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Posts Tagged ‘Monsanto’

When Monsanto buys into a market they buy in big.

In 2005 Monsanto’s seed/genetic trait holdings were primarily in corn, cotton, soybean, and canola. That year they purchased Seminis, the world’s largest vegetable seed company (see And We Have the Seed) specializing in seed for vegetable field crops.

Now their takeover of the vegetable seed sector continues, as they have announced the intent to purchase the Dutch breeding and seed company, De Ruiter Seeds. This purchase diversifies Monsanto’s seed holdings in vegetable field crops (Seminis) to “protected culture” fruits and vegetables (primarily tomatoes and cucurbits produced greenhouse, hothouse, etc). Analysts from Bank of America say that this gives Monsanto 25% of the world vegetable seed market, but I believe that this is a low estimate. (I contacted both Monsanto and the BofA analysts to ask for their data but they did not respond to my emails.)

In 1998, according to their own figures, Seminis already controlled 26% of the overall global market in vegetable seeds, 39% of the US market, and 24% of the European market (Seminis. 2000. Seminis Annual Report—Fiscal Year 1999. Saticoy, CA: Seminis, Inc.). This is ALL vegetable seeds, but in their specialties – tomatoes, peppers, cucurbits, the percentage market share is much higher. A case filed by the US Government against Seminis in 2000 stated that they controlled 70% of the US fresh tomato seed market (the case was regarding an anticompetition agreement that kept a Israeli company from competing in the US tomato seed market. Syngenta initially lost in the federal district court case, but won in the Court of Appeals for the Ninth Circuit) And in 2005, at the time of the Monsanto acquisition of Seminis, I spoke with a tomato breeder for Seminis who estimated that they had 75% control of the overall US market.

With the De Ruiter protected-culture varieties they may hit 85% control of the total market, and that could increase considering the trend in expansion of hot house tomato production.

Hello, Department of Justice, do we have an antitrust case now?

I know it’s not corn, but fresh market tomatoes (FRESH, not including processing) was an industry worth over $4 billion (again, according to US Attorney General Documents). Tomatoes were the 9th most important agricultural food products in 2005 (and this against animal products) and the 4th (after corn, soybeans, and wheat) of food crops (non-animal).

De Ruiters is a Dutch company, so I believe the sale is outside of US DOJ jurisdiction. The Directorate General for Competition of the EU will likely not interfere, as Monsanto doesn’t own enough of the EU vegetable seed sector. There remains no cohesive international method for regulation on a global scale, which is wonderful for these global corporate firms.

One company with this much control in one of the largest agricultural markets in the US? Some economists use “The Rule of 3” – that a monopoly exists in a market if there are not a  minimum of 3 competing companies . There are certainly more than two other tomato seed companies out there, but with what kind of market share? Do any of them have 10%? What about 5%? Scale is a requirement for competition. So who is competing with Monsanto on tomato seed? The rest of the market is a quilt work of tiny companies in comparison to what Monsanto has created in under three years with a handful of quick and unregulated acquisitions.  Added to their seed concentrations in other crops, and given that food production starts with the seed, there should be no question of who controls our food supply. The only question is – will we do something about it?

I have to hope that the right administrative change will usher in the potential for a stronger Justice Department. At this point Obama has had the strongest voice in calling for greater government regulation of industry (primarily in reference to tightening up Wall Street). Regardless of who wins, we need to get farmers, food companies, and citizens working in concert to make congress, the executive branch, and Justice to hear our concerns about unregulated agricultural mergers. 

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There have been two recent public letters to Hillary Clinton from an old college alum that point to her historical ties with large scale corporate food – Tyson, Walmart, and Monsanto. They’re very informative. Here they are:

Letter One

Letter Two

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Fedco Seeds, a fantastic cooperative seed company from Maine that specializes in fresh market varieties for the Northeast, has reported GMO contamination in two of their sweet corn lots. The 2007 Feco catalog identifies varieties Tuxedo and Lancelot (both are hybrid varieties) as testing positive in random sampling. 

It’s tough to find information on their web site on this, but on page seven of their catalog they do a nice job of describing the situation. You can go HERE for a PDF of the Fedco catalog and scroll down to page seven.

Fedco has taken the Safe Seed Pledge, tests their varieties for contamination , and is run by some of the best seed people in the business. CR Lawn is a seed wizard and works with great staff like Roberta Bailey and Nikos Kavanya. Thanks for all your work guys.

Also, an update from Fedco on the Seminis-Monsanto issue. Two years ago when I reported on Monsanto’s buyout of Seminis, many seed companies were in a bit of a dilemma. Seminis has some great varieties that their customers have grown to love, but many of their customers also weren’t fond of Monsanto. Fedco decided to work diligently to replace their Seminis varieties with equivalent genetics. CR Lawn writes of the progress towards replacement :

So How Are We Doing? Two years ago when Monsanto bought out Seminis, we decided to phase out our Seminis line. ..At the time of our decision, Seminis was our biggest supplier, accounting for 70 varieties and more than 11% of our gross sales. We set about, through our research and trials, to replace the Seminis selections with the best varieties we could find. In two years we have fulfilled exactly half our quest. For 9 of the varieties we have found alternate sources and for 26 more we have found comparable or superior replacements. We pledge to persevere. Some niches will be easier and quicker to fill than others.

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Warning – this is not objective reporting and contains cynicism and sarcasm. But then again, who needs objectivity, not our Federal agencies…read on….

On September 26th Monsanto announced the “Biotech Yield Endorsement Program”(BYE), a partnership with the Federal Crop Insurance Corporation (FCIC) which will give a 20% discount on crop insurance premiums to farmers who plant Monsanto varieties that feature YieldGard Plus with Roundup Ready Corn 2 or YieldGard VT Triple technologies. In recent days there have been a slew of new press releases and articles on this (it is time to be buying your spring seed you know).

Before I get into this and complete blow a gasket, let me first key you in on the mission of the FCIC. From the FCIC web page:

The Federal Crop Insurance Corporation (FCIC) promotes the economic stability of agriculture through a sound system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance.”

Product not Practices, and Protocols without Public Oversight

The big news isn’t the USDA having a partnership with Monsanto, as they already hold a joint patent on Terminator Technology with the seed company, but rather that it is the first time that the FCIC has allowed a premium discount for a specific commercial product. Normally the FCIC supports farmers making good decisions in practices, that is minimizing risk by choosing the best strategies in irrigation practices, pest management, harvesting or processing, and so on. Product premiums are a bit odd. If John Deere makes a cultivator that leaves less of the harvest for the field mice (thus reducing risk of loss), should farmers get a discount on their crop insurance for using the new model? Is the FCIC really going to go into the product endorsement business?

On September 26th I called FCIC to confirm that this tax-payer funded, federal insurance program, administered under the US Department of Agriculture was indeed offering such a program. FCIC Board Executive Secretary, Brent Doanne, did confirm that this was a first for the organization, but noted that section 1523(D) of the Federal Crop Insurance Act allowed for the development of discount policies if a company could prove that their product clearly demonstrated reduced risk in the field. In this instance the FCIC board allowed for Monsanto’s field trial data to stand as sufficient evidence of clear demonstration; third party verification that the biotech products really reduce risk and maximize yield wasn’t necessary according to Mr. Doanne. But, as he said, “They have thousands and thousands of acres of data.” And hey, big numbers always means good science.

Let’s outsource regulation to the private sector!!

Yes, yes, the government has spent billions of dollars creating agencies to manage regulatory oversight of our environment, public health, economy, and so on. But people still get sick and rivers get polluted, so maybe they haven’t done such a good job. In fact, they’ve done such a bad job let’s go ahead and hire someone else to do it for us. Besides, we can’t afford to spend tax-payer money on regulatory testing – as we have the newly approved energy bill and the oil industry needs that $13.5 Billion in taxpayer funded incentives that the new Energy Bill provides because they only made $35 billion in NET profits last year. Let’s outsource regulatory oversight to people who know how to make money, not spend it, like those government bureaucrats.

Okay, enough sarcasm. The reality is that the FCIC trusts the Monsanto generated data, but they are going to keep their eyes open. Mr. Doanne did say that the FCIC will monitor yield for several years to determine if Monsanto’s products really do result in reduced yield risk. I find this to be an odd regulatory protocol, kind of like buying a mail order bride isn’t it? Not sure what you’ll get but boy they say she’s a beauty, so let’s trust em. Just as the FDA and other federal agencies are now trusting corporations to verify their products efficacy and safety (and isn’t Vioxx great? And nah, OxyContin isn’t addictive), so now another USDA agency continues to avoid regulatory responsibility. They ignore not only their public duty, but deny the immense economic benefit that unregulated approval of these products has for the corporations whose revolving doors they sashay in and out of like belles at the ball.

What? Benefit to Monsanto?

As states such as Iowa launch anti-trust investigation into Monsanto marketing practices the FCIC has in one fell swoop approved a policy that will result in an obvious marketing advantage to the company that already dominates the corn market. In addition to calling Mr. Doanne I also tracked down Curt Sindergard. Mr. Sindergard is a FCIC board member, and Iowas soybean and corn farmer, and seed dealer for DeKalb – which is of course owned by Monsanto. Mr. Sindergard told me that the FCIC board does not see this as favoritism to Monsanto in that other seed companies may petition for similar discount programs. “Monsanto invested a lot of money and time in getting this approved by the (FCIC) board. Other seed companies, competitors to Monsanto, will likely benefit from the precedent and put their own traits forward for similar programs.”

Mr. Sindergard also noted that this will benefit biotech usage, and that the usage of any technology that reduces risk of yield loss is a good thing for farmers. As he put it, “We (FCIC Board) see this as a way to support future enhancement of biotech traits.” Is this the FCIC mission? To support particular technologies? I thought they were in the insurance business. Oh yes, but the insurance business often colludes with the pharmaceutical sector in human health, why not in agricultural systems? Could it be that having a representative from the biotech seed sector on the FCIC board, such as Mr. Sindergard, is just a tad bit inappropriate? Just what does he know about insurance? Economics? Research? Here’s his bio: http://www.rma.usda.gov/fcic/sindergard.pdf

I suppose being a deacon he does have some insurance background. Plant your seeds and say your prayers.

But Hey, the FCIC gives Organic special treatment too

Meanwhile organic farmers are forced to pay an additional 5% surcharge for federal crop insurance, but are paid out on claims at conventional crop values as opposed to the higher, true, organic market value. When I asked Mr. Doane about this surcharge he said that it was, “Necessary because of the higher risk associated with organic farming.” When I pressed him to document that additional risk with research he said that the FCIC was still collecting data to determine just how high the level of risk was from growing organically. Well thank goodness they’re doing their regulatory homework and spending our dollars researching the dangers of organics. In other words organics is presumed guilty of being a substandard system of production with higher risk until proven innocent, whereas industry driven biotech claims are taken as the gold standard of acceptable research? Does the FCIC have an organic or low-input agricultural representative on their board? No. At least not until Monsanto goes organic.

 

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