Monsanto and Pioneer Duke It Out Over Biotech Corn, Farmers Take the Hit
There is an old African saying "Whether elephants make love or war, the grass suffers." The two elephants in the agricultural seed business are now making real war, although they have been wary of each other for years. Monsanto, a relatively recent entry into the business, has become the "dominant male" in the battle after moving to acquire a large number of formerly independent seed companies. Pioneer, content for years to be the premiere corn breeder in the world, has found itself suddenly defending its turf and trying to find ways to move into the new biotech ball game. The Des Moines Register recently covered this ongoing saga.
Monsanto has long been targeted as a corporate villain. From dioxin-laced Agent Orange for Vietnam to the industrial chemical, polychlorinated biphenyl (PCB), Monsanto was known as producer of persistent, deadly chemicals. Lassotm, the alachlor-based pre-emergent grass herbicide with a long list of toxicity issues, was their first foray into agricultural chemicals.
Monsanto's bottom line was being hurt by lawsuits and clean-up costs associated with dioxin and PCB pollution. Enter RoundupTM (glyphosate), launched in 1976. This is the chemical that made Monsanto the powerhouse it is today. Glyphosate is a broad spectrum nonspecific herbicide that has low acute toxicity and does not persist in the environment. It should be noted however that many questions remain regarding the long-term toxicity of glyphosate.
By 1982 they had the first genetically modified plant cells. Depending on definitions, humans have been genetically modifying crops for thousands of years. More correctly, these are termed transgenic crops, which involves inserting a gene that is not acquired by pollination. I have used genetically modified (GM) because it has become the standard term. Now plant life is patented, permitting GM companies to control technology, and prohibit use of seed from the GM crop.
In 1926, Henry A. Wallace and others founded the Hi-Bred Corn Company in Des Moines to develop and market the expanding hybrid seed corn business. Pioneer was added to the name in 1936. They moved into soybean seed operation in 1973, and soon became the leading corn and soybean seed producers. Pioneer gained the number the one corn seed sales spot in 1982 from its longtime rival, Garst. Pioneer, when I first came to the Leopold Center in 1988, was a family company: friendly, environmentally aware and benevolent. Its advances were based on classic plant genetics, not biotechnology. It was not to last.
Monsanto bought its way into the seed business by acquiring established companies including the number two seed corn producer, Garst. This predatory approach (Monsanto often paid more than market value for the seed companies) combined with its big breakthrough-developing genetically modified corn and soybeans resistant to glyphosate-gave them a huge market advantage. This initiated the trend to GM crops that is now dominant in the seed industry.
The predator habits of Monsanto long made Pioneer nervous. Patented Roundup Ready soybeans were first introduced by Monsanto in 1996. One year later, Pioneer had biotech corn and soybeans on the market, buying the technology from Monsanto. Pioneer Hi-Bred was purchased by DuPont (20 percent in 1997 and the remainder in 1999). Lawsuits began soon after.
By 2000, corn borer protection had been added by Monsanto (called YieldGardtm) and Pioneer had to enter into agreements to use the Monsanto technology in its corn. Pioneer paid big bucks to use the Roundup Ready and YieldGard traits. Now Monsanto is suing Pioneer over infringement of these patent rights and Pioneer is moving ahead with a new set of seed traits called Optimum GAT. Monsanto saw red, and has countersued. Monsanto also became very unhappy when Pioneer recently co-sponsored an anti-Monsanto seminar in St. Louis, the home of Monsanto. The issues are complex, and involve "stacking" of seed traits. This means that genetic characteristics for two or more traits are included in a single seed. Often these stacked seeds have not had full evaluation regarding their safety and efficacy. In the meantime, Pioneer slipped to No. 2 in seed sales.
Monsanto now licenses these traits to about 200 seed companies. Their powerful monopoly has blocked competition. They will not even allow experimenters to evaluate the seed corn for efficacy in other environments.
During this time, the price of seed corn and Rounduptm escalated rapidly. But now Monsanto is starting to lose money on its Roundup herbicide, mainly because it is off patent and others are now undercutting Monsanto on price. Furthermore, the pent up demand for glyphosate in South America had raised prices earlier, but this market now is being met.
So what does all this mean? I first encountered Monsanto in the early 1970s when at a regional research meeting in St Louis they invited the committee to tour their operations. At that time they were just getting into biotech and no one really saw its potential to make money.Then, about the time I was getting the Leopold Center programs underway, Roundup Ready soy field trials were under way on a site east of Ames. I had a tough decision to make on funding for field work that might involve GM materials, and decided we would not fund such work, but it soon became hard to delineate the lines between GM and non-GM. When Pioneer went over to Roundup Ready, and then both companies began stacking genes, I knew the game was lost.
Genetically modified corn and soybeans dominate, especially in countries with high input agriculture. Claims that GM crops will "Feed the World" abound, especially around the time of the World Food Price presentations earlier this month. Other claims include the lowering of pesticide use and lessening of soil erosion.
Monsanto now bills itself as a Sustainable Agriculture company!
These are issues deserving of future blogs. I worry about how the world's farmers are being shortchanged in the quest for improved and adapted seed varieties at reasonable costs. Now they cannot save seed for fear of the Monsanto cops taking them to court and ruining their lives. The seed industry is no longer competitive because about 90 percent of it is in the hands of two companies and the cost of seed is out of reach of small farmers. I worry about how the food system is now dependent on genetically engineered corn, soybean, cottonseed, canola and sugar beets (recently taken back off of the market). GM wheat, rice and other staple crops could follow as pressure continues to adopt these crops. The industry essentially says "We build it, you will use it."
We need to be smarter about these crops, question each claim and insist the government enforce antitrust laws. We should resist the claims that they will solve the food shortage in countries where their use will do more harm than good. Specifically, this means the next food frontier, Africa, must not become a new "Green Revolution" based on the failed western world high technology model, rooted in GM crops.
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