The Monsanto Monopoly
Is control of the global food system their next target?
Philip Howard, a researcher at Michigan State University, has traced the consolidation of global seed industry. He says that that as four firms control 40% of supply it can no longer be regarded as a competitive market.
It gets worse. The “big four” biotech seed companies—Monsanto, DuPont/Pioneer Hi-Bred, Syngenta, and Dow AgroSciences—own 80% of the US corn market and 70% of the soybean business.
This should be called a cartel because it certainly isn’t a market.
Of course the companies would dispute this because they say that they do have different products and they do compete with each other.
But if you consider that Monsanto - the largest and the best known – licenses its genetically modified traits to other seed companies and as a result, more than 80% of US corn and more than 90% of soybeans planted each year are attributable to Monsanto then monopoly comes to mind.
Of course Monsanto and the others reject this perspective but it is hard to escape the idea that such control in few hands is not how a market is meant to work and the situation is ripe for some anti-trust action by government.
Department of injustice?
In fact, The US Department of Justice (DOJ) investigated Monsanto’s dominance of the seed market after holding public meetings in 2010. But at the end of 2012, DOJ announced it had “closed its investigation into possible anticompetitive practices in the seed industry.”
Diana Moss, vice president of the American Antitrust Institute, voiced her concern; “To have a two-year investigation and close it without a peep in our view does a disservice.”
That is something of an understatement.
Difficulties for farmers
The monopolisation of the seed supply by a few companies has led to two major problems for farmers.
The first is the removal of choice. The pushing out of the marketplace of conventional and older seed varieties and their replacement by genetically modified seeds backs farmers into a corner, making it nearly impossible to grow conventional crops, even if they want to. This has the knock on effect of reducing the genetic diversity in staple crops- making the risk of catastrophic destruction of food crops by disease or climate a very real threat.
The second major change that farmers are feeling is the hike in seed prices- and this is a very serious consequence for famers of GMOs globally, and because non-GM seeds are phased out by Biotech seed companies, these higher prices are unavoidable.
Industry domination is also aided by weak antitrust law enforcement, and court decisions that allowed GM crops and other plant materials to be patented, while prohibiting seed saving by farmers. The companies, particularly Monsanto, are well known for their aggressive methods of enforcing the protection of their ‘intellectual property’ by suing farmers.
It is reported that farmers have gone bankrupt as a direct consequence of having an accidental presence (caused by wind dispersal/spilt seed/cross contamination) of GM crops on their farms.
The risks associated with GM are multi-faceted. GMOs raise concerns about environmental impacts, health concerns, and freedom of choice, among others. But the one issue that really sticks in people’s throats is corporate control of the food supply, and GM would not exist without it.
The power to silence
These companies are also aggressive in their approach to independent safety testing. Monsanto has the authority to restrict independent scientists’ study of genetically modified seeds, as they say it is a ‘patent infringement’.
This issue concerns some scientists so much that they want this authority reversed, and so have put together a case to be heard by the US Supreme Court. The scientists argue that failure to allow independent testing means that critical questions regarding the technology are not answered, and relying on industry studies for health and environmental impacts is not a sensible option.
A number of American Universities side with Monsanto however, and do not want this authority reversed, as they reckon it will stifle research because patenting is a good financial incentive for private companies to invest in University research. But George A. Kimbrell, senior lawyer for the Center for Food Safety and Save Our Seeds, calls the universities’ stance disappointing. “It’s a very strange position for institutions that should be promoting the freedom of scientific inquiry,” he says. “Unfortunately, they’ve become beholden to the money and put that before their basic mission.”
So the introduction of GM has led to seed monopolies and the suffocation of research but the most direct effect on farmers is the hike in seed prices since the introduction of GM.
Charles Benbrook, research professor at the Center for Sustaining Agriculture and Natural Resources, Washington State University, noted that as GM soybeans started to take over the market (2000-2010) the price for seed increased 230%. The cost for Monsanto’s Roundup Ready2 soybeans in 2010 was $70 per bag, a 143% increase in the price of GM seed since 2001.
According to the US Department of Agriculture’s Economic Research Service, the average per-acre cost of soybean and corn seed increased 325% and 259%, respectively, between 1995 and 2011. This is corresponds to the time period when acreage of GM corn and soy grew from less than 20% to more than 80-90%
The plants do not command a higher price once they are grown, and the savings promised by biotech companies due to a reduction in pesticides have not come to fruition. Many GM farmers have had to increase pesticide use due to the emergence of resistant weeds and pests, and all this results in is farmers being squeezed by higher costs with less returns, and unable to get off the GM treadmill because of fear of infringing ‘intellectual property rights’ by having residual crops in their fields.
Then there are the statistics from Consumers International; an estimated 270,000 small-holding farmers in the Philippines are being forced to grow GM corn and ending up in debt. The cost of corn seeds has risen 282% from its introductory price and accounts for 18-21% of a farmer’s total cost of production. It is often farmers in developing countries that feel the impact of these prices most keenly. Farmers are at the mercy of seed suppliers and lenders who are one and the same in the Philippines and refuse to provide lending unless the farmers grow GM corn.
In India, reports are emerging about the impacts of Bt cotton (a type of GM crop) and its impact on farmer suicide rates. Although the suicides cannot be entirely blamed on GM as they started before its introduction, it has certainly exacerbated the problem, according to an advisory from the Indian government, which stated, “Cotton farmers are in a deep crisis since shifting to Bt cotton. The spate of farmer suicides in 2011–12 has been particularly severe among Bt cotton farmers.”
One thing is for sure; the impact of GM crops is very complex and is not simply limited to those that approve and those that don’t. The unanswered health and environmental questions about this technology are serious enough in their own right, but add to this the financial burden of the GM treadmill on farmers and the suffocation of independent research and the possibility of real answers from it, and the overall picture is a frightening one.