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October 5, 2009
· Hawaii is seed corn industry’s Garden of Eden
· Pioneer and Monsanto locked in biotech tug-of-war
· UK beekeepers tell pesticide firm to buzz off
· AGCO to pay $1.6M in corruption settlement
· Dow and Purdue partner on life sciences venture
Hawaii
(Honolulu Advertiser) By Andrew Gomes
Central America may be the original birthplace of corn, but Hawai'i for many years has been involved in the gestation of just about every corn plant grown from seed cultivated by the world's largest commercial seed producers.
If it's in the supermarket, fed to livestock or used to make
fuel or other industrial products such as plastics and fiber, chances are the
corn is from seeds at least partly developed in
Corn seed companies have had a presence in
In the past decade, industry growth has soared from about $30 million to $177 million last year as molecular breeding technology has became cheaper and faster, and more companies have set up or dramatically expanded local operations.
James Brewbaker, a professor of plant breeding and genetics at the University of Hawai'i, predicts that the state's seed crop industry could level off at $200 million to $250 million in annual spending — roughly the annual average value of sugar cane production in the 1980s before its precipitous decline.
"There is still a lot of growth that needs to happen," said Jonathan Bryant, managing director of plant science for BASF Corp., which is one of five global seed companies operating in the state.
low profile
Despite being the state's top crop by production value, seed research has largely been a low-profile industry where consumers never see what's produced by the seed growers at the farmers market or the grocery store produce section.
The five seed companies — BASF, Dow AgroSciences,
Monsanto, Pioneer Hi-Bred International and Syngenta
— operate 10 farms on O'ahu,
Corn seed is the core product, though some of the companies also work with soybean, wheat, sunflower, rice, rapeseed and sorghum.
Seed production primarily involves studying plant genes and properties, breeding plants with desired genes both traditionally and using biotechnology, testing the resulting plants, and, finally, growing large quantities of favorable plants to produce parent seed that is sent to the Mainland for mass reproduction and sale to farmers.
The entire process from gene selection to corn planted in a farmer's field can take anywhere from one to seven or so years.
"We're able to get product to market quicker,"
said Laurie Goodwin,
The seed companies tailor seeds for specific climates, soil conditions and to be more suitable for everything from pest resistance and herbicide tolerance to nitrogen utilization and draught tolerance. Other traits include stalk strength, oil content, starch content and even enabling livestock to use more protein from feed corn they eat.
Combinations of traits, referred to in the industry as smart stacking, result in thousands of varieties of seed.
Most of the industry's work in
using chemicals
Some of this innovation, however, is opposed by environmental groups that say developing herbicide and pesticide-resistant crops encourages greater and more indiscriminate use of chemicals that aren't good for the environment.
Industry critics also believe genetically modified food can be harmful, and fear that genetically altered plant traits threaten the ecosystem if genes accidentally spread to other plants.
The Hawai'i Crop Improvement Association, a trade group for
the seed industry, said 50 percent of seed industry breeding in the state
involves genetic modification, which includes inserting genes into corn plants
from other organisms. The industry said it takes great precaution to ensure
traits are not spread to other plants, and notes that one benefit to conducting
the work in
Paul Achitoff, an attorney with Earthjustice in
California-based Earthjustice in
2003 filed a federal lawsuit in
The lawsuit led to a requirement for the U.S. Department of
Agriculture to disclose where such biopharmaceutical crops are tested. Though
four entities, including Monsanto and what is now a subsidiary of Syngenta, had permits for biopharmaceutical testing in
Achitoff said permit data shows no biopharmaceutical tests have occurred since then. But identifying what kind of genes from what kind of organisms are being introduced to corn and other crops is often kept confidential for competitive reasons.
"They have guarded their secrecy to a remarkable degree," he said.
Another criticism of the seed industry is that it doesn't have the same value as other crops like coffee or tomatoes that are grown by farmers and bought by consumers.
The seed industry dethroned pineapple as the state's "biggest" crop in 2006 based on crop "value." But unlike other crops where the value is measured by sales, the seed industry is measured by operating expenses, excluding land purchases, because the seed produced isn't sold.
Operating expenses for other crops would be less than sales in profitable years, so the seed industry's ranking is not disputed. But Achitoff questions the value of an agribusiness that uses farmland and water but produces no food here.
"Virtually none of the product is staying in
The seed industry counters that it uses relatively little farmland compared with other crops and drastically less water than sugar cane, while providing higher-paying jobs.
expansion mode
According to a July study commissioned by the Hawai'i Farm Bureau Federation, 14 percent of the seed industry's jobs are in the high-tech sector, helping produce an average annual wage last year of $39,824, compared with $30,960 for the state's agricultural sector overall and $41,630 for all Hawai'i jobs.
Seed companies employed 1,863 people last year. That represented 23 percent of all agricultural jobs in the state, and compares with 1,100 for sugar cane and pineapple combined.
Also, the seed industry points out that
"It's one bright spot in the economy," said Adolph Helm, head of local operations for Dow AgroSciences.
Dow AgroSciences earlier this year leased 3,400 acres of land from Gay & Robinson Inc., which is winding down sugar cane production on Kaua'i.
Dow, which conducts mostly research and development work on nearly 500 acres on Moloka'i with 50 employees, is expanding on Kaua'i to grow out dramatically more parent seed. Helm said the company expects to hire close to 20 full-time employees to start up, including some formerly with Gay & Robinson.
Growing out parent seed is also where Pioneer has recently expanded operations, according to Cindy Goldstein, the company's local business and community outreach manager.
Syngenta has been in expansion mode after buying 848 acres of former pineapple and sugar cane land in Kunia on O'ahu last year. The company is seeking to hire 30 full-time employees on Kaua'i at a job fair on Saturday.
BASF is the newest seed company to
Paul Koehler, scientific and community affairs manager for
Monsanto in
"Like the technology for computers, cell phones and hybrid vehicles, everyone wants the latest and greatest widget," he said. "The seed industry is no different. There's a great deal of demand for improved plant genetics."
Pioneer and Monsanto locked in biotech tug-of-war
(DesMoinesRegister.com) By Dan Piller
The once folksy seed business has taken on a harder edge.
Lawsuits. Accusations of dirty tricks and illegal acts. An impending federal antitrust investigation.
The battle is over biotechnology in seed traits. Altered genetic traits in seed germplasm have helped farmers double their yields in the last third of a century by producing corn and soybeans that can stand up better to wind, excessive moisture, plant diseases, herbicides and insects.
"Biotech has done a lot for the farmers," Iowa Secretary of Agriculture Bill Northey said. "But the need for traits has made the seed business a lot more competitive."
The two companies have traded lawsuits and name-calling, and
the battle has reached
U.S. Secretary of Agriculture Tom Vilsack said he warned Monsanto Chairman Hugh Grant this year of the growing perception that the company unfairly controls the biotech corn and soybean seed industry.
"I expressed my concern, and Monsanto definitely has a sensitivity to the issue," Vilsack
said during a recent visit to
Vilsack and U.S. Attorney General Eric Holder announced a general investigation of competitive practices in agriculture beginning early next year.
The investigation will examine "issues relating to
patent and intellectual property affecting agricultural marketing or
production," according to a news release - an indication that
Monsanto has sued Pioneer, claiming infringement on patents for Monsanto's "Roundup Ready" traits in Pioneer's new "Optimum" seeds the company hopes to introduce by 2011 or 2012. The seeds resist Monsanto's popular Roundup herbicide, which has dominated farm fields for two decades.
Pioneer and its parent company, DuPont, countersued, accusing Monsanto of antitrust violations. Monsanto is using the herbicide's popularity to compel seed companies to use the Monsanto-licensed technology in their seeds, Pioneer's lawyers say.
"It's a good parallel to suggest that Monsanto has used Roundup seed traits the same way Microsoft used its Windows operating system, to lock out competitors," said Don Flexner, a managing partner in a Washington, D.C., law firm headed by David Boies that is representing DuPont and Pioneer.
Boies prosecuted Microsoft a decade ago when he was chief of the U.S. Justice Department's antitrust division. A court ruled that Microsoft used the licensing of its Windows operating systems, widely installed in new computers, to lock out rival software for Internet access and other functions.
Microsoft, as part of the settlement, was obligated to open Windows to other applications.
Monsanto spokesman Lee Quarles rejects the parallel to Microsoft.
"If you look at our history since we entered the biotech and seed businesses, you can see that we have actively licensed our genetic traits with a large number of seed companies," Quarles said.
The largest seller of seed with Monsanto's genetic traits? Pioneer, notes Quarles.
Since 2002, competitive pressures have forced Pioneer to license Roundup Ready traits from Monsanto for Pioneer seed. The amount Pioneer paid to Monsanto from 2002 to 2007 was on a per-unit basis and has not been reported.
But beginning in 2007, Pioneer was obligated to pay Monsanto $725 million in license fees through 2015. The latest annual report filed with the Securities and Exchange Commission by Pioneer's parent DuPont shows a balance of $590 million remaining.
Executives launch war of words
Monsanto's executives hit the roof last summer when it was inadvertently revealed that Pioneer was helping to fund an anti-Monsanto advocacy group.
DuPont acknowledged its funding of the Organization for
Competitive Markets, which held a conference last summer under Monsanto's nose
in its hometown of
Grant, in a letter to DuPont Chairman Charles Holliday, said the funding of the organization went "far beyond honest competitive behavior."
DuPont executive James Borel said Monsanto's anti-competitive behavior was "more of what we have come to expect from them."
Pioneer's products try to cut Monsanto lead
Pioneer has learned the hard way what happens when a company falls behind in the new biotech world. St. Louis-based Monsanto has used its lead in biotechnology to displace Pioneer as the nation's No. 1 seed seller.
Since the early 1990s, Pioneer has seen its market share
slip from just under 50 percent to about 30 percent. Monsanto, whose seed
stable includes DeKalb, Asgrow, Kruger, Fontanelle, Crow's and
Pioneer made development of an alternative to Roundup Ready traits a major corporate goal, and in 2006 announced the introduction of a new Optimum line of seeds that mix Monsanto's Roundup Ready with other Pioneer traits in what is known in the seed business as "stacking." The Optimum lines originally were to be introduced next year but have been delayed, Pioneer says, in getting regulatory approval in foreign countries.
Flexner, Pioneer's lawyer, said the company intends to honor its licensing payment commitment through 2015. The company has not discussed its attitude toward licensing beyond that date.
Monsanto contends that use of its trait in stacking violates the Roundup Ready licensing agreement.
"We don't want Roundup Ready to be mixed with other
traits because then we have no control over the quality or results, even though
we could potentially have some liability if the performance of those Pioneer
seeds wasn't satisfactory," said Ted Crosbie,
who heads Monsanto's global breeding operations from
Crosbie says that rather than pointing fingers, Pioneer should look in the mirror.
"Pioneer's problem is that their seed technology is defective," Crosbie said. "That's what has hurt them in the marketplace."
Pioneer gains ground as seed sales rise
Pioneer, urged on by parent DuPont, is fighting back.
In the last year Pioneer has reclaimed three percentage points of market share in soybean sales and two percentage points for corn, Pioneer president Paul Schickler told an investment conference in September.
Neither company is hurting financially.
Pioneer is the star in the DuPont firmament. While DuPont doesn't break out Pioneer's specific numbers, its ag and nutrition segment contributed $580 million of DuPont's $872 million in segment operating profits in the latest quarter ending June 30.
DuPont boasted a 21 percent increase in seed sales from the same quarter a year earlier.
Monsanto is now justified in calling itself "an agricultural company." Its latest quarterly report shows that of its $1.8 billion in pretax profit, $1.4 billion came from seeds and genetics.
The numbers demonstrate that there is room enough in the seed and genetics business for both Monsanto and DuPont to profit, which raises the question of what causes the companies to fight each other so savagely.
But history suggests that biotechnology can have the same radical effect on a company's market share and bottom line as it does on the genetic lines of seed germplasm.
Some in
John Latham worked for a while at Pioneer a decade ago before returning to his family's seed company.
"The seed business has always been friendly, even among competitors. You'd go to the ag shows, and afterwards everybody would go out together and have a good time," he said.
"But lately there's has been more animosity than anybody can remember," Latham said.
"A smaller company like ours actually may be helped, because a lot of people are put off by all the name-calling, the bad blood. But it's sad anyway."
-------------------------------------
Licensing deals very secretive
Licensing fees are secret, but tales abound in the
Myron Stine’s family is one of many smaller independent seed
companies that dot the
“But you have a company that’s dominating on the trait side,” Stine said. “Smaller companies need the traits in their seeds. Those companies are less likely to be able to afford not only all the research, but the expense of licensing in two dozen foreign countries where the seeds will be sold.”
Stine adds: “Licensing hasn’t been presented to brands on a level playing field. A federal investigation is probably needed.”
How much of the genetic trait market Monsanto controls is unknown, but spokesman Lee Quarles denies reports that it has 90percent of seed trait licensing. He said Monsanto has about one-third of the licensed seed traits in the market.
John Latham of Alexander, whose family has been in the seed business for more than six decades and also is a Monsanto licensee, said: “We have to get along with everybody. But you hear talk that not all licensing deals are equal.”
Clash of cultures
Given Monsanto’s history, any controversy dogging the company should be of little surprise.
Monsanto’s numerous critics include environmentalists riled
up about its manufacture of 2,4D and DDT, and remnants of the
Monsanto and Pioneer stayed out of each other’s way until the mid-1990s. Until then, Monsanto dominated agriculture on the herbicide end of the business with its Lasso and Roundup weed sprays, and Pioneer dominated the corn and soybean seed markets.
The biotech revolution leapfrogged the slow evolution of hybrid breeding by adding and substituting genetic DNA into seed germplasm.
For an old-line seed company like Pioneer Hi-Bred, Monsanto’s splicing of genes in the sacred germplasm of seeds was the equivalent of a rapper invading a classical symphony concert.
In “Lords of the Harvest,” published in 2001, author Daniel Charles depicted the Monsanto/Pioneer rivalry as “the ultimate clash of corporate cultures.”
“Monsanto flaunted its success,” Charles wrote. “Pioneer tried to hide it. Monsanto was from the city. Pioneer was from the country.”
Charles told how Pioneer’s plant breeders, carrying the tradition of Henry Wallace, simply couldn’t believe that Monsanto and its genetic alterations could change the industry.
In 1997 and 1998, Monsanto entered the seed side of the business when it bought the DeKalb and Asgrow corn and soybean seed companies. Monsanto promptly added its “Roundup Ready” genetic traits to those companies’ seeds.
Since Roundup was used by up to 90 percent of farmers, Monsanto had laid down a clear challenge to the long-dominant Pioneer.
How much will farmers pay?
Farmers have endured the tripling of average seed prices to as much as $300 per bag for the newest highest-tech lines of corn seed. One bag covers about 2.5 acres.
U.S. Department of Agriculture surveys show up to 90 percent
of
“I know that you get more for the seed today than before,”
said Randy VanKooten, who farms near
Additional Facts
The road to confrontation
Sweeteners, pesticides and hybrid corn have marked the histories of Monsanto and Pioneer Hi-Bred.
1901 - John F. Queeny of
1926 - Henry A. Wallace founds Hi-Bred Corn Company in
1930 -
1944 - Monsanto and 14 other companies begin manufacturing DDT pesticide.
1945 - Monsanto produces and markets agricultural chemicals.
1960 - Monsanto establishes agricultural division.
1961 - Monsanto becomes one of several
1968 - Monsanto introduces Lasso agricultural herbicide.
1970 - Pioneer establishes an international department and changes name to Pioneer Hi-Bred International Inc.
1973 - Pioneer begins soybean seed operation.
1975 - Monsanto introduces glyphosate Roundup herbicide to eventually succeed Lasso.
1976 - Monsanto establishes molecular biology group to focus on biotechnology.
1981 - Monsanto buys first seed company, soybean producer Jacob Hartz Soybean Seed Co.
1982 - Pioneer's annual worldwide sales surpass 10 million
units, takes No. 1 position in
1982 - Monsanto claims first genetically modified plant cell.
1987 - Monsanto conducts its first field trials of plants with corn borer resistant biotechnology traits.
1991 - Pioneer takes No. 1 soybean seed market share in
1995 - Monsanto and Pioneer agree to combine Pioneer's corn germplasm with Monsanto's corn borer resistance traits.
1996 - Monsanto introduces Roundup Ready soybeans.
1997 - Pioneer introduces its first biotech corn and soybean seeds. DuPont buys 20 percent of Pioneer. Monsanto buys soybean seed company Asgrow.
1998 - Monsanto buys Dekalb corn seed company, introduces Roundup Ready corn and YieldGard corn borer protection.
1999 - DuPont buys Pioneer for $7.7 billion.
2001 - Monsanto introduces Roundup Ready Corn 2, sparks lawsuits with Pioneer over use of Roundup Ready traits.
2001 - Pioneer agrees to pay $56 million in licensing to use Monsanto's anti-corn borer YieldGard traits.
2002 - After suing each other over use of Roundup Ready traits, Monsanto and Pioneer agree to a licensing agreement giving Pioneer the right to use Roundup Ready genetics.
2003 - Monsanto begins gene trait "stacking" by putting both Roundup Ready and YieldGard protection in one seed.
2004 - Monsanto introduces YieldGard Plus corn, which stacks two YieldGard products in one seed product, buys Crow's Hybrid Corn, Midwest Seed Genetics and Wilson Seeds.
2005 - One billionth acre of biotech crops planted worldwide.
2006 - Pioneer announces Optimum GAT seed traits in 2010 to replace its licensed Roundup Ready lines.
2007 - Monsanto and Pioneer modify the existing per-unit Roundup Ready license to provide for specified annual royalty payments by Pioneer to Monsanto totaling $725 million through 2015.
2008 - Pioneer and Monsanto begin mediation over Monsanto's objection to Pioneer's planned use of Roundup Ready traits in Optimum GAT seeds.
2009 - Monsanto sues Pioneer over Roundup Ready patent infringement in Optimum GAT, Pioneer countersues alleging restraint of trade. Pioneer funding of anti-Monsanto activist group becomes known, U.S. Secretary of Agriculture Tom Vilsack and Attorney General Eric Holder announce plans to investigate competition in seed industry.
Sources: Company documents and SEC filings
UK
(CommonDreams.org) By Rob Edwards
One of the world's biggest pesticide companies, Syngenta, has been accused of a "howling conflict of interest" for funding research into the disappearance of honeybees - a problem which some people claim it may have helped cause.
Syngenta, based in
It now also co-funds a £1m project in the
A film due to open in cinemas this week highlights the global plight of the honeybee and argues that insecticides are partly to blame. Called Vanishing Of The Bees, it is backed by the Co-operative retail group, which has a strict policy on the use of pesticides on the fruit and vegetables it sells, including a total ban on the use of several chemicals.
According to beekeepers, honeybee populations in the
Scientists speculate that a combination of factors may be involved, including disease, mites, weather and modern farming practices. But some argue that a group of widely-used nicotine-based insecticides known as neonicotinoids could be inflicting neural damage on bees, and contributing to their demise. Syngenta sells two products containing neonicotinoids, Actara and Cruiser.
To protect bee populations, some such insecticides have been
banned or restricted in
A coalition of environmental groups has launched a campaign
for a ban on neonicotinoids in the
Its Scottish director, Hugh Raven, said Syngenta had made its position clear by opposing a ban on neonicotinoids.
"The taint of commercial interest has undermined this research before it's even started," he said.
The research is also supported by the government's Biotechnology and Biological Sciences Research Council. "The BBSRC should think again, and get a co-funder without this howling conflict of interest," said Raven.
Professor Andrew Watterson, head of the occupational and
environmental health research group at
Graham White, a beekeeper in the Scottish Borders and an
environmental author, was scathing about Syngenta's
role: "Putting Syngenta in charge of
But Andrew Coker, Syngenta's head
of corporate affairs in the
Dr Celia Caulcott, BBSRC's director of innovation and skills, also defended the research. She said: "The use of insecticides in agriculture is just one possible reason for the problems bees are facing. The most important thing to do right now is to understand what is happening and then translate that knowledge into actions to address the decline."
AGCO to pay $1.6M in corruption settlement
(AP
via Yahoo! News)
Federal prosecutors had charged the Duluth, Ga.-based AGCO with one count of conspiracy to commit wire fraud and conspiracy to violate record keeping provisions of the Foreign Corrupt Practices Act. However, the charges will be dropped after three years as long as the company cooperates with authorities, under the terms of the agreement.
According to the agreement, AGCO paid about $553,000 to the
former government of
Debra Kuper, general counsel for AGCO, said the company was pleased the matter was resolved. AGCO, which confirmed the agreement with the Justice Department, has since implemented a new compliance program to prevent similar problems, Kuper said.
Charges against AGCO will be dropped after three years as long as the company cooperates with authorities, the Justice Department said.
AGCO also reached a settlement with the U.S. Securities and Exchange Commission, agreeing to pay a civil penalty of $2.4 million, and another approximately $16 million related to 16 oil-for-food contracts.
The international company was founded in 1990 and had $8.4 billion in sales in 2008.
Dow and Purdue partner on life sciences venture
(Wire Services)
Dow AgroSciences will become one
of the largest tenants at the Purdue Research Park of West Lafayette, occupying
15,000 square feet of research and office space in the newly built Herman and
In addition, Dow AgroSciences will
be the exclusive tenant of a 6,000-square-foot greenhouse complex to be
constructed on the south side of
The Indiana Economic Development Corporation will support the Purdue Research Foundation in the construction of the $2.2 million greenhouse research center with a grant to assist in development costs.
Up to 30 new scientists will be working in the
"The power of collaboration with Purdue is immense, and
the many elements of this project will bring great advancement to our
biotechnology efforts. We are very grateful to the IEDC for being a
foundational player in what is a wise investment for the state of
The project is an important step in Dow AgroSciences'
global technology development plans, and activity at
"As a land-grant university, Purdue has a long, rich
history in agricultural and life sciences research with innovative faculty and
strong outreach programs through our Extension offices and other
projects," said Purdue President France A. Cordova. "The Dow AgroSciences project is a perfect example of how our
collaborations with industry and the state can generate new research that will
ensure
Purdue officials worked closely with state leaders to keep
the project in
"A primary strategy of the state's economic development effort is to promote the growth and commercialization of key research developments within our state, and this exciting partnership clearly meets that objective," said Mitch Roob, Indiana Secretary of Commerce and chief executive officer of the IEDC. "Bringing together the agriculture and biotechnology strengths of both Dow AgroSciences and Purdue makes perfect sense, and we are happy to support their future success."
Dow AgroSciences will join the more than 160 companies already in the Purdue Research Park of West Lafayette.
"We are happy to welcome Dow AgroSciences
to the Purdue Research Park of West Lafayette," said Joseph B. Hornett, senior vice president, treasurer and COO of the
Purdue Research Foundation, which manages the
Jay Akridge, the Glenn W. Sample Dean of Agriculture, and other agricultural researchers and leaders have worked with the scientists at Dow AgroSciences. He said partnering with Dow AgroSciences creates opportunities for faculty, students and agricultural producers.
"
West Lafayette Mayor John Dennis said that a Dow AgroSciences research facility and greenhouse in
"We are delighted that Dow AgroSciences
will have a presence in our city," Dennis said. "Their international
reputation in the area of agricultural research and science will add even more
depth to the economic diversity we are cultivating in
Created by Gov. Mitch Daniels in 2005 to replace the former Department of Commerce, the Indiana Economic Development Corporation is governed by a 12-member board chaired by Daniels. Indiana Secretary of Commerce Mitch Roob serves as the chief executive officer of the IEDC.
Dow AgroSciences LLC, based in
The 725-acre
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