The AP says:
With Monsanto's patented genes being inserted into roughly 95 percent of all soybeans and 80 percent of all corn grown in the U.S., the company also is using its wide reach to control the ability of new biotech firms to get wide distribution for their products, according to a review of several Monsanto licensing agreements and dozens of interviews with seed industry participants, agriculture and legal experts.
Declining competition in the seed business could lead to price hikes that ripple out to every family's dinner table. That's because the corn flakes you had for breakfast, soda you drank at lunch and beef stew you ate for dinner likely were produced from crops grown with Monsanto's patented genes.
Note that they say that Monsanto's traits are in 80 percent of corn. Monsanto doesn't actually sell all of that corn. I would assume that much of it is Pioneer corn (owned by DuPont), with Monsanto's traits engineered into it. The AP explains how that works:
Monsanto's methods are spelled out in a series of confidential commercial licensing agreements obtained by the AP...
The company has used the agreements to spread its technology - giving some 200 smaller companies the right to insert Monsanto's genes in their separate strains of corn and soybean plants. But, the AP found, access to Monsanto's genes comes at a cost, and with plenty of strings attached.
While Monsanto does not sell 90% of all seeds, the article quotes an agricultural economist who believes Monsanto has control over as much as 90 percent of all seed genetics. He continues, saying that with so much control Monsanto can increase their prices in the long term because they have no competition. Then the AP reports on seed price increases over the past few years:
The price of seeds is already rising. Monsanto increased some corn seed prices last year by 25 percent, with an additional 7 percent hike planned for corn seeds in 2010. Monsanto brand soybean seeds climbed 28 percent last year and will be flat or up 6 percent in 2010, said company spokeswoman Kelli Powers.
They go on to explain the specific methods Monsanto used and uses to get control of the market. For example:
One contract gave an independent seed company deep discounts if the company ensured that Monsanto's products would make up 70 percent of its total corn seed inventory...
Quarles said the discounts were used to entice seed companies to carry Monsanto products when the technology was new and farmers hadn't yet used it. Now that the products are widespread, Monsanto has discontinued the discounts, he said.
And how about this?
The Monsanto contracts reviewed by the AP prohibit seed companies from discussing terms, and Monsanto has the right to cancel deals and wipe out the inventory of a business if the confidentiality clauses are violated.
Thomas Terral, chief executive officer of Terral Seed in Louisiana, said he recently rejected a Monsanto contract because it put too many restrictions on his business. But Terral refused to provide the unsigned contract to AP or even discuss its contents because he was afraid Monsanto would retaliate and cancel the rest of his agreements.
And then there's the deal they make with smaller seed companies: You can use our traits but if you are bought by another seed company, you must destroy all of the seeds you have with our traits in them. As a result, Monsanto's had a cheap and easy time buying up smaller seed companies:
Monsanto's provision requiring companies to destroy seeds containing Monsanto's traits if a competitor buys them prohibited DuPont or other big firms from bidding against Monsanto when it snapped up two dozen smaller seed companies over the last five years, said David Boies, a lawyer representing DuPont who previously was a prosecutor on the federal antitrust case against Microsoft Corp.
Competitive bids from companies like DuPont could have made it far more expensive for Monsanto to bring the smaller companies into its fold. But that contract provision prevented bidding wars, according to DuPont.
You can read Monsanto's rebuttal here. |
