Monsanto, Big Ag has ‘troubling’ control over seed market, report finds

Posted on 19 marca 2010. Filed under: gmo, gmo szajs, Niebezpieczne | Tagi: , , , , , , |

Ten companies account for two-thirds of the world’s proprietary seed for major crops

By Lynda Waddington 12/29/09 6:00 AM

Few Iowans are aware of the price increases plaguing farmers, or the federal policies and U.S. Supreme Court rulings that have resulted in a handful of large corporations controlling the seed markets. But a new report, issued three months ahead of scheduled discussions in Ankeny on anti-competitiveness within the seed industry, highlights what Iowa farmers have known for some time.

xxxxThe Farmer to Farmer Campaign on Genetic Engineering, a network of 34 farm organizations throughout the U.S., issued the report in advance of an unprecedented series of antitrust workshops co-sponsored by the U.S. Departments of Justice and Agriculture. The five workshops, which will begin in Ankeny in March and span four other states over the next year, are an opportunity for producers to speak directly to federal officials about antitrust concerns. The Iowa-based discussion will specifically focus on seeds and the few corporate giants that control that market.

According to the report, which attributes the current consolidation of the seed industry to lax antitrust enforcement and laws favorable to large corporations, 10 companies account for roughly two-thirds (65 percent) of the world’s proprietary seed for major crops. Of those 10 companies, four firms account for 50 percent of the proprietary market alone, and 43 percent of the commercial market, which includes both proprietary (branded seeds subject to intellectual property protection) and public varieties.

The 1980 Bayh-Dole Act allowed universities — for the first time — to patent inventions that result from publicly funded research projects on the theory that the law would increase innovation. With passage, industry funding of public research surged and public funding dropped dramatically. The result has been the privatization of public research … , leading to restrictions on the free exchange of basic research, less public analysis of new varieties, and diminished innovation. Though industry funding of universities may not be something to criticize on its own, these trends are troubling.

Dozens of mergers and acquisitions followed the expansion of agriculture biotechnology. … At least 200 independent  seed companies have been lost in the last 13 years alone. …

Due to the prevalence of soybean and corn in Iowa, most discussion in the state focuses on the Monsanto Co., whose genetically engineered seeds are planted on more than 80 percent of all U.S. corn acres and more than 90 percent of all U.S. soybean acres.

Monsanto's 2008 seed market share in corn and soybeans. (Source:  Farmer to Farmer report, Monsanto's April 2009 supplemental toolkit for  investors)Monsanto’s 2008 seed market share in corn and soybeans. (Source: Farmer to Farmer report, Monsanto’s April 2009 supplemental toolkit for investors)

Such market dominance has left Iowa farmers holding the bag.

“[Genetically engineered] traits have spurred a rapid increase in seed prices, largely because firms have implemented a novel pricing structure through ‘technology fees’ charged on top of basic seed costs,” the report said, adding: “Prices farmers pay for seed have increased 146 percent since 1999, and 64 percent of that increase occurred in just the last three years. Prices of hybrid corn seed were more than 30 percent higher, and soybean seed about 25 percent higher, over 2008 prices.”

Monsanto and other large seed companies have argued that demand for their seed has driven the market to where it is. But critics point to anti-competitiveness clauses within agreements with seed distributors that require specific varieties of seed of its total corn seed inventory in order for the distributor to receive rebates.

By controlling the funnel of seeds to farmers, large corporations also have the luxury of pushing their latest products and making older formulas less available. In August 2009, for example, Monsanto announced that the royalty fee on its next generation Roundup Ready soybean seed would increase 42 percent in 2010 — an increase of roughly $75 per acre. It also announced that there would be a price hike on first generation Roundup Ready soybean seed to roughly $52 per acre, with anticipation that the first generation seed would eventually be phased out.

That same month, however, U.S. Department of Justice officials announced that they were investigating Monsanto for anti-trust actions. As reported by the New York Times, Monsanto has conceded that it will allow its first-generation soybeans, the first Roundup Ready crop, to go the way of generic prescription drugs and will allow farmers to continue to grow the seeds even after the patent expires in 2014. The seeds are the first widely utilized crop seed to lose patent protection, but loss of the patent itself is not likely to be enough to reduce Monsanto’s market share.

Glyphosate, a broad-spectrum herbicide, was initially patented and sold by Monsanto in the 1970s under the trade name Roundup. The seeds produced by Monsanto were specifically engineered to be resistant to the herbicide, allowing farmers to spray crops for weeds even after the crop had emerged from the ground. Although the patent for Roundup expired in 2000, the company has continued to market its brand and include the resistant trait in its seeds. In Iowa alone, the USDA estimates that 12.1 million pounds of glyphosate was applied to fields in 2006 — compared to 0.9 million in 1997.

Despite the expiration of the Roundup patent in 2000, which resulted in an initial cost reduction, farmers are now experiencing ever-inflating prices of the herbicide. Seed and chemical dealers told farmers, according to the report, that the increases — often double or triple the cost of just two years ago — are a result of demand, waning genetic production in China and a shortage of phosphorous, a key ingredient. When supply waned, Monsanto reacted by increasing the cost of its product, Roundup, by 30 percent in an effort to “ration supply.”

More troubling for Iowa and farmers throughout the U.S., however, is the fact that such wide use of glyphosate has enabled the emergence of several glyphosate-resistant weeds, and a lack of incentive or money within the herbicide industry to begin development of formulas to combat them.


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