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Questions Raised About Monsanto Penalties

Four Ontario farmers found guilty of stealing Monsanto’s Roundup Ready soybean technology are unlikely to find sympathy from fellow farmers who abided by their contracts.

But Monsanto’s decision to deny those farmers access to its seed technology for life is raising questions among industry observers concerned about concentration in the marketplace.

In 2007, 65 per cent of Ontario’s soybean acres were Roundup Ready. In the West more than half the canola grown is Roundup Ready.

The lifetime ban, which reduces their cropping options, is in addition to thousands of dollars ($66 to $102 an acre) the farmers will pay Monsanto in penalties, plus court costs.

NO FREE RIDERS

For some, the penalty is fair game.

“I’m a guy that likes the (Monsanto) technology and pays for it,” said Rolf Penner, Manitoba vice-president of the Western Canadian Wheat Growers Association. “I don’t like free riders going in and taking advantage of this stuff. Under these circumstances I think it’s justified to have a lifetime ban.”

Penner believes there is ample competition between seed companies. “I don’t see this particular case as evidence or further evidence of corporate concentration,” he said.

The American Antitrust Institute, an independent U. S.-based think-tank says in a recent document there is not enough competition in the

“The choices for farmers will become less and less.”

– TERRY BOEHM

genetically modified (GM) seed business. “Monsanto possesses the market power to frustrate competition in soybeans, cotton, and corn, potentially slowing innovation and adversely affecting prices, quality, and choices for farmers and ultimate consumers of vitally important commodities.”

HEAVY HANDED

Greg Marshall, president of the Agricultural Producers Association of Saskatchewan described Monsanto’s ban as “heavy handed.”

“They (Monsanto) want to dictate the market and what we grow and how we grow it,” he said.

If one company can ban seed sales to a farmer there’s nothing stopping others, said National Farmers Union president Stewart Wells, noting the implications reach far beyond the farm gate.

Farmers will be afraid to stand up to seed companies for fear of being banned, Wells said.

Only farmers convicted of stealing Monsanto’s technology will be banned Monsanto Canada spokesperson Trish Jordan stressed in an interview. “People don’t settle out of court if they haven’t done anything wrong,” she said.

The ban on the four Ontario farmers marks the first time Monsanto has implemented its “Violator Exclusion Policy,” Monsanto said in an Oct. 19 stakeholder update.

“Under this policy, violators who do not reach a settlement with Monsanto and whose violation results in Monsanto having to go to court, lose all access to current and future Monsanto technologies.”

ALTERNATIVE OPTIONS

The ban includes Monsanto traits in seed distributed by companies other than Monsanto.

Those four farmers still have cropping options, among them soybean varieties developed by the University of Guelph, said Rene Van Acker, the university’s associate dean of external relations for Ontario Agricultural College.

However, Van Acker said farmers need to think about maintaining a diverse supply of seed and crop development programs. “One for healthy competition and two for a healthy breeding community so there are multiple ideas, multiple approaches,” he said. “I think scientifically that’s healthy.”

Van Acker said he wonders if major seed companies “stacking” traits into crops are undermining competition.

“How much of the market do those companies represent in combination when they are all selling the same seeds together?” he said. “Is that OK? At what point does somebody ask if that’s collusion? And with seed it’s as important as anything else such as software or oil. Seed is in that family of fundamental products for consumers where there needs to be protection of competition and choice.”

Pat Mooney, execut ive director of the ETC Group, which lobbies against seed company concentration, says

the industry is already too concentrated.

“It’s dangerous for the food supply of the country and the world to be so dependent upon so few companies,” he said, especially with climate change occurring.

INDUSTRY CONCENTRATION

According to Mooney in 2007 three firms– Monsanto, DuPont and Syngenta – controlled about half the world’s seed supply. Monsanto accounted for half of that.

Mooney noted Monsanto not only has patented traits, but patented techniques for developing GM crops that prevent other companies from competing with them.

NFU vice-president Terry Boehm said patents aren’t the only problem. Increasingly seed companies are deregistering non-GM open-pollinated canola varieties that farmers can save and grow without having to pay a technical use agreement, he said. Deregistered crops automatically receive the lowest grade making them unprofitable to grow.

“The choices for farmers will become less and less,” he said.

“It has greatly restricted, if not eliminated, the possibility to go back to conventional Argentine canola varieties. They are virtually impossible to find.”

COMPETITION

There’s still lots of competition in the seed business, said Richard Phillips, executive director of the Grain Growers of Canada (GGC). He predicts smaller companies will develop niche crops for specialty markets.

There’s also a role for publicly funded research. The GGC wants the federal government to double its agricultural research budget, Phillips said.

Monsanto wants to discourage farmers from stealing plant genetics, but Phillips said the company should give farmers a second chance if they acknowledge their mistake.

There’s lots of competition in the seed business, according to Jordan. Monsanto has the greatest market share because farmers see Monsanto’s products as providing the most benefit relative to other options, she said.

“It’s our technology,” Jordan said. “We can choose who we wish to sell to and who we don’t. It’s not an automatic that you have access to our technology.” [email protected]

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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