February
2016
MONSANTO
SEEKS MERGER TO BOOST DOMINANCE
The
author explains why the world’s largest seed company is desperately
seeking a merger with its rival Syngenta.
By
Carmelo Ruiz
The biotechnology corporation, Monsanto, will likely change its name
this year following its imminent merger with its European counterpart
Syngenta. Such a merger would beget an unprecedented behemoth that
would control 45% of the world commercial seed market and 30% of the
global agrochemical sector.(1)
The US-based Monsanto, which began in 1901 as a chemical
company, is currently the world’s largest seed company, with some
26% of the world market. In the 1970s Monsanto invented the systemic
herbicide glyphosate. Sold by the company under the brand name Roundup,
it is the most lucrative agricultural poison in history. This company
dominates the world market for genetically modified (GM) seed, trouncing
its competitors by a broad margin. The majority of its GM seeds have
been modified to tolerate being sprayed with glyphosate, and are thus
called Roundup Ready seeds. This particular use of GM technology allows
Monsanto to sell the seed and the herbicide as one integrated package.
Glyphosate’s patent expired in 2000, which means that
now any chemical company can make its own generic glyphosate and compete
with Monsanto’s Roundup. So how does the company keep profiting off
its herbicide? By requiring farmers who buy Roundup Ready seed to
buy only Roundup and refrain from using generic glyphosate products.
Monsanto’s
GMO seed venture
Monsanto started buying big into the biotech and seed businesses in
the waning years of the 20th century, conducting its first open air
GM crop field tests in Puerto Rico and other locations in 1987. It
then went on a binge, buying out companies like Agracetus, Asgrow,
Calgene, Dekalb and Holden Seeds, and reorganizing into a “life sciences”
company in 2000.(2) It became the world’s number one seed company
in 2005 when it purchased Mexico’s Seminis for $1.4 billion.(3)
Syngenta, with 28,000 employees in over 90 countries,
describes itself as “a leading agriculture company helping to improve
global food security by enabling millions of farmers to make better
use of available resources”.(4) Founded in 2000, it was the product
of a merger of the agricultural businesses of Novartis and AstraZeneca.
Novartis was in turn the product of a 1996 merger between Ciba Geigy
and Sandoz, back then one of the largest corporate mergers in history,
while AstraZeneca came into existence in a 1999 merger.(5)
Glyphosate
a liability
Monsanto desperately needs to marry a partner for a number of reasons.
The first is that glyphosate is becoming a liability. On April 2015
the World Health Organization identified it as a probable human carcinogen.
Furthermore, the science that led to its approval does not seem to
hold up. According to a November 2015 GM Watch report:
“Monsanto has known for almost four decades that glyphosate
causes cancer, according to a new paper by researchers Anthony Samsel
and Stephanie Seneff. Samsel is the first independent researcher to
examine Monsanto’s secret toxicology studies on glyphosate. He obtained
the studies, which have been denied to other inquirers, via a request
to his senator. With his co-researcher Dr Stephanie Seneff of MIT,
he reviewed Monsanto’s data. Samsel and Seneff concluded that ‘significant
evidence of tumours was found during these investigations’.”(6)
That same month, another peer-reviewed paper exposed the
dubious science used in Monsanto-sponsored glyphosate safety studies
at the time that the company was seeking US government approval:
“Dr Marek Cuhra has conducted a careful study of all of
the assessments made of the toxicity of glyphosate to aquatic organisms
– and in particular the water-flea Daphnia magna. He discovered that
the industry sponsored study conducted by McAllister and Forbis in
1978 for ABC laboratories (which was never published) purported to
show that glyphosate was about 300 times less toxic than was revealed
in later studies. And yet that deeply flawed study was used for the
assessment of glyphosate toxicity by the American EPA and by other
regulators worldwide, on the assumption that it was completely reliable.
The study purported to show that glyphosate was effectively harmless,
and that was accepted as a scientific ‘fact’.”(7)
And that’s just two news items in one month. There is
further information on the toxicity of glyphosate herbicides in studies
carried out by Argentina’s late crusading scientist Andrés Carrasco(8)
and the French team led by Gilles-Eric Séralini.(9)
Superweeds
make glyphosate redundant
Those unmoved by hazards to human health will perhaps be moved by
this: glyphosate is fast becoming useless, thanks to the predictable
rise of resistant weeds. There are currently 100 million acres in
36 US states invaded by
herbicide-resistant weeds, and at least 24 resistant weed species worldwide. According to a June 2014 Nature editorial:
“Palmer pigweed (Amaranthus palmeri) is not a weed to
trifle with. It can reach more than 2.5 metres tall, grow more than
6 centimetres a day, produce 600,000 seeds and has a tough, woody
stem that can wreck farm equipment that tries to uproot it. It is
also becoming more and more resistant to the popular herbicide glyphosate.
The first such resistant population was confirmed in 2005 in a cotton
field in Georgia, and the plant now plagues farmers in at least 23
US states. There is broad agreement that the spread of these resistant
plants has its roots in the widespread adoption of crops engineered
to be resistant to glyphosate.
“By 2012, glyphosate-resistant weeds had infested 25 million
hectares of US cropland. They have also appeared in other countries
that have embraced glyphosate-tolerant crops, including Australia,
Brazil and Argentina. Blanketing crops year after year in the same
herbicide is the perfect way to foster resistant weeds.”(10)
Monsanto’s response to this crisis has been to acquire
from other corporations new toxic agrochemicals and GM crops engineered
to resist them. Given that Syngenta is the world’s number one pesticide
company, with 20% of the market, it is the most obvious target of
Monsanto’s advances. In 2015 Monsanto made two buyout offers to Syngenta,
the second one of $45 billion, but Syngenta declined.
Now Monsanto is more hard-pressed than ever to close a
deal with Syngenta, given that Germany’s BASF and Chinese state-owned
corporate giant ChemChina are courting the company with buyout offers
of their own. What’s worse, in November, Dow and Dupont, Monsanto’s
only two real competitors in the US, agreed to merge. Dow Agrosciences,
Dow’s agricultural division, has 10% of the world agrochemical market
and 4% of the commercial seed market. And Dupont has, through its
Pioneer subsidiary, 21% of the world commercial seed market and 6%
of the agrochemical market. Monsanto is likely to fear being crushed
to oblivion by the offspring of such a merger.
Pioneer has an unusual history. It was founded in the
1920’s by plant breeder, business maverick and progressive politician
Henry A. Wallace, who would go on to become US president Franklin
D. Roosevelt’s secretary of agriculture, later the country’s vice
president, and in 1948 the presidential candidate of the left-of-center
Progressive Party.(11) In 1941, just as he was starting his vice presidency,
Wallace collaborated with Rockefeller Foundation president Raymond
Fosdick in founding an agricultural programme in Mexico that would
become the model for the green revolution.
In 1999 Dupont bought Pioneer for $7.7 billion, a sum
it obtained by issuing the biggest initial public offering (IPO) of
shares in history. Dupont thus became the world’s largest seed company
until it was surpassed by Monsanto in 2005.
Tax
avoidance
What else is in a merger for Monsanto? Tax avoidance, for one. The
corporation resulting from a Syngenta merger will most likely be incorporated
outside the United States. “Monsanto is one of many US-based corporations
eager to switch its incorporation to a country with a lower corporate
tax rate, a strategy known as ‘tax inversion’”, according to the ETC
Group. A merger with Syngenta would allow Monsanto to move overseas
and thus reduce its tax burden by more than $500 million.
What’s
in a name?
And then there’s the company’s problematic name, which has become
synonymous with opprobium and outrage. A major merger would be a good
time to shed the name Monsanto. Why keep the name anyway? Monsanto
nowadays seems to have little if anything to do with the Monsanto
family, which company founder John Francis Queeny married into at
the end of the 19th century. A name change would not be an outlandish
move; other corporations have done so, like Andersen Consulting, Blackwater,
Kentucky Fried Chicken, KPMG, Philip Morris, and Vivendi. The ETC
Group predicts that “No matter which mergers/acquisitions ultimately
materialize, there’s little doubt that the infamous Monsanto name
will soon be history.” – Third World Network Features.
Notes
1)
ETC Group. “Breaking Bad: Big Ag Mega Mergers in Play” December 15
2015. http://www.etcgroup.org/content/breaking-bad-big-ag-mega-mergers-play
2) Monsanto company history http://www.monsanto.com/whoweare/pages/monsanto-history.aspx
3) http://newfarm.rodaleinstitute.org/features/2005/0205/seminisbuy/index.shtml
[It is estimated that at the time of the Monsanto buyout, Seminis
had] 40 percent of the U.S. vegetable seed market and 20 percent of
the world market—supplying the genetics for 55 percent of the lettuce
on U.S. supermarket shelves, 75 percent of the tomatoes, and 85 percent
of the peppers, with strong holdings in beans, cucumbers, squash,
melons, broccoli, cabbage, spinach and peas. The company’s biggest
revenue source comes from tomato and peppers seeds, followed by cucumbers
and beans.
In large part, these numbers reflect usage of Seminis varieties within
large industrial production geared towards supermarkets, but Seminis
seeds are also widely used by regional conventional and organic farmers
as well as market and home gardeners. Johnny’s, Territorial, Fedco,
Nichol’s, Rupp, Osborne, Snow, and Stokes are among the dozens of
commercial and garden seed catalogs that carry the more than 3,500
varieties that comprise Seminis’ offerings. This includes dozens of
All-American Selections and an increasing number of varieties licensed
to third parties for certified organic seed production.
4) http://www.syngenta.com/global/corporate/en/investor-relations/company-profile/Pages/key-facts.aspx
5) Syngenta company history. http://www.syngenta.com/global/corporate/en/about-syngenta/Pages/company-history.aspx
6) GM Watch. “Monsanto’s secret studies reveal glyphosate link to
cancer” November 6 2015. http://www.gmwatch.org/news/latest-news/16515-monsanto-s-secret-studies-reveal-glyphosate-link-to-cancer
7) GM-Free Cymru. “More Monsanto scientific fraud in early glyphosate
‘safety studies’” http://www.gmfreecymru.org/news/Press_Notice07Nov2015.html;
For more information: http://bioseguridad.blogspot.com/search/label/Glyphosate,
http://bioseguridad.blogspot.com/search/label/Roundup
8) http://bioseguridad.blogspot.com/search/label/Carrasco
9)
http://www.enveurope.com/content/26/1/14/abstract http://bioseguridad.blogspot.com/search/label/Seralini
10)
Nature. “A growing problem”. June 11 2014. http://www.nature.com/news/a-growing-problem-1.15382?WT.ec_id=NATURE-20140612,
For more information: http://bioseguridad.blogspot.com/search/label/Weeds
11) Carmelo Ruiz. “The Life and Passion of Henry A. Wallace” Counterpunch,
March 27 2012.http://www.counterpunch.org/2012/03/27/the-life-and-passion-of-henry-a-wallace/
-ends-
About
the author: Carmelo Ruiz is a Puerto Rican author and journalist.
He runs the Biosafety
Blog and a blog on
journalism and current affairs, and is a research associate at
the Institute for Social Ecology. His latest book, El Gran Juego de Ajedrez Botánico, is available on
Amazon. His Twitter account is @carmeloruiz.
The
above article is reproduced from GMWatch, 12 January 2016. The original
article is posted here.
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