March 21, 2005

 

Monsanto grows amidst criticism of GM grains

 

 

Despite the resistance to GM products in Europe and Southeast Asia, biotech crops continue to sprout on more of the world's arable acreage every year. That area has grown from about 4.3 million acres in 1996 to 200 million acres in 2004. Similarly, Monsanto's financial forecasts for this year and next only get better

 

Monsanto is using its grip on the small but growing niche of genetically engineered agriculture to push into markets outside the United States, where its technology has been used to develop the seeds used to produce nearly the entire soybean crop and half of the corn.

 

But there is concern that overall growth will hardly benefit consumers.

 

Critics complain that Monsanto and its rivals have failed to deliver on the promise to revolutionize agriculture with plants genetically engineered to be healthier, drought-resistant and tastier.

 

Pioneer officials tout a pipeline of products being developed, including drought-resistant corn. They also point to new Pioneer seed products that yield corn and soybeans with consumer-friendly features, such as heart-healthy oils.

 

In addition, Pioneer has acquired gene shuffling technology for agricultural applications that will enable it to engineer crops faster and more precisely.

 

Monsanto's best-selling seeds remain soy, corn and cotton genetically engineered to resist weed killers and bugs, and the prospects for introducing new biotech crops to the market are at least two years away.

 

"Monsanto has done a good job of cornering the biotech market, but it has a very narrow focus on a very few products," said Greg Jaffe, who wrote a report last month lamenting the industry's lacklustre immediate future for the Washington, D.C.-based Centre for Science in the Public Interest. "They seem to be coasting on the products that they developed in the mid-1990s."

 

Addressing that concern, Monsanto last month agreed to pay $1 billion cash for Seminis Inc., the Oxnard, Calif.-based supplier of more than 3,500 seed varieties to commercial fruit and vegetable growers, dealers, distributors and wholesalers in more than 150 countries.

In Brazil, meanwhile, lawmakers this month cleared the way for regulators to approve biotech crops, opening a big door for Monsanto to sell its popular modified soy seed in a country where farmers have used pirated versions of the company's Roundup Ready variety for years. Brazil's president, Luiz Inacio Lula da Silva, is expected to soon sign that into law.

 

The country's soy market has boomed over the past decade and the new law would double use of Monsanto's soy seeds in Brazil over the next several years to about 50 percent of the market.

 

"Where we are is still at the very beginning of the cycle," said Fraley, the company's chief technology officer, "like betting at the beginning of the computer revolution."