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."

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Monsanto changes horses as GM seed biz goes lame

THE FINAL WORD Issue 10 Aug. 9, 2002 (excerpt)
Alan Guebert

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

The Final Word comes to you each Friday by special arrangement. Alan Guebert's  regular column, the Farm and Food File, is published weekly in more than 70  newspapers around the US and Canada. Contact him at AGuebert@worldnet.att.net.
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