by GRAIN | 15 Mar 1997

March 1997



Concern is mounting worldwide over US chemical giant Monsanto's latest maneuvers to enhance its control over agriculture and the food system. In 1996, US farmers harvested their first crops of Monsanto's Roundup Ready® soybean on the heels of Bollgard cotton, both genetically engineered. Over in Europe, consumers started protesting against imports of the transgenic soybean harvest from the US. Worldwide, people are stunned by the contractual arrangements US growers are being drawn into by Monsanto. And in the meantime, Monsanto is making new forays into wiping out competition in the corn and soybean seed markets, while it eagerly eyes rice, potatoes, sugar beets and oilseed rape in major producing markets.


Monsanto is making a kill in the agricultural sector at present. One of the first large agrochemical concerns to invest heavily in biotechnology from the early 1980s, it is now sharpening its teeth for the payoff. In 1995-1996, Monsanto brought its first genetically engineered crops into farmers' fields in the Unites States:

* Bollgard® cotton, carrying a gene isolated from the soil microorganism Bacillus thuringiensis (Bt) which is toxic to certain insects

* New-Leaf® potato, also carrying a Bt gene against Colorado potato beetle

* Roundup Ready® soybean, carrying the RR gene which is engineered to help plants withstand applications of glyphosate, the active ingredient in Monsanto's Roundup herbicide

Up and coming are YieldGuard® corn engineered to resist the European corn borer, Roundup Ready® canola, corn and sugar beets, more Bt crops and NewLeaf® Potato Plus which resists both leaf roll virus and oil in the frying pan (it absorbs less fat during cooking).

The Roundup Ready® soybean is turning into the epitome of many people's concerns about genetic engineering in agriculture and corporate control of the food system. While it has only been through one cropping season, the soybean symbolises many things that take agriculture in the opposite direction of farmer empowerment and sustainability.

Are you ready: the technology control

Roundup Ready® crops are genetically engineered to tolerate glyphosate, the active ingredient of Monsanto's Roundup herbicide. Glyphosate is a broad-spectrum herbicide, meaning it kills any plant it falls on. The alleged advantage of glyphosate over other herbicides is that it binds tightly to the soil particles where it falls, so it shouldn't travel widely from the field where it was sprayed. However, numerous experiences prove this isn't necessarily the case. A big disadvantage of glyphosate is that it destroys anything green, so farmers have to use it before crops emerge and resort to more selective herbicides later in the season.

Glyphosate is marketed under many formulations, some of which are very toxic to animals and humans. Monsanto's Roundup is generally considered the least harmful, although residues of Roundup have been found in crops planted a year after fields were treated. Roundup is also blamed by farm workers and landscape maintenance labourers as the cause of their health problems. Monsanto is proud to boast that Roundup is the most heavily screened herbicide in the world. It should be. It has been on the market for 20 years, is the world's best selling herbicide and provides17% of the company's annual US$ 8.6 billion sales. In the first nine months of 1996, Monsanto's worldwide agrochemical sales increased by 21% to US$2.48 billion, due largely to increased sales of Roundup...

Monsanto's longtime patent monopoly on Roundup will expire in 2000, so the company could lose its clamp on those sales very fast. Enter biotechnology. By having a gene from a microorganism inserted, crop plants can now be showered directly with the chemical. The idea, for Monsanto, is to extend the market life of Roundup beyond the patent. By creating crops tailoured to withstand Roundup, Monsanto will keep its herbicide sales secure.

Because of the inbuilt profits for Monsanto, the Roundup Ready® gene will find its way into a broad range of crops: Roundup Ready® cotton seed will be marketed on a large scale in the US this year, Roundup Ready® corn is in the pipeline, Canadians started growing Roundup Ready® canola last year, and Monsanto wants to market sugar beets, rice and other crops hungry for its herbicide.

Many observers are not so happy with this technology. For one, Monsanto claims that genetically programmed herbicide tolerance in crops will lower the use of weed killers on the farm. There is nothing behind this promise. In fact, the opposite could happen. Glyphosate is supposed to degrade rapidly in the environment. Therefore, farmers growing Roundup Ready® crops could be tempted to use more and more applications — convinced that their crop won't be harmed — as weeds emerge after it degrades. Also, as glyphosate will be sprayed directly onto crops now by Roundup Ready seed users, it could affect neighbouring fields through air drift. This could induce other farmers to switch to the Roundup Ready® product line to protect their crops from the drifting plant killer, thereby increasing overall glyphosate use in agriculture.

Are you ready: the farmer control

Monsanto obliges any farmer buying Roundup Ready® soybean seeds (and presumably other Roundup Ready® crops as they come to market) to sign a Growers' Contract. The contract lays down astonishing constraints on farmers.

One season's planting only: Farmers who buy Roundup Ready® soybeans are only allowed to sow them for one cropping season. Soybeans can normally be saved from harvest and used for the next planting. Soybean seed saving is even promoted by farmers organisations in Europe as a means of cutting costs. Monsanto will not tolerate this and farmers have to promise not one seed will be resold or saved from their harvest for replanting, research, sale as seed, genetic analysis or reverse engineering. This is the end of the breeding and marketing line, as far as Monsanto is concerned.

Post harvest responsibility: The farmer is responsible for ensuring the above rules are not broken by anyone within three years of purchase of the seed. This means that anyone the farmers sells his/her harvest to has to follow the rules _ or else the farmer gets penalised! And the penalty is enormous. Monsanto will seek retribution of damages equal to 100 times the value of the Roundup Ready® gene multiplied by the number of seeds involved in the infringement plus "reasonable" attorney's fees and expenses (presumably at Monsanto rates). Thus, if the Roundup Ready® gene per se represents US$ 5 per 50 pound bag of seed, a farmer deemed liable for any of the prohibited acts would have to pay US$ 500 for every bag of soybeans plus the legal charges. That a farmer should be responsible for the use of his/her crop for three years after marketing is a shock alone. That it carries such a financial burden, likely to increase, is bordering on the unthinkable.

Roundup only: The Growers' Contract stipulates quite clearly that only the Roundup formulation of glyphosate may be used on the crop. Monsanto's seeds can only be treated with Monsanto's herbicide - by force of law now.

Monsanto police: Farmers who sign on to grow the soybean are obliged to allow Monsanto representatives inspect and test their fields to ensure the contract is being complied with. The contract does not say that the farmer must be present at inspection time. Monsanto's right to police farmers holds for three years after purchase of the seed.

Post farmer responsibility: The obligations of the agreement are fully binding on all heirs, representatives, successors and permitted assigns of the seed buyer. However, the farmer cannot transfer his/her rights under the contract to anyone without Monsanto's explicit agreement.

The Farmers' Legal Action Group in the US has analysed the contract and comes to further conclusions. The word research is not clear in the contract and could mean that farmers and buyers of their crop cannot engage in product development (watch out for processed items like "Herbie Happy Tofu"). Also, Monsanto can claim damages for patent infringement far beyond the "unauthorised use" laid out in the contract itself. Perhaps most disturbing, there is no performance guarantee in the Growers' Contract. Monsanto buoyantly promises all sort of great results from Roundup Ready® soybean in its promotional materials: high yield, effective weed control, no residues, adaptability to all tillage systems, etc. None of these claims appear in the agreement Monsanto makes growers sign.

Are you ready: the market control

The technology clearly works to the advantage of Monsanto sales, whatever the debate over environmental considerations (see table). The patent and the growers contract remove further doubts over how the company can make millions from sales. But there are further elements to ensure market control over the Roundup Ready® crop portfolio.

Monsanto has refused any call for segregation or labeling of its genetically engineered crops, and has obtained full backing of the US government. This has raised a squalor in Europe, where no less than 40% of the US soybean harvest ends up. Although the European Union has given its approval for importation, consumers and environmentalists are protesting against the mixing of Roundup soybeans with ordinary soybeans which will end up in all sort of food stuffs. Already, the German branches of Nestlé and Unilever promised to heed consumer concern and cancelled their orders for US soybeans, amounting to 7% of American soybean exports to Europe.

The debate on segregation can be confusing. Monsanto insists that it is impractical and unnecessary to separate the harvest from Roundup Ready® growers and the others. Yet the company is banking on its legal right, through the Growers' Contract, to pursue misuse of the harvest. If all harvested soybeans are mixed in the US, how can Monsanto trace misuse of its beans with its gene? If importing countries rule against transgenic soybean, for whatever reason of health and safety, then Monsanto will certainly have to find a way to segregate, unless it wants to fall out of the market altogether.

Monsanto and the rest of the biotech industry have also argue bitterly against any logic of labelling products derived from transgenic plants in any conspicuous way. Consumers are the key to the life of these companies. Special attention to transgenic foods could put a damper on sales, especially in Europe and Japan. While consumers want to be informed, the companies lobby governments against any special labelling (see box).

Labelling and the Codex Alimentarius

Right now, the biotech industry is pushing the Codex Alimentarius _ a set of international regulations on food standards, administered through the UN Food and Agriculture Organisation _ to prohibit special labelling of genetically engineered food products wordlwide. Codex has been chosen by the World Trade Organisation to act as its reference point for standards in food trade. If Codex is successfully lobbied to ignore consumers calls for labelling of biotech food, then the WTO will make sure this is implemented in international trade.

If that makes sense, people might be surprised that Novartis, the merger of Sandoz and Ciba-Geigy in Switzerland, has recently announced that it will voluntarily label all of its transgenic products, including seeds. The reason is not a soft heart for consumers but a publicity ploy. Switzerland is about to vote a referendum for or against genetic engineering. If the result is negative, Novartis and others would feel embarrassed by its home country. Therefore, voluntary labelling (here today, gone tomorrow?) is an attempt to turn the vote by making Swiss fears seems unreasonable now.

Finally, Monsanto is high on its transgenic horses and is moving fast to snuff competition from other companies. In a dramatic shopping spree now two years in the running, Monsanto has bought an amazing amount of shares in seed and biotech companies. These purchases are astounding: for the consolidated cost, for the market shares they confer to one chemical interest, and for the synergies that Monsanto will now reap between seeds and sprays. Monsanto was never a big presence in selling seeds. But through biotechnology, as NGOs have always predicted, the company can genetically programme seeds to need proprietary chemicals. Buying the seed companies to deliver the full technology package (genes + toxins) is just logical. Monsanto is taking this logic to today's limit.

Monsanto's mad shopping spree

By February 1997 Monsanto had bought:

* a 49.9% stake in Calgene for US$ 80 million in 1995 and an additional 6.25 millions shares in December 1996, bringing Monsanto's ownership to a majority 54.6%;

* a US$ 158 million chunk of DeKalb's stock (10% of its voting stock of and 43% of its non-voting stock) in early 1996; DeKalb is among the United States' top seed companies;

* biotech heavyweight Agracetus from WR Grace for US$ 150 million in early 1996; Agracetus holds major patents of interest to Monsanto;

* US$ 25 million worth of Bt technology from Ecogen in early 1996 (including US$10 million shares in Ecogen's common stock);

* Asgrow Seed Company for US$ 240 million in late 1996; Asgrow holds about 18% of the US soybean seed market and thus turns from competitor to Roundup Ready® delivery mechanism;

* Holden's Foundation Seeds for a whopping US$ 1.02 billion or nearly one-fifth the value of the entire planet's commercial seed industry;

* Holden's is the humble supplier of some 35% of the American maize industry's breeding lines.

The Holden purchase is like buying one of the best genebanks in the world, if genebanks were normally for sale. On December 2, 1996, the investment banking firm Dain Bosworth predicted in a report the sale of Holden and estimated the price at $300-500 million: "Holden's high price has very little to do with Holden as a seed company and a lot to do with the battle between chemical giants for future sales of herbicides and insecticides. (...) If Holden Foundation Seeds is worth $300-500 million, then we only dare to think what Pioneer Hi-Bred, DeKalb Genetics and Mycogen are worth."

But remember: Holden went for more than $1000 million which is 23 times Holden's annual sales. As Bill Freiberg — editor of Biotech Reporter — noted: "Big ag company profits will need to be squeezed out of farmers, one way or the other. And there's only so much blood that can squeezed out of the proverbial turnip."



On December 18, 1996, the European Commission has approved the commercialisation of Ciba Geigy's (now Novartis) Maximiser® maize for all uses. This maize has been genetically modified to be resistant to the European corn borer, the herbicide gluphosinate and the antibiotic ampicilline. The minutes of the European Commission's meeting leaked to the press and uncovered that the decision was taken on the grounds of avoiding a trade war with the USA, in spite of potential health and environmental negative impacts.

The reaction of Member States - thirteen of which had already opposed the entry of this maize - has been fast. In early February, Austria and Luxemburg announced that they were implementing the emergency measures foreseen by European legislation and ban any import and cultivation of Maximiser®, because of their concern on its impact on human health or the environment. In early March, Italy joined them. Recent data on Bt resistance (see Sprouting Up on page 30) tend to confirm these fears.

However, following the procedures set by the EU-Directive on the Deliberate Release of Genetically Modified Organisms (GMOs) to the Environment is not the only requirement in order to be able to cultivate genetically modified seeds in Europe. Additionally, registering the variety in the European Seed Catalogue is a must. Once a particular variety is approved in one countries' seed register, it is automatically included in the European Catalogue and then allowed for unrestricted cultivation in all Europe. In order to qualify, a given variety must show that it is novel, distinct, uniform and stable.

Novartis has started the procedures for inscription in national seed catalogues in several European countries. In Italy the Ministry of Agriculture of Region Lazio, responsible for the procedures of varietal inscription denied the autorization to the 32 test on grounds in October 1996 for maize in the absence of any protocol for GMO's varietal testing. The same reason lead this regional ministry to ban these tests in early March. France denied the registration in late February. Now the turn is on Spain. The Spanish authorities seem to be willing to include two or three varieties of Novartis' Maximiser® corn into the countries' Seed Register.

If Spain did so, it would allow for unrestricted planting Maximiser®, going much further than the USA, which has only granted restricted licenses for its growing because of the unknown environmental outcomes. And it would open Pandora's box: at present there are no legal mechanisms for other member states to prevent the inclusion of in the European Seed Catalogue and their further unrestricted planting all over the Union.

Sources: Personal communications, letters to italian ministers of Health, Environment and Agriculture from Crocevia, letter from Greenpeace Italy to the Spanish Minister of Agriculture.

The gobbling up of key germplasm, technology and seed suppliers will put Monsanto in top place to fight market leaders like Pioneer HiBred, the world's number one seed company. Pioneer holds half of the US corn seed market and is active in soybean too. Monsanto's fighting posture may drive a worried Pioneer to cut a deal with other big league businesses like AgrEvo (Hoechst + Schering), which just bought Europe's most innovate biotech company Plant Genetic Systems, or Dow Elanco.

Top guns on the market, with critical patents in the pocket and legal tools to control farmers to the maximum, Monsanto is well geared to reap the highest profits it can from agricultural biotechnology. As these products, legal tools and practices move further and further into developing countries, Monsanto may soon control an important part of world agriculture. All to feed the world? Or to sell the chemicals?



* Monsanto: various documents publicly available on Monsanto's home page on the World Wide Web (

* Julie Sheppard, "Glyphosate", Pesticides News, #33, Pesticides Trust, London, September 1996.

* L.J.G. van der Maesen and Adikin Somaatmadja (eds), Plant Resources of Southeast Asia: Pulses, PROSEA Publications, Bogor, 1992.

* Caroline Cox, "Glyphosate. Part 1: Toxicology. Part 2: Human Exposure and Ecological Effects", Journal of Pesticide Reform, Vol. 15, Numbers 3 & 4, Fall & Winter 1995, Northwest Coalition for Alternatives to Pesticides, USA.

* "Monsanto Acquires Holden's", AgBiotech Reporter, January 1997.

* Monsanto Roundup Ready® Gene Agreement

* Farmers' Legal Action Group, "Legal Brief on the Monsanto Roundup Contract", 5 February 1997, USA.

* Biotech Reporter, various issues late 1996 through early 1997.

* Dain Bosworth Inc., Seed Industry Overview, Minneapolis, December 2, 1996.


Table: Rounding off the Roundup debate

Regarding Roundup
Roundup has no residual soil activity. Residues of Roundup have been found in lettuce, carrots and barley that were planted one year after the soil was sprayed. Uptake has also been documented in fruits and fish.
Roundup poses no risk to human health. Roundup is the third most commonly reported cause of illness among farm workers in California and the top cause among landscape maintenance workers. In the UK, it is the most frequent cause of pesticide-linked casualties.
Roundup poses no risk to wildlife or the environment. Roundup blocks nitrogen fixation in plants. It also harms fungi that help plants absorb water and nutrients. UK and US authorities say glyphosate affects hedgerows, reduces winter hardiness in trees and their resistance to fungal disease, depletes food sources for wildlife and harms the development in earthworms. Several formulations of glyphosate have been banned in the North.
Roundup is highly unlikely to move from the treatment site. Between 14% and 78% of glyphosate applied as ground sprays moves off-site. Glyphosate can be carried by eroded soils into surface waters. On rare occasions it has been detected in water.
In over 20 years of widescale use there have been no substantiated cases of weeds becoming resistant to Roundup. Resistance to glyphosate has developed in annual ryegrass in Australia, where it is the most common weed. Similar signs of resistance in ryegrass and knotgrass in the UK are reported.
Regarding Roundup Ready® Soybean
Claims of the creation of new weed problems are unfounded. Soybeans have no wild relatives so [they] cannot cross with other plants. Glycine soja, one of the cultivated soybean's numerous wild forms, is readily crossable and is found in Australia, southern China, Taiwan, the Philippines and Papua New Guinea.
Farmers will be able to control weeds in their soybean fields with less chemicals. This has not been substantiated. The same claim with Bollgard cotton has now be refuted on the farm.



The International Rice Research Institute (IRRI) in Los Baños, the Philippines, fired half of its workforce on 7 February. The mass cutback of more than 550 national recruits brings to light a disturbing history of tension between labour and management at the world's premier rice research agency.

IRRI is one of 16 research centres sponsored by the Consultative Group on International Agricultural Research (CGIAR). It was set up in 1960 by the Rockefeller and Ford Foundations and came under the fold of the CGIAR when the Group was established in 1971. IRRI's goal is to improve the well-being of the poor in rice-oriented developing countries through improved production technologies. From its founding, IRRI was registered as a non-stock non-profit corporation under Philippine law. In 1979, President Ferdinand Marcos granted IRRI a number of diplomatic immunities and priveleges through Presidential Decree 1620. Under PD1620, IRRI is immune from civil, administrative and penal proceedings in the Philippines. This blanket of immunity was reinforced in May 1995 when a number of governments signed an agreement recognising IRRI's status as an international organisation.

IRRI has been sheltered under PD1620 to evade public proceedings in its host country regarding a number of controversial matters, of which labour-related disputes. The workers have been complaining of incompetent management and unfair labour practices since the late 1980s. IRRI itself has persistently refused to recognise independent labour unions within its ranks and has tried to block their legal certification under national labour law . Many times the workers tried to voice their grievances about salary scales, work conditions and firing procedures. IRRI has even threatened its staff on several occasions. Lawyers have so far documented at least the following breaches of standard labour practices at IRRI: denial of the workers' right to self-organisation; denial of the workers' right to collective bargaining for better terms and conditions of work; illegal dismissal of employees in violation of their right to substantive and procedural due process; non-compliance with labor standards regarding overtime and night-shift differential pay, regular rest days, and the like; exposing field workers to hazardous conditions of work without adequate protective equipment and without hazard pay; and contracting with labor-only agencies utilising child labour. IRRI's fears of politicisation messing up its "apolitical" scientific work pepper the documented labour history...

Against that backdrop, IRRI has dismissed a total of some 1200 people since the late 80s, asserting on each occasion that they had to reduce their forces under pressure from the donors to streamline. While the entire CGIAR system is going through a terribly protracted crisis of confidence, IRRI's core operating needs of US$ 30 million per year have not visibly been disrupted. In fact, IRRI's financial support actually hit all-time highs of close to US$ 50 million in both 1991 and 1993. And the financial squeeze is hard to find behind the latest mass retrenchment: IRRI's minimal 1997 requirement of US$ 30 million is still there. What "went wrong", according to IRRI's Director General George Rothschild, was that US$ 6-7 million once available for unrestricted spending was suddenly marked restricted by the donors. But it didn't disappear; it was just shifted to the "restricted" resource pool. In fact, IRRI is financing the latest layoff scheme from a bank loan, so it won't come from the current programme budget.

Is IRRI really in financial straits or was the layoff a cheap way to silence discontent? Has the Philippines lavished too much legal largesse on this Institute or is it all to the benefit of the poor? If IRRI's problem is crumbling donor support, does dismissing workers solve that problem? The Philippine Senate has filed a resolution to look into the breach of labour laws by IRRI and assess what should become of PD1620. Meanwhile, a submission detailing the history of the labour conflict has been filed on the workers' behalf with the International Labour Organisation. Whether and how any of this will rock the CGIAR to review the labour practices and legal luxuries of its highly coddled research enclaves remains to be seen. And perhaps most importantly, IRRI's donors would seem to owe a word of explanation not only to the country long hosting and operating their grandiose project, but to the workers who were junked in the name of.... what was it again?

Sources: ILO submission on IRRI, 1996; discussions with IRRI labour and management, January 1997; various press clippings and press releases, from or about IRRI, November 1996 - January 1997; Philippine Senate Resolution 789 filed in 1996; Privilege speech of Philippine Senator Bobby Tañada, January 1997.

Author: GRAIN
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