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December 14, 2009
· Monsanto seed business practices revealed
· Research seeks to control honeybee parasite
· US offers growers production security software
· Jeb Bush keynote speaker at 2010 United Fresh
· Walkout spurs fears of climate talks failure
Monsanto seed business practices revealed
(AP via Seattlepi.com) ST. LOUIS — Confidential contracts detailing Monsanto Co.'s business practices reveal how the world's biggest seed developer is squeezing competitors, controlling smaller seed companies and protecting its dominance over the multibillion-dollar market for genetically altered crops, an Associated Press investigation has found.
With Monsanto's patented genes being inserted into roughly 95 percent of all soybeans and 80 percent of all corn grown in the United States, 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.
Monsanto's methods are spelled out in a series of confidential commercial licensing agreements obtained by the AP. The contracts, as long as 30 pages, include basic terms for the selling of engineered crops resistant to Monsanto's Roundup herbicide, along with shorter supplementary agreements that address new Monsanto traits or other contract amendments.
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.
For example, one contract provision bans independent
companies from breeding plants that contain both Monsanto's genes and the genes
of any of its competitors, unless Monsanto gives prior written permission —
giving Monsanto the ability to effectively lock out competitors from inserting
their patented traits into the vast share of
Monsanto's business strategies and licensing agreements are
being investigated by the U.S. Department of Justice and at least two state
attorneys general who are trying to determine if the practices violate
The practices also are at the heart of civil antitrust suits filed against Monsanto by its competitors, including a 2004 suit filed by Syngenta AG that was settled with an agreement and ongoing litigation filed this summer by DuPont in response to a Monsanto lawsuit.
The suburban St. Louis-based agricultural giant said it has done nothing wrong.
"We do not believe there is any merit to allegations about our licensing agreement or the terms within," said Monsanto spokesman Lee Quarles. He said he couldn't comment on many specific provisions of the agreements because they are confidential and the subject of ongoing litigation.
"Our approach to licensing (with) many companies is pro-competitive and has enabled literally hundreds of seed companies, including all of our major direct competitors, to offer thousands of new seed products to farmers," he said.
The benefit of Monsanto's technology for farmers has been undeniable, but some of its major competitors and smaller seed firms claim the company is using strong-arm tactics to further its control.
"We now believe that Monsanto has control over as much
as 90 percent of (seed genetics). This level of control is almost
unbelievable," said Neil Harl, agricultural
economist at
At issue is how much power one company can have over seeds, the foundation of the world's food supply. Without stiff competition, Monsanto could raise its seed prices at will, which in turn could raise the cost of everything from animal feed to wheat bread and cookies.
The price of seeds already is rising. Monsanto increased some corn seed prices last year by 25 percent, with an additional 7 percent increase 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, company spokeswoman Kelli Powers said.
Monsanto's broad use of licensing agreements has made its biotech traits among the most widely and rapidly adopted technologies in farming history. These days, when farmers buy bags of seed with obscure brand names such as AgVenture or M-Pride Genetics, they are paying for Monsanto's licensed products.
One of the numerous provisions in the licensing agreements is a ban on mixing genes — or "stacking" in industry lingo — that enhance Monsanto's power.
One contract provision likely helped Monsanto buy 24 independent seed companies throughout the Farm Belt over the past few years: that corn seed agreement says that if a smaller company changes ownership, its inventory with Monsanto's traits "shall be destroyed immediately."
Another provision from contracts earlier this decade— regarding rebates — also helps explain Monsanto's rapid growth as it rolled out new products.
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. In its 2004 lawsuit, Syngenta called the discounts part of Monsanto's "scorched earth campaign" to keep Syngenta's new traits out of the market.
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.
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
"I would be so tied up in what I was able to do that basically I would have no value to anybody else," he said. "The only person I would have value to is Monsanto, and I would continue to pay them millions in fees."
Independent seed company owners could drop their contracts with Monsanto and return to selling conventional seed, but they say it could be financially ruinous. Monsanto's Roundup Ready gene has become the industry standard over the last decade, and small companies fear losing customers if they drop it. It also can take years of breeding and investment to mix Monsanto's genes into a seed company's product line, so dropping the genes can be costly.
Monsanto acknowledged that Department of Justice lawyers are seeking documents and interviewing company employees about its marketing practices. The DOJ wouldn't comment.
A spokesman for Iowa Attorney General Tom Miller said the
office is examining possible antitrust violations. Additionally, two sources
familiar with an investigation in
Monsanto chairman and chief executive officer Hugh Grant told investment analysts during a conference call this fall that the price increases are justified by the productivity boost farmers get from the company's seeds. Farmers and seed company owners agree that Monsanto's technology has boosted yields and profits, saving farmers time they once spent weeding and money they once spent on pesticides.
But recent price hikes have still been tough to swallow on the farm.
"It's just like I got hit with bad weather and got a
poor yield. It just means I've got less in the bottom line," said Markus Reinke, a corn and soybean farmer near
Any Justice Department case against Monsanto could break new ground in balancing a company's right to control its patented products while protecting competitors' right to free and open competition, said Kevin Arquit, former director of the Federal Trade Commission competition bureau and now an antitrust attorney with Simpson Thacher & Bartlett LLP in New York.
"These are very interesting issues, and not just for the companies, but for the Justice Department," Arquit said. "They're in an area where there is uncertainty in the law and there are consumer welfare implications and government policy implications for whatever the result is."
Other seed companies have followed Monsanto's lead by
including restrictive clauses in their licensing agreements, but their products
only penetrate smaller segments of the
Monsanto was only a niche player in the seed business just 12 years ago. It rose to the top because of innovation by its scientists and aggressive use of patent law by its attorneys.
First came the science, when Monsanto in 1996 introduced the world's first commercial strain of genetically engineered soybeans. The Roundup Ready plants were resistant to the herbicide, allowing farmers to spray Roundup whenever they wanted rather than wait until the soybeans had grown enough to withstand the chemical.
The company soon released other genetically altered crops, such as corn plants that produced a natural pesticide to ward off bugs. Although Monsanto had blockbuster products, it didn't yet have a big foothold in a seed industry made up of hundreds of companies that supplied farmers.
That's where the legal innovations came in, as Monsanto became among the first to widely patent its genes and gain the right to strictly control how they were used. That control let it spread its technology through licensing agreements, while shaping the marketplace around them.
Back in the 1970s, public universities developed new traits for corn and soybean seeds that made them grow hardy and resist pests. Small seed companies got the traits cheaply and could blend them to breed superior crops without restriction. But the agreements give Monsanto control over mixing multiple biotech traits into crops.
The restrictions even apply to taxpayer-funded researchers.
Roger Boerma, a research professor
at the
"It's made one level of our life incredibly challenging and difficult," Boerma said.
The rules also can restrict research. Boerma halted research on a line of new soybean plants that contain a trait from a Monsanto competitor when he learned that the trait was ineffective unless it could be mixed with Monsanto's Roundup Ready gene.
Boerma said he hasn't considered asking Monsanto's permission to mix its traits with the competitor's trait.
"I think the co-mingling of their trait technology with another company's trait technology would likely be a serious problem for them," he said.
Quarles pointed out that Monsanto has signed agreements with several companies allowing them to stack their traits with Monsanto's. After Syngenta settled its lawsuit, for example, the companies struck a broad cross-licensing accord.
At the same time, Monsanto's patent rights give it the authority to say how independent companies use its traits, Quarles said.
"Please also keep in mind that, as the (intellectual property developer), it is our right to determine who will obtain rights to our technology and for what purpose," he said.
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.
"If the independent seed company is losing their license and has to destroy their seeds, they're not going to have anything, in effect, to sell," Boies said. "It requires them to destroy things — destroy things they paid for — if they go competitive. That's exactly the kind of restriction on competitive choice that the antitrust laws outlaw."
Quarles said some of the Monsanto contracts let companies sell their inventory for a period of time, rather than be required to destroy it. Seed companies also don't have to pay royalty fees on the bags of seed they destroyed.
"Simply put, it was designed to facilitate early adoption of the technology," he said.
Some independent seed company owners say they feel increasingly pinched as Monsanto cements its leadership in the industry.
"They have the capital, they have the resources, they own lots of companies, and buying more. We're small town, they're Wall Street," said Bill Cook, co-owner of M-Pride Genetics seed company in Garden City, Mo., who also declined to discuss or provide the agreements. "It's very difficult to compete in this environment against companies like Monsanto."
Research seeks to control honeybee parasite
(PhysOrg.com)
-- Ground-breaking discoveries by
The MSU researchers for the first time were able to produce in the laboratory proteins that help channel sodium ions through cell membranes of parasites known as Varroa mites. The research, using cellular frog eggs, also found that these proteins react to chemicals differently than the sodium channel proteins in honeybees, a finding that could be a key to controlling the mites.
"The insecticide used to control Varroa mites, fluvalinate, targets the mite sodium channel," said Ke Dong, MSU professor of entomology. "But the mites are becoming resistant to fluvalinate. Successfully producing the mite sodium channel in the lab now allows scientists to develop new chemicals that target the mite sodium channel but don't affect the honeybee’s."
Fluvalinate paralyzes the mite and eventually kills it. But in addition to the problem of growing mite resistance, the pesticide can harm bees and contaminate honey if not used extremely carefully.
The MSU scientists also found two amino acids in the mite sodium channel that make the mite resistant to tetrodotoxin, or TTX, a deadly poison found in pufferfish not currently used as an insecticide
"Chemicals such as fluvalinate and TTX target sodium channels in insects and mites, so this basic research opens the door for more applied research on chemicals to control mites and other pest insects," Dong said.
Other members of the MSU team are Yuzhe Du, senior research associate; Yoshiko Nomura, visiting scholar; Zhiqi Liu, former research associate; and Zachary Huang, associate professor, all in the Department of Entomology.
Varroa mites invaded the
Varroa mites also may possibly contribute to colony collapse disorder, or CCD, according to the U.S. Department of Agriculture. First described in 2006, CCD is the official name for the disappearance of hundreds of thousands of bees from hives around the world. Scientists have not been able to find a cause.
"These mites are a big, big problem for agriculture," Huang said. "Nearly 80 percent of food crops depend on pollination."
In
The research is published in the Dec. 4 issue of The Journal of Biological Chemistry.
US
(Wire Services) – Two
The U.S. Food and Drug Administration and the Animal and Plant Health Inspection Service say the risk assessment tool called Agriculture CARVER + Shock is designed to help the food industry at the farm level implement food production security methods.
The FDA said the software was originally developed by the
"This assessment tool helps the producer understand how an attacker might think," said Dr. Stephen Sundlof, director of the FDA's Center for Food Safety and Applied Nutrition. "Producers can easily identify weak spots in their operation and receive practical advice on countermeasures they can put in place."
Cindy Smith, APHIS administrator, added: "Being
prepared is a tremendous asset. Farmers can now see firsthand what they can do
to protect themselves and
The software is available, along with more information, at http://www.fda.gov/Food/FoodDefense/CARVER.
Jeb Bush keynote speaker at 2010 United Fresh
WASHINGTON, D.C. – Jeb Bush, former
Governor Bush’s address, “Leading in a Climate of Change,” will explore how to manage through change, with an inspirational view of how to achieve success when surrounded by doubters saying it can't be done.
The former governor’s address is a key part of United Fresh 2010’s theme of ‘Winning is Everything,’ which showcases the skills, products and technologies needed to build and maintain a successful, winning produce business as the entire industry continues its economic recovery.
“Mr. Bush has had a long track record of successes in the face of various economic uncertainties,” said United Fresh President and CEO Tom Stenzel. “Attendees to this year’s show will benefit greatly from the former governor’s message of progress and prosperity as we emerge from our recent economic issues.”
A still-rising star in one of the most powerful families in
American politics, Bush was an innovative two-term leader of one of the
nation's fastest-growing and most powerful agricultural states, forging
progress in education, business development, tourism and agriculture despite
being buffeted by pressures in the economy, environmental needs and the state's
population throughout his tenure. Today, Bush heads the Foundation for
Educational Excellence, working to reinvent public education in the
New features at United Fresh 2010 include a Food Safety & Research Pavilion showcasing food safety solutions for growers and retailers and the Global Conference on Produce Sustainability, presented immediately following United Fresh 2010 by the United Fresh Research & Education Foundation through its new Center for Global Produce Sustainability.
There are multiple registration options for United Fresh 2010, however all registrations submitted before March 22 will receive a $100 discount. For more information and to register, please visit www.unitedfresh.org or call 202-303-3400.
Walkout spurs fears of climate talks failure
(AFP
via Yahoo! News)
As campaigners warned that negotiators had five days to avert climate chaos, ministers acknowledged they had to start making progress before the arrival of 120 heads of state for the summit's climax on Friday.
Sources said the developing countries walked out of working groups at the start of the second week of negotiations here, angered that the conference was weakening in support for the Kyoto Protocol, the core emissions-curbing treaty. Related article: Rudd fears climate deal failure
"They have walked out, I am advised, of the working groups," one Western minister told AFP on condition of anonymity.
"This is salvageable. It depends if people want to be constructive."
The move was unleashed by African countries, with the support of the G77 group of developing countries.
They refused to continue negotiations unless talks on a second commitment period to the Kyoto Protocol were given priority over broader discussions on a "long-term vision" for cooperative action on climate change.
The Kyoto Protocol ties the rich countries -- but not developing countries -- that have ratified it to binding emissions curbs.
It does not include the
"
The walkout delivered another blow to the summit which has
already been marred by spats between
A top Western negotiator, speaking on condition of anonymity, said a round-table session of around 50 environment ministers Sunday had been soured by "growing tensions between the Americans and Chinese," saying delegates had merely repeated their previous stances rather than giving ground.
"At the back of everyone's mind is the fear of a repeat
of the awful scenario in
In an apparent concession,
But in a pointer to the tensions backstage, Vice Foreign
Minister He Yafei said
"I know people will say if there is no deal that
"Leaders are practically on their way ... Leaders always have a very important role in this. But frankly it's also up to negotiators and ministers not to leave everything up to the leaders, but to get our act together," he said.
Australian Prime Minister Kevin Rudd, whose country is the industrialised world's biggest per-capita polluter, fretted at the possibility of failure without compromise all round.
"There's a big risk that we will have conflicting views
between developed and developing countries," Rudd said in
Campaigners were even blunter, with Greenpeace saying the
summit had five days "to avert climate chaos" and that emissions
targets so far offered by Western leaders such as
The gathering's daunting goal is to tame greenhouse gases -- the invisible by-product derived mainly from the burning of coal, oil and gas that traps the Sun's heat and warms the atmosphere.
Scientists say that without dramatic action within the next decade, Earth will be on course for warming that will inflict drought, flood, storms and rising sea levels, translating into hunger and misery for many millions.
The stakes were underlined when a new UN report said that some 58 million people have been affected by 245 natural calamities so far this year, more than 90 percent of them weather events amplified by climate change.
And a study from the International Union for the Conservation of Nature (IUCN), an intergovernmental group, said climate change threatens the survival of dozens of animal species from the emperor penguin to Australian koalas.
If all goes well, the conference will agree an outline deal of national pledges to curb carbon emissions and set up a mechanism to provide billions of dollars in help for poor countries in the firing line of climate change.
End Transmission