conscience we will not aid and abet their effort to cover this
up any longer," she said. "Every parent and every consumer have
the right to know what they're pouring on their children's morning cereal."
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