COVER STORY/A.V. Krebs

The Seed Patenters:
Biotech Giants Force
Farmers into Lockstep

Special to The Progressive Populist

"Adapt or Die!" That was the clarion call issued during the 1970s to American agriculture by Earl Butz, the Secretary of Agriculture, on behalf of his corporate sponsors. In the 1990s the call is echoed by corporate agribusiness itself, but this time it means big business.

With the "agricultural biotechnology revolution," American agriculture is today on the threshold -- whether all farmers like it or not -- of entering yet another era of "getting big or getting out," as Secretary Butz repeatedly counseled family farmers more than two decades ago. Those who followed such "conventional wisdom" in the 1970s soon found themselves in the 1980s with crop prices below the cost of production, deep debt, bankruptcy and foreclosure.

Now the nation's farmers are being asked to again gamble on their future in the form of biotechnology. "I needed to participate in this in order to stay competitive," Gregory Guenther, a 44-year-old Belleville, Ill., farmer recently told the Wall Street Journal. "Like it or not, you're almost forced to use the technology."

Leading the way in this so-called biotech revolution are seeds equipped with agronomic traits -- resistance to herbicides, insects and pests. While some farmers are embracing the new technology, just as they embraced expanding their operations from "fence post to fence post" in the '70s, others are being more cautious.

As Christopher Hausman, a Pesotum, Ill., farmer who raises 600 acres of soybeans using a brand of Monsanto seeds designed to resist Monsanto's Roundup herbicide, notes certain fields he planted with the new soybean seeds aren't producing as well as he expected. Saying he plans to wait to see whether the yields improve before committing additional acreage. "You just don't want to leap into this technology head-first," he said. "You want to try it out first."

Of course, the large transnational chemical and seed companies that are manufacturing these biotechnologically engineered seeds believe that more seed varieties gives farmers more choices and the quicker they get such seeds the better.

Farmers like Bill Northey, who has been farming in northwest Iowa for 17 years, however, noted to the Journal that such seeds can also make family farmer's work more complicated. "There's a complexity to all this that requires additional management," he observed "Some people will thrive in that environment and some won't."

Many family farmers fear that they indeed will be the ones who will not "thrive" in this new "environment," for while the nation's major chemical companies, through mergers and acquisitions, have been moving aggressively to gain control over the makers of the seeds needed to carry their designer genes, many family farmers fear these mergers could lead to monopolization and higher seed prices.

"Anytime you have concentration in any market, it drives out the small producer, and he's normally the person that holds prices in check," warns Billy Arpe, a farmer from Roscoe, Texas.

Leading the charge into this new era in the U.S. is the Monsanto corporation, headquartered in St. Louis, Missouri and the DuPont corporation of Wilmington, Delaware.

As the Journal observed May 27:

"Monsanto Co. and DuPont Co. are betting the farm in bids to transform themselves into the Coke and Pepsi of genetically engineered crops. In the three years since the first transgenic seeds were introduced, crop biotechnology has grown from a young science to a hot business: About half of U.S. cotton fields, 40% of soybean fields and 20% of corn fields this year are genetically altered. Now, in a stunningly swift concentration of power, much of the design, harvest and processing of genetically engineered crops is coming under these two companies' influence."

Monsanto is attempting to stake out a leadership in this biotech revolution. In recent months it has:

* Announced two agreements in the crop-biotechnology field with a total value of about $4.25 billion. In a bidding war it acquired the DeKalb Genetics Corp. with a stunning offer of $100 a share for the 60% of the seed-corn company that it didn't already own. The deal valued the DeKalb stake at $2.5 billion. In a separate deal, it also agreed to acquire cotton-seed company Delta & Pine Land Co. in a stock deal valued at about $1.75 billion.

DeKalb, based in DeKalb, Ill., gives Monsanto the ability to quickly see that their genetically engineered seeds gets into the hands of many farmers. DeKalb Genetics currently controls 11% of the U.S. market for corn seed. Delta & Pine Land, based in Scott, Miss., is the top U.S. breeder, producer, and seller of cotton seed; it also sells soybean seed. Currently Monsanto owns 4.7% of Delta & Pine's common stock.

* Monsanto Co. and Empresas La Moderna S.A., a Mexican biotechnology company, have signed an agricultural technology collaboration agreement with Mendel Biotechnology Inc. Monsanto and Empresas will have exclusive access to Mendel's technical capabilities in plant genetics and genomics for several crops, including corn and soybeans and fruits and vegetables. Mendel identifies the function of genes and patents the corresponding DNA sequences that will produce the intellectual property basis for the next generation of agricultural products created through biotechnology.

* Positioning itself for greater sales of its genetically engineered seed, Monsanto acquired the closely held Holden's Foundation Seeds Inc. and its exclusive sales agents for $1.02 billion. Holden's, a corn-seed seller based in Williamsburg, Iowa, and Corn States Hybrid Service Inc. and Corn States International. Corn States, based in Des Moines, Iowa, raises so-called foundation seed, used by many of the Midwest's small, local seed companies to grow their own brand of hybrid corn seed for sale to farmers. More than 35% of U.S. corn acres are planted with seed developed from Holden's genetic material. Analysts, according to the Wall Street Journal, say that the company's ties to those mom-and-pop seed companies could prove vital in the marketing of genetically engineered seed, which is what made the company so attractive to Monsanto.

* In April, 1997 Monsanto Co. signed a contract with Calgene Inc. to acquire the remaining Calgene shares it doesn't already own for $8 a share, or about $240 million. At the time Monsanto owned 36.4 million Calgene common shares, or about 55% of the outstanding Calgene shares. Calgene, based in Davis, Calif., introduced the Flavr Savr genetically altered tomato in 1994.

* Recently Cargill Inc., the nation's largest private corporation and the world's leading grain trader, and Monsanto Co. announced the signing of a letter of intent to form a worldwide joint venture to create and market new products enhanced through biotechnology for the grain processing and animal feed markets. The 50-50 joint venture would draw from Monsanto's capabilities in genomics, biotechnology and seeds and from Cargill's global agricultural input, processing and marketing infrastructure to develop and market new products.

The venture is the first to create a system that links biotechnology research and development from seeds through processing to the customer, said Monsanto. The joint venture will focus on applying biotechnology to improve feed products for animals raised for human consumption, such as pork, beef, poultry and fish. It also will develop and market feed additives grown in crops using biotechnology and create and market crops with traits designed to reduce costs and improve yields for the wet and dry milling, oil seed crushing and refining, feed compounding and other processing industries. Monsanto and Cargill also said they plan to explore future opportunities to expand the partnership into agriculture and food.

Following the announcement of this agreement rumors persisted among investors that DuPont, Monsanto's arch-rival, was seeking a possible merger-acquisition with Cargill's chief competitor, Archer Daniels Midland, corporate agribusiness' "Supermarkup to the World."

Even more stunning news, however, came soon after the Cargill-Monsanto agreement when it was announced on June 1 that American Home Products, the East Coast-based drugs and pharmaceutical group, will, in effect, take over Monsanto in a $34 billion merger thereby creating a broad-based "life sciences" group encompassing pharmaceuticals, agricultural products and food ingredients. The combined stock market valuation of the two companies is $96 billion.

Hope Shand of Rural Advancement Fund International (RAFI) in Pittsboro, N.C., who has been relentlessly tracking developments in the biotech industry for many years, estimates that the proposed merger would make the yet-to-be-named company number three in the world in seeds, number one in agrichemicals (surpassing Novartis!), and possibly allow it to jump to number four in pharmaceuticals!

Clearly the merger is one of the most dramatic moves in the growing biotech industry, an industry that includes DuPont, Novartis of Switzerland, Hoechst and Bayer of Germany, Rhône-Poulenc of France and Zeneca of the United Kingdom. The new company, in which AHP will hold a 65 percent stake, will have annual sales of about $23 billion, will employ 75,000 people and put about $3 billion a year into research and development.

By agreeing to merge with Monsanto Co. AHP has established a strong foothold in the growing biotechnology field, while Monsanto deals with important growth issues relative to its pharmaceuticals business. Analysts note that by teaming up with AHP, a leading pharmaceutical company with a strong international presence, Monsanto will get access to the marketing and research and development resources it needs to grow its pharmaceuticals operations adequately. With the addition of American Home Products' American Cyanamid Co. unit, Monsanto will get some additional marketing power for its agricultural chemicals.

"The bottom line is (that) Monsanto was getting more and more resource-constrained," Donald Carson, chemicals analyst at J.P. Morgan Securities Corp. told the Journal. Meanwhile, American Home Products will get to add to its portfolio what many consider to be the premier company in the fast-growing area of agricultural biotechnology, and one where AHP was lacking.

In its pursuit of seeking to dominate the biotech marketplace Monsanto has received sharp criticism for the variety of the means it has pursued in seeking market dominance.

"We call it terminator technology," said Shand, RAFI's research director. "It will force farmers to return to the same company year after year for their seeds." Shand was singling out a new technique, developed by USDA researchers and the Delta and Pine Land Co., that makes seeds sterile. The technique has been sowing controversy among critics who say it will protect big-business profits while unfairly ending the age-old farm practice of saving a crop's seeds for next year.

Monsanto Co. recently offered a total of several million dollars to some Mississippi Delta farmers who said the company's Roundup Ready cotton seed delivered inferior yields. The offer, first reported by the New York Times, was to settle complaints, filed last summer by about 60 to 70 Delta farmers, that the genetically engineered seed produced yields that were lower than expected. The cotton seed was created to resist harm from crop spraying with Monsanto's Roundup herbicide. Monsanto spokesperson Scarlett Foster said the situation was "extremely unusual." It was, she said, "an isolated incident," of the under performing cotton seed. "Our studies indicate it wasn't technology but rather extreme and unusual weather patterns."

Last April the Omaha World-Herald reported that Monsanto was sending "seed cops," into Nebraska's farming communities bent on building cases of seed piracy against local dealers, in a bizarre twist in a new era for farming, when a company's seed patents conflict with a tradition of saving seed from a harvest to plant in another year. The incident, the paper noted, testified to the hardball that a company was willing to play to nab violators, going so far as to send undercover "seed cops" to follow up on tips and rumors. Monsanto Co. said it had hired Pinkerton detectives to investigate hundreds of tips in 20 states about illegal sales of Roundup Ready soybean seed.

Following the European Union's 1997 opposition to genetically modified crops Bernard Auxenfans, the executive vice president international of Monsanto Europa S.A./N.V., said the E.U.'s biotechnology regulations would severely damage the E.U.'s position on the world food market. "The biotechnology industry in Europe will lag behind the U.S. and South America, who have fully accepted genetically modified crops," Auxenfans said at a conference on agriculture, food and trade.

The Monsanto vice president, however, quickly came under fire from producer and consumer groups in the U.S. and the E.U. Jill Johnstone, head of policy at the U.K.'s National Consumer Council, attacked Monsanto for underestimating the consumer and for providing a one-sided argument.She said, "I note he does not mention the risks. Information on its own is not enough, nor will greater understanding necessarily put consumers at rest," she added. "Consumers will believe in the benefits of genetically modified technology when they see them for themselves."

In November 1996 Monsanto Co. agreed to alter its advertising of its spray-on glyphosate-based herbicides, including Roundup in New York State after the state's attorney general complained its ads were misleading. Attorney General Dennis Vacco said Monsanto was touting its herbicides as being safer than table salt and "practically non-toxic" to mammals, birds and fish. "Monsanto's use of the term `practically non-toxic' is not the broad assurance of safety the public is led to believe," Vacco said. "Because all pesticides are toxic, at least to some degree, such a safety claim is never appropriate."

Vacco's office also objected to a Monsanto advertisement the previous year showing a homeowner with his head in the soil and a dog standing nearby. The announcer said, "Roundup can be used where kids and pets play, and breaks down into natural material." Under the deal, Monsanto agreed to remove the objectionable references from its advertisements in New York state such as claiming the weed killers are "biodegradable" and "environmentally friendly." The company also agreed to drop a claim that "Roundup stays where it is put" and not compare the toxicity of the weed killers with common household items like table salt.

At the same time a study renewed questions about a possible link between aspartame and brain cancer, although the sweetener's principal manufacturer, Monsanto Co.'s Nutrasweet Kelco Co., disputed the claims. In an article in the Journal of Neuropathology and Experimental Neurology published in October 1996, John Olney of Washington University in St. Louis cited an increase in brain tumors following aspartame's introduction in 1981 and called for more study to "reassess the carcinogenic potential" of the product.

Dr. Olney, a longtime critic of aspartame, found no direct link between aspartame and brain cancer. But he cited statistics on brain tumors from the U.S. National Cancer Institute and an animal study to conclude that the sweetener may have played a role in the mid-1980s in a rise in the number of brain tumors, to an average of 53 per million people from 48 per million in the 1970s. Monsanto maintains that aspartame is the most-tested food ingredient in the world. An official at the Food and Drug Administration said the agency has reviewed aspartame's safety 26 times during the past 23 years and reaffirmed the product's safety for use in food and beverages. Aspartame is most commonly consumed in diet soft drinks.

Reporting on the controversial bovine growth hormone rBGH, which reportedly increases a cow's milk production by one third, can be hazardous to a journalism career, as two award-winning investigative reporters found when they found the Fox-owned television station WTVT-13 in Tampa, Florida, would not broadcast their findings that use of the hormone was widespread in Florida despite promises by the state's supermarkets that they would not sell milk from treated cows until the hormone gained acceptance by consumers. [See story on page 12.]

The FDA approved the artificial hormone in 1993, but some researchers suspect links to cancer. The hormone is banned throughout Europe and is unapproved in several other countries because of human health concerns.

Whether consumers are to learn what food they serve on their tables is genetically engineered, whether farmers will be forced to pay an increasing quantitative and qualitative price for the right to farm in this new "agricultural biotechnology revolution," whether the safety and the health of people and the environment in which they live will become subordinate to the bottom lines of the Monsanto's, DuPonts and Novartises are questions that now await to be answered.

A.V. Krebs is director of Corporate Agribusiness Research Project, P.O. Box 2201, Everett, Wash. 98202-0201; http://www.ea1.com/tiller/

Hormone Controversy
Costs Reporters' Jobs

The controversial bovine growth hormone rBGH, which reportedly increases a cow's milk production, is defended by its manufacturer Monsanto against fears of scientists who believe use of the hormone poses health risks to milk drinkers. Jane Akre and Steve Wilson, two award-winning investigative reporters at the Fox-owned television station (WTVT-13) in Tampa, Florida, found out the hormone was to be defended at any cost.

The husband-and-wife investigative team are blowing the whistle on a story they allege WTVT and its corporate bosses preferred to cover up rather than broadcast honestly and accurately. Although the story never was broadcast, it was documented in a lawsuit the reporters have filed in Florida district court. The lawsuit reveals the widespread use of the rBGH hormone that Florida dairymen have been secretly injecting into their cows. The story, which has been ignored by the nation's major media, is presented in full detail at an Internet website: http://www.foxbghsuit.com

Although approved by the FDA in 1993, the artificial hormone has been linked to cancer and is banned throughout Europe and several other countries because of human health concerns.

The reporters found that Florida supermarkets quietly reneged on promises not to sell milk from treated cows until the hormone gained widespread acceptance by consumers. All major supermarkets now admit rBGH has found its way into virtually all of Florida's milk supply.

The reporters, in their suit, allege that Monsanto pressured Fox television (owned by Rupert Murdoch's multi-national News Corp.) not to broadcast the story. They claim the TV station violated the state's whistleblower act by firing the journalists for refusing to broadcast false reports and threatening to report the station's conduct to the FCC. Their complaint also claims the station violated the reporters' contracts in dismissing them for those reasons and it seeks a ruling from the court to determine to what extent the reporters' contractual obligations limit their ability to speak freely about the rBGH issue.

The journalists filed the suit after struggling with Fox executives for most of 1997 to get the story on the air. They say they submitted over 70 drafts of scripts, all of which were found "unacceptable" by the station. According to court papers, they were ultimately dismissed December 2, 1997.

"Every editor has the right to kill a story and any honest reporter will tell you that happens from time to time when a news organization's self-interest wins out over the public interest," said Wilson, the station's former senior investigative reporter who helped Akre produce the story and is now one of the plaintiffs.

"But when media managers who are not journalists have so little regard for the public trust that they actually order reporters to broadcast false information and slant the truth to curry the favor or avoid the wrath of special interests as happened here, that is the day any responsible reporter has to stand up and say, 'No way!' That is what Jane and I are saying with this lawsuit," Wilson said.

"We are parents ourselves," Akre said. "It is not right for the station to withhold this important health information and solely as a matter of conscience we will not aid and abet their effort to cover this up any longer," she said. "Every parent and every consumer have the right to know what they're pouring on their children's morning cereal."


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