Rival DuPont Goes After Monsanto
Most of the nation’s two primary crops, soybeans and corn, grow from seeds that have been genetically modified according to Monsanto company patents.
For farmers, prices of the Monsanto-patented seeds have steadily increased, roughly doubling during the past decade, to about $50 for a 50-pound bag of soybean seed, according to seed dealers and farmers have decried the price increases. Competitors say the company has ruthlessly stifled competition.
Now Monsanto has drawn scrutiny from U.S. antitrust investigators, who under the Obama administration have looked more skeptically at the actions of dominant firms. During the Bush administration, the Justice Department did not file a single case under antimonopoly laws regulating a dominant firm. In 2009, the Obama Justice Department tossed out the antitrust guidelines of its predecessor. “We must change course,” Christine Varney, the Obama administration’s chief antitrust enforcer, said at the time.
Of all the new scrutiny by Justice, the Monsanto investigation might have the highest stakes, dealing as it does with the food supply and one of the nation’s largest agricultural firms. It could also force the Obama administration, already under fire for the government’s expanded role in the economy, to explain how it distinguishes between normal rough-and-tumble competition and abusive monopolistic business practices.
Monsanto says it’s done nothing wrong and that “Farmers choose these products because of the value they deliver”
Before it jumped into biotechnology, Monsanto was already one of the nation’s largest chemical companies and had patented the weed-killer glyphosate, bringing it to market as Roundup in the ’70s.
The product kills just about all weeds, and for farmers it served as a wonderfully effective herbicide. Instead of tilling the earth, they could simply blanket it with Roundup. Because the chemicals in Roundup break down quickly in the sun and rain, seeds could be planted shortly afterward.
It became one of the best-selling herbicides ever, and the seed patents at the center of the antitrust allegations were built upon that chemical’s appeal. If there was a practical drawback with Roundup, it was that it couldn’t be used after planting: Applying Roundup at that point would kill the crops, too.
Although farmers have grumbled about Monsanto’s regular price increases for Roundup Ready technology for seeds, it is DuPont, a Monsanto rival, that has pressed the antitrust case. DuPont argues that Monsanto has used the dominance of the Roundup Ready brand to prevent competitors from bringing innovations to market.
In its view, Roundup Ready is so popular that any new biotech innovations must be designed to work with Monsanto’s technology. But Monsanto effectively freezes out the competition, it says, by making it difficult for other companies to win a license to add their traits to Monsanto-patented seeds.
A recent paper by Diana Moss of the American Antitrust Institute broadened the antitrust case against Monsanto and called for legal enforcement, citing “an almost intractable situation for competition.” The institute has taken donations from DuPont but does not cater to its donors’ viewpoints, officials said.
Monsanto says that the allegations of stifling competition are “without merit” and that it broadly licenses its technology; the price of seed from 2000 to 2008 outpaced the growth of crop yields by 2 to 4 percent a year.
Small farmers worldwide are rising up against Monsanto and GMOs, and Germany will ban the cultivation of GMO maize. The European Union is not too keen on having genetically modified products forced down their throats either. (partial extract from Health Freedom Alliance)