13 August 2002
MONSANTO CHANGES HORSES AS GM SEED BIZ GOES LAME
"The moral to the current Monsanto story is clear. GM wheat is the least of Monsanto's problems. Talking about wheat, however, deflects public scrutiny of the most pressing problem--the need to bribe farmers to continue to purchase current GM seeds in an increasingly skeptical marketplace."
Monsanto changes horses as GM seed biz goes lame
THE FINAL WORD Issue 10 Aug. 9, 2002 (excerpt)
On July 29, GM seed giant Monsanto made public what everyone already
knew: Nobody wants its still-in-the-bag GM wheat seed. Not American
farmers. Not foreign customers. Not anybody.
That's tough news for Monsanto who planned to debut the seed in 2005. But the maker of such American icons like Astroturf, Agent Orange and Roundup herbicide, knows how make lemons into lemonade.
The wheat shortcoming, Monsanto explained, affords the company an important opportunity to alter its approach to GM technology. Instead of building biotech wheat aimed at farmers, it now plans to build biotech wheat aimed at consumers. The switch essentially means Monsanto believes the trouble with bio-wheat is marketing, not the technology itself. As such, the company will design GM wheat varieties that sport "enhanced health, taste and texture traits to appeal to food companies and consumers and hopefully open up world markets to the controversial grain," explains one Reuters dispatch.
It's a logical step for the company that gave the world Roundup Ready soybeans, Bollguard cotton and Bt corn, products U.S. farmers have adopted swiftly because of their convenience. Monsanto's wheat announcement simply means it is carrying out biotech's long-planned two-step strategy earlier than scheduled.
Never hear of the biotech two-step? It goes like this:
Step 1.) Hook farmers on biotech seeds to penetrate, then flood, global
food markets with the controversial technology despite market or
consumer misgivings. That's worked well as American farmers now plant
nearly 80 percent of their soy acres, over half of their cotton acres
and 25 percent of their corn acres with bio-seed.
Step 2.) Once the world can no longer avoid the technology, introduce specific traits to the seeds that enhance company profits. For instance, once the world has no real choice but biotech crops, then sell expensive seeds to grow crops that cure blindness, make better pasta or wash the car.
Just kidding about the car. Maybe.
The beauty to the strategy is that producers and consumers will have to pay extra for the technology whether they want it or not because GM is all there is.
Despite what its wheat woes may mean, Monsanto quietly has been busy on another far-more-important front that shows bigger problems with its GM seeds.
Beginning in early August--the typical kick-off month to the succeeding seed-selling season--Monsanto began offering 2003 corn seed to Iowa farmers at bargain basement prices. According to farmer-seed salesmen, Monsanto is cutting its per-bag technology fee on Bt corn from $24 to $9.50.
Additionally, according farmer sources, Monsanto is slicing its $42-per-bag tech fee to $22 on its stacked gene varieties (Bt plus Roundup Ready) of seed corn.
Why the 2003 fire sale in 2002? Two reasons, says one farmer-seedsman.
"First, the seeds are overpriced for what they deliver, especially in today's cheap corn market," he noted. "Farmers can't afford the technology now that they know what it will do and what corn prices are."
Second, Monsanto is hoping to cling to its seed marketshare as other competitors nip away with new seeds and more consumers wonder about the need of biotech food.
"I sell the seeds," says one farmer, "but I don't plant 'em because I'm not convinced the world needs or wants biotech. We know our best export customers like Japan and Europe don't want them. Why should we grow 'em?"
Monsanto's current answer to that pregnant question is because it will sell the seed cheap, not because GM is what you want or the world needs.
But the price-cutting carries a steep price--poorer profits for Monsanto, which recently said sales for its first six months of 2002 fell $500 million below a year ago. In addition, the biotech seed leader just wrote off $154 million in uncollectible Argentine debt because farmers there simply can't pay.
Worse, Monsanto admitted that recent changes to past accounting practices caused it to lose $1.6 billion in its first six months this year.
The moral to the current Monsanto story is clear. GM wheat is the least of Monsanto's problems. Talking about wheat, however, deflects public scrutiny of the most pressing problem--the need to bribe farmers to continue to purchase current GM seeds in an increasingly skeptical marketplace.
© 2002 ag comm
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Guebert's regular column, the Farm and Food File, is published weekly
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