Advice to Bush: Break up Monsanto

The president is planning to pump up ethanol, again, in his State of the Union speech. But where will all the corn come from?

Topics: Globalization, How the World Works, Monsanto, Biotechnology, State of the Union,

Alexei Barrionuevo’s roundup of all things ethanol in today’s New York Times, setting the stage for an expected announcement tonight by President Bush calling for significantly increased ethanol consumption in the United States, is a generally good introduction to the topic. But one fragment caught my eye:

Responding to concerns that there just isn’t enough corn to supply expected future demand, Agriculture Secretary Mike Johans was described as “confident that more corn will emerge to ease the pain of higher grain prices, as seed companies improve yields.”

Seed companies? Now, who might that be? As of 2005, worldwide, 10 companies controlled about 50 percent of the global seed business. At the top of the heap are just three companies, Monsanto, Dupont and Syngenta. Industry concentration is continuing to proceed apace. Monsanto is currently waiting for antitrust approval to complete its merger with the 11th largest seed company, Delta Pine & Land. All three companies have been snapping up smaller firms at every opportunity.

All three are also huge chemical and pesticide conglomerates that are aggressively pursuing advanced genetic modification technologies. So when Secretary Johans talks about seed companies improving yields, what he’s really saying is that a tiny group of huge multinational chemical companies will be introducing a steady stream of new transgenic corn strains, in a frantic attempt to keep innovating humanity’s way out of an energy crisis.

Let’s take a break today from worrying about whether scientists are properly evaluating the potential risks to human health and the environment from transgenic research. I’ve only just started reading Denise Caruso’s “Intervention: Confronting the Real Risks of Genetic Engineering and Life on a Biotech Planet,” a clear contender for best book yet on that topic, and so we’ll save a more detailed discussion of the problem for later.

Here’s a different angle: A few years back, the USDA publicized research that found that seed industry consolidation had led to a decrease in research and development intensity. In a classic display of what happens when a market is locked up by a small number of players, competition suffers and the pressure to innovate slackens: “… increased competition in R&D,” concluded the researchers, “as indicated by low levels of market concentration and the participation of more competing firms in the GM crop approval process, is positively related to R&D intensity. As the number of firms declined through mergers and acquisitions, the intensity of R&D fell.”

If President Bush and Mike Johans want to put some muscle behind their faith that new breeds of corn will deliver ever-higher yields, maybe they ought to do something about the continuing consolidation of control over the seed industry. Stop Monsanto’s merger with Delta Pine & Land, which will give the St. Louis giant effective control over cotton seed. Even better, break it up. Let a hundred seed companies bloom, instead of just a few.

Just trying to be helpful here. President Bush has some really low poll approval ratings going into tonight’s State of the Union speech. It’s time for bold moves!

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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