Monsanto monopoly held up to some light

Monsanto's Roundup Ready soybean is genetically modified to survive dousing by a weedkiller made by Monsanto called Roundup

Monsanto says competition is healthy in agriculture. Above, a Monsanto researcher in Missouri last fall.
Regulators Offer Competitors, Farmers and Activists a Platform to Gripe About Crop Biotech Giant

Crop biotechnology giant Monsanto Co. has the most at stake in the first of an unprecedented series of public meetings that the antitrust wing of the Justice Department is holding across the Farm Belt.

In January, the Justice Department launched a formal antitrust investigation of the St. Louis company's handling of the most widely planted genetically modified crop in the U.S., a herbicide-immune soybean.

Now, Justice's tight-lipped antitrust division is taking the unusual step of inviting competitors, farmers, politicians and activists to air any gripes about Monsanto - and to suggest ways to limit the company's reach before a high-profile audience.

The Obama administration disclosed Wednesday that Attorney General Eric Holder will speak Friday at the first of five such meetings, billed as joint "workshops" with the Department of Agriculture on competition issues.

Friday's meeting in Iowa will focus on genetically-modified seeds, the 14-year-old market largely created and led by Monsanto, which has at least one of its patented genes in about 90% of soybeans grown in the U.S. and in about 80% of U.S. corn.

Monsanto declined to make Hugh Grant, its chairman and chief executive, available for comment, but issued a statement that "an objective review of the agricultural sector will reveal that competition is alive and flourishing." A Monsanto vice president is scheduled to speak Friday.

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Farmers and the seed companies that license genes from Monsanto have long complained about the prices it has been able to command. The price of a bag of soybean seed, for example, has roughly quadrupled since Monsanto began licensing genes.

Pioneer Hi-Bred, the seed unit of Wilmington, Del., chemicals concern DuPont Co., has alleged that Monsanto is trying to use gene licenses to limit competition. Monsanto has also tried in recent months to dispel fears among some farmers and seed breeders that Monsanto will make it hard for them to use generic versions of genetically modified crops after the company's patents expire.

Monsanto's Roundup Ready soybean is genetically modified to survive dousing by a weedkiller made by Monsanto called Roundup. Introduced in 1996, the seed made it so easy for farmers to chemically weed their fields that many stopped using other herbicides or mechanically tilling their fields. With that seed losing its ability to draw royalties after 2014, Monsanto is trying to get farmers to switch to a second generation of Roundup Ready seed that it has patented.

Rising US farm acreage using Monsanto

Mr. Holder will be joined Friday by Christine Varney, his antitrust chief, U.S. Agriculture Secretary Tom Vilsack and several states' attorneys general, some of whom have been investigating Monsanto's business practices for years.

"Seed technology is pretty heavily consolidated," said Mr. Vilsack, a former governor of Iowa, a state where Monsanto and Des Moines-based seed giant Pioneer Hi-Bred are locked in a bitter fight for farmer loyalty that includes dueling lawsuits in a federal courthouse. "I'm not taking sides," Mr. Vilsack said Wednesday. "What I'm really concerned about is farmers getting a fair shake."

The USDA estimates that U.S. farmers spent $17.2 billion on seed in 2009, up 56% from $11 billion in 2006.

President Obama promised early in his administration to "reinvigorate" antitrust enforcement, which involved the Justice Department disavowing Bush era guidelines. His antitrust chief has largely pushed on her own for a closer look at agriculture, where everything from hogs and cattle to corn, soybeans, milk and seeds are processed by a handful of big corporations.

Ms. Varney said she came up with the idea for the workshops a year ago during her nomination hearings, when Sen. Russ Feingold (D. Wis.) and other farm-state legislators complained the Bush administration permitted a merger wave among agricultural processors that undermined farmers. More than 15,000 people have submitted comments to the Justice Department on the workshops.

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Ms. Varney, who said she worked for a time during her youth organizing farm workers, said she feels a personal connection to farmers, who by nature of their business are usually dwarfed by the companies they buy from and supply. "I don't have any preconceived notions," she said, adding that the Friday workshop is arranged in a way that will allow her "to get a variety of views" on Monsanto, among other things.

Still, several of Friday's slated speakers have been critical of Monsanto, and the meeting is an opportunity for them to present to senior government officials what they see as remedies for curtailing its influence. While it is far from clear that the Obama administration will adopt any of these ideas, which mostly touch on how Monsanto licenses its genes, it's probably the best chance that many speakers will ever get to present their arguments. "This is a rare opportunity," said Diana Moss, vice president of the American Antitrust Institute, a Washington think tank.

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Neil E. Harl, a retired Iowa State University economics professor, says the meetings are "a very different tactic for the (antitrust division) to go public like this," he said. "Maybe they think just talking about these things might have an impact on the boardroom."

Minnesota Attorney General Lori Swanson, for example, filed a comment for the workshop that calls on the federal government to stop biotechnology companies from using gene licenses to block independent seed companies from stacking genes from various companies in a plant.

By Scott Kilman
Wall Street Journal
© Reuters

Thanks to SOTT for the post