The world's agribusiness giants are increasingly looking to scale up their activities beyond their traditional markets in North America and Europe. South America is perhaps the land of greatest opportunity for them. It offers many possibilities for both reorienting existing production and opening up vast new tracts of virgin land for large-scale, industrial agriculture. As writer Brewster Kneen points out, when Cargill, the world's top food trader, looks at Brazil, it sees 'not rain forests and denuded mountains, but the great plain of Mato Grosso and its potential for soybean production, if only the water routes to the sea can be made navigable.'1 Massive civil engineering projects planned all over South America are now making Cargill's dream a near reality.
In the same way that the agribusiness giants see the world in terms of growing areas and transportation routes, the new biotechnology giants look at our agricultural biodiversity heritage as a gene pool that is there to be plundered for profit. The world these TNCs are aiming to create will consist of enormous commodity-monocropping areas and sprawling cities, connected by a diversified web of infrastructure allowing for the fast and cheap transportation from 'farm' to factory to consumer. In the corporate Green Revolution, all the rest - landscapes, ecosystems, diversity, production systems, and the people they support - is 'inefficient' and ultimately disposable. This is the giants' dream, and they are steadily putting it into place around the world.
The case of South America, and especially Argentina and Brazil, which are the focus of this article, demonstrates the speed and efficiency with which the TNCs are making their dream happen. Their close partners in this are governments of South America who see international markets, particularly those involving agricultural produce, as the key to economic growth and prosperity in the region. In doing so, they are blind not only to the social and environmental costs, but also to the enormous power and control they are handing over to the world's agribusiness TNCs.
Sharing dreams with giants
The rise in grain prices in international markets captured the attention of politicians in South America. The continent's two largest countries, Argentina and Brazil, see their future wealth in grain production and have welcomed the TNCs with open arms. Land has been opened up for production and watersheds redesigned to provide transportation. In some cases seas of monocropped grains have replaced cattle ranching, while the ranchers have moved on to marginal areas. But much of the expansion has come from exploiting 'undeveloped' natural ecosystems. The planned development of El Pantanal, the largest tropical wetlands in the world extending over a vast area of Brazil, Bolivia, and Paraguay, is the latest and greatest effort of this kind.
In order to convert El Pantanal into a massive grain production region, the governments in the region are planning to build a huge industrial waterway, known as the Hidrovia project. This will involve channelizing 3,400km of the Paraguay and the ParanÂ· rivers to improve navigation for huge barge convoys. But the Hidrovia is only part of the huge engineering project that Argentine and Brazilian citizens have paid for in order to get lower transportation bills, and higher profits, for grain traders.
To further boost the grain economy, Argentina and Brazil have heavily subsidised production and the development of a milling industry, and have increased capacity for grain storage - Argentina's rose by almost 40% between 1985 and 1996. In terms of outputs, the results of these investments have been quite spectacular. In Argentina in 1996, oil seeds (soybeans and sunflower) and cereals (wheat and maize) accounted for nearly 54% of agricultural Gross National Product (GNP). That year, nearly 70% of Argentine exports came from both agricultural products and goods manufactured from them. Between 1991 and 1996, Argentina nearly doubled the area devoted to maize, and is now the world's second largest maize exporter.2
The scale of investment in grain production in these countries has come as a gift to agroprocessing TNCs, since it provides them with huge new production vehicles whose harvests keep their machinery rolling when the season ends for the world's top producers: the US and Canada. Companies can simplify their sourcing options: for example, the Archer Daniels Midland Company (ADM) relies exclusively on US and Brazilian soybeans. This single company has purchased roughly 20% of Brazil's export crop in recent years.
Seeds for larger harvests
As monoculture production has increased, so have the markets for external inputs. During the 1990s, pesticide consumption has increased at an annual rate of about 20-25% in Argentina, and pesticide imports have doubled in Brazil and Uruguay, and tripled in Argentina (see graph). In Brazil, soybean farmers account for one third of agrochemical use.
Another result of agriculture intensification has been the expansion of the seed market, which was valued in Brazil at US$ 1,200 million in 1995. Argentina's seed market was worth more than US$ 874 million in 1997, an increase of almost 70% over its 1993 value. Soybean, maize, wheat and sunflower account for 72% of the seed market in Argentina (with soybean alone accounting for nearly 30%). In Brazil, the hybrid maize market is estimated to be US$ 300 million. Uruguay's $40 million seed market depends largely on rice, wheat, barley and oats.3
In Argentina and Uruguay, national companies and public institutes control the markets for self-pollinating crops, such as wheat, soybeans, cotton, and rice. Plant Breeders' Rights (PBRs) are used to ensure control on the sales of the varieties they produced. PBRs are property rights that give breeders monopoly control on the sale of their varieties. However, in both countries farmers have an exemption and are able to save protected seeds for their own use. On the other hand, TNCs dominate the market for hybrid crops seeds, mainly maize and sunflower. In Argentina, five TNCs control 85% of the country's maize market. Hybrid seeds do not breed true, so farmers need to purchase new seeds for every planting in order to obtain good harvests. Hybrids mean higher profits: hence the division of interests. However, the entry of genetic engineering is changing this picture, broadening the scope of crops TNCs are interested in and causing PBRs to be usurped by patents. 4
One way to get a feel for where agriculture is headed in South America is to look at field tests, which are a prerequisite for the commercialisation of genetically-engineered crops. Only Argentina and Brazil have made their data on field releases publicly accessible through the internet (although Brazil restricts access to the information), and so these are the cases GRAIN has been able to analyse - within the constraints of the data available.
Argentina leads the field in transgenic crop releases, with 174 field trials to date. Brazil and Uruguay follow behind with 56 and 29 trials respectively. In Uruguay, 29 field releases have only a handful of tests have been carried out, on Novartis' gluphosinate-tolerant, Bt (YieldGard) maize, Monsanto's glyphosate-tolerant (Roundup Ready) soybean, and Bt Eucalyptus.
In both Brazil and Argentina, the tests have been remarkably similar in terms of the nature of the promoters, the crops that have been tested, and the technologies used. TNCs account for 70% of field trials, with a few companies controlling the vast majority of them (Table 1). For example, Cargill Seeds, Braskalb and Agroceres have all used Monsanto's glyphosate-resistance technology in field trials.
TNCs have determined the agenda for field testing by the main national seed companies both in Brazil and Argentina. In Brazil, well in advance of being purchased by Monsanto, Agroceres worked on herbicide resistance and Bt. The top field tester in Argentina is La Nidera SA, which controls 60% of the national soybean market and is Monsanto's main partner in the distribution of Roundup Ready soybean.5 La Nidera has concentrated its field testing on herbicide-resistant soybean and maize. At the same time, public research centres that have also opted to further adapt TNC-controlled technologies to local varieties of export crops. This is the case for Brazil's EMBRAPA, which has released glyphosate-resistant soybean, and Argentina's CEFOGI, which is working with wheat and maize. Of these centres' field releases, only those of Argentina's INTA on virus-resistant potatoes do not involve export commodities.
As in the North, only a handful of genetically-engineered crops are being tested in South America, reflecting the tunnel vision of the TNCs involved in agricultural production. In Uruguay, Argentina and Brazil, maize and soybean have been by far the most field tested crops. This is not surprising given their particular interest to the industry. After the kings of the grain feed traders, traditional export crops have received the most attention.
Table 3: Field tests per crop
Source: compiled by GRAIN from various data sources
Not only is there great uniformity in the range of crops being tested, but also in the traits being tested and the technologies that afford the traits. In both countries, and also in Uruguay, more than 60% of the field tests have included herbicide tolerance, as a single trait or on in combination with another transgenic characteristic. Moreover, this resistance has been focused on two herbicides: Monsanto's glyphosate and AgrEvo's gluphosinate. Given the heavy emphasis on herbicide tolerance, it comes as no surprise that Monsanto has announced that it is increasing its glyphosate production capacity in Argentina and in Brazil by US$ 135 and 410 million respectively! 6
Insect resistance has been the next priority of the industry. Here again, there is great uniformity: all but one of the TNCs working on this trait are using Bt as their insect control strategy. Where that will lead to is discussed on this Seedling. In contrast to the US, there is little testing of traits affecting food quality, such as oil and protein content.
... and going commercial
Since Argentina first approved the commercialisation of Monsanto's glyphosate resistant, Roundup Ready (RR) soybean in March 1996, its spread has been spectacular. It now occupies 2 million Ha, or about one half of the country's soybean area. A number of other transgenic crops have also been approved and are awaiting registration. These include Monsanto's glyphosate-tolerant maize, Monsanto's Bt maize, Novartis' YieldGard maize, and Monsanto's Bt cotton. In Uruguay, only Monsanto's RR soybean is ready for commercialisation
The introduction of RR soybean into Brazil has not gone as smoothly as Monsanto would like. Brazil has traditionally demonstrated a more cautions approach to genetic engineering than Argentina and has been dragging its heels on approving transgenic crops. RR soybean, the country's first transgenic crop, was finally approved in September this year. This will no doubt make Monsanto very happy, since Brazil is the world's number two soybean producer after the US.
Domination of the seed sector
A few large TNCs are being very successful at dominating the seed sector in South America. They have been able to do this by following a number of strategies:
Table 3: Latest mergers and acquisitions of seed companies by agrochemical companies
Source: GRAIN, compiled from several Reuters articles.
TNCs have used a variety of industrial and scientific platforms to push for the adoption of biotechnology using the same propaganda as they have in Europe. Their PR strategies have portrayed European resistance to transgenic crops as a form of protectionism, rather than the reality of consumer disgust.
Monsanto used soybean processing as a means of getting its soybean exports into Brazil, just as it did in Europe. To this end, it took advantage of a situation it had indirectly created: the very low level of Brazil's soybean stocks due to the very high demand for the country's gm-free soybean. It pressured the Brazilian government to allow the import of 1.5 million tons of US soybean containing at least 15% of Monsanto's RR soybean. As usual, Monsanto did not work alone to achieve this: it enlisted the support of the Brazilian Association of Vegetable Oil Industries (ABIOVE), whose main partners are transnationals such as Bunge, ADM and Cargill. 7
However, despite all its efforts, and even after Brazil's approval of RR soybean, Monsanto is not yet off the hook. Concerned about potential consumer health threats, on September 17 1998, Judge Raquel FernÂ·ndez Perrini, of the 11th federal district court in Sao Paulo, put the precautionary principle into practice by issuing a temporary restraining order on RR soybean. Monsanto is preparing to fight this decison, having enlisted the help of Brazil's office of the public prosecutor.
Monsanto's agenda in South America and all over the world, goes beyond simply increasing its herbicides sales. It is striving for both horizontal and vertical integration of the food chain, not only trying to suffocate its competitors in the agrochemical realm but gain control of food 'commodities' from the seed to the final processed product. Other TNCs share this ambition, and the world's agricultural lands are becoming the battlefields of the giants. Given its huge agricultural potential, South America is a key strategic region to be conquered.
RR soybean was introduced in Argentina in 1996 by making it very widely and easily accessible to farmers, who found it easier to grow it than conventional soybean. The following planting season, farmers were in for a surprise. The seed companies selling RR soybean to them (mainly La Nidera) demanded a royalty fee (13 US$ for 50 Kg of seed) and required them to sign a contract agreeing not to save seed. The Argentine Farmers Federation (FAA) contested this on the basis that that Argentine PBR legislation permits seed saving and La Nidera was forced to sell the seed without the contracts.
This year, Monsanto got wise to this and forced the seed companies to withold RR soybean from farmers who would not sign a contract stating that they acknowledge that the incorporated technology is Monsanto's property, and that they will abide by industrial patent law. However, Monsanto has not applied in Argentina for its main patent on glyphosate resistance. According to the countrys biosafety assessment body, CONABIA, companies are not patenting their transgenic seeds in Argentina because of 'legal grey areas.' This means that Monsanto's contract may actually be meaningless in Argentina. The case is different in Brazil, where Monsanto has applied for two patents covering glyphosate tolerance.8
Monsanto's contract with farmers is critical to the company. Firstly, it enables Monsanto to make big profits from RR soybean and Round-Up sales. Secondly, it ensures sales of Roundup and its seeds in the future. But the main objective is to ensure that Monsanto controls when, where and how its soybean is grown, an important consideration for a company bent on controlling the global food system.
Monsanto's insistence on its contract shows how a biotechnology company can use its influence to make a mockery of the farmers' privilege embodied in PBR. The company will no doubt use its considerable political muscle in the revision of TRIPs, scheduled in 1999, to ensure that all countries are obliged to accept patents on plant varieties. This would make life a whole lot easier for Monsanto. For those that see in seed saving the base of farmers' independence and the milestone for crop evolution, this case shows how important it is that Farmer's Rights are given precedence over any private contract.
Both Brazil and Argentina have developed legislation on the deliberate release of transgenic organisms into the environment. Uruguay has not and biosafety discussions are extremely limited in their scope and participation. The Comisión de Evaluación de Riesgos (CER), an ad hoc consultative group which has been set up within the ministry of agriculture to address biosafety issues, comprises only four agricultural experts. Evaluations are based on a two year assessment, which examines only phytosanitary and performance criteria. Issues specific to biosafety have been blatantly ignored, and companies have not even obliged to report unexpected results in their field trials. A new law is currently being drafted, but observers are not hopeful that it will be much more comprehensive. There is a real need for NGOs and the general public to fight for real biosafety legislation instead of the current masquerade.
Brazil and Argentina have set up national biosafety commissions, CTNBio and CONABIA. These are more participative and less narrow in their approach than CER, but are heavily industry-biased. CTNBio only one representative of the consumer organisation amongst its academic experts. In fact, one NGO representative left the Commission because of the lack of critical scientific experts who could counterpoise industry propaganda. Industry presence outweighs the public sector in CONABIA and there is blatant exclusion of the community, consumer and farmer organisations.
Debates in both biosafety commissions largely mirror those in Western countries. Companies are made liable for the unforeseen effects of their products, but their information is accepted in good faith. Field trial monitoring is undertaken and the question of genetic drift addressed. However, there is no requirement for field tests to measure possible interactions within the ecosystems, nor any provisions for examining the impact on human health or socio-economic effects.
As usual, the burden of proof lies with those opposing GMOs. Transgenic crops are seen as a good thing until proved otherwise. Lack of evidence of risk is taken as evidence of lack of risk. NGOs opposing the introduction of GMOs in Argentina, Uruguay and Brazil demanding that the burden of proof be reversed, so that industry is forced to demonstrate that its products are needed and safe. They are also asking for a wide public debate on the issues and for genuine representation of the civil society in the decision-making bodies. Many are also asking for a moratorium on the release of GMOs into the environment. And they have good reason, for the evidence against transgenic crops is growing daily. For example,
So, not only are Brazil, Argentina and Uruguay importing dangerous technologies, some, such as Bt (which accounts for 40% of field tests in Brazil and Argentina), may be obsolete almost before they are off the starting blocks.
Dream on TNCs
Obsolete and dangerous though they may be, transgenic crops are being embraced in South America. The significance of this embrace is enormous and is probably underestimated by the governments involved. The real benefactors will be the TNCs promoting the new crops, rather than farmers. In addition to increasing revenues, transgenic crops will help the corporations to access and control new seed markets, introduce the culture of patents and contracts and make seed saving an unlawful and socially-unacceptable practice. In this way, South America has stepped firmly on to the treadmill of industrial agriculture and is heading in the same direction as Northern countries.
The next step on the treadmill is the production of crops specifically designed for a specific uses and markets - dictated, of course, by the TNCs themselves. At that point, it will be up to the seed and the agrofood giants to agree what and where to plant, and who will share the benefits. Farmers will merely be contractors planting what they are told to plant. In the new brave world of industrial agriculture, corporations might even not need to own the land any more, since they would be able to control the seeds, the farmers and the market. This is world that some South American governments are pushing their rural populations towards, by dreaming with the giants.
GRAIN wishes to thank the enthusiastic help of CETAAR (Argentina), Silvia Ribeiro of REDES-AT (Uruguay), Angela Cordeiro (Brazil), Germán Vélez of Programa Semillas/Swissaid Colombia in providing the information that has made this article possible.
1 B Kneen (1995), Invisible Giant, Pluto Press, London
2 Argentina agropecuaria, agroindustrial y pesquera. Secretaria de Agricultura, Ganaderia, Pesca y Alimentacion.
3 Several sources including ASSINSEL World Seed Statistics http://www.worldseed.org/~assinsel/stat.htm ; ASA statistics http://www.asarg.com/ ; W Jaffe and J Van Wijk (1995), The impact of plant breers' rights in developing countries, IICA, Univ. of Amsterdam; Sylvia Ribeiro, REDES-AT, Uruguay.
5 According to the Federacion de Agricultores de Argentina
6 3 Aug 1998, Brazil: Monsanto to double its herbicide production, Reuters; Sept 14 1998, Monsanto to build Roundup plant in Brazil, Reuters.
7 GRAIN press release, 10 October 1997
8 Patent applications PI 1100008-2/PI 1100007-4
9 Topsy Jewell (1998), "Resistance to Glyphosate," Pesticides News No.41, Sept 1998.