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The industry claims that after nearly 15 years of GM-crop use, there are no well-documented food-safety problems (a couple of critical reports challenge this assertion) and no threat to biodiversity, since traditional-seed fields and biotech crops have been shown to coexist peacefully. Some problems could arise for instance, superweeds that have adapted traits from herbicide-resistant GM plants. But to date, biotech crops seem to mostly benefit the environment, if only by reducing pesticide use (a major source of water contamination) by about 10%. Newer genetic traits should allow plants to flourish with less water. In China and India, there are 13 million farmers cultivating biotech cotton, and in a few short years, India has become one of the world's largest exporters of it. Sales are also almost evenly split between North America and the rest of the world, but this is expected to tilt gradually in favor of global sales, especially as biotech traits which account for a rising two-thirds of sales value become more widely accepted. That might come sooner if recent troubles in the U.S. market from new strains of superweeds to farmer resistance to the high price of Monsanto's next-generation corn seed continue.
Monsanto has succeeded not just by combining a sufficiently large seed business with a muscular stock of biotech traits but also by licensing those traits to competitors. The result is a 35% market share in U.S. corn seed, according to Monsanto, with its traits embedded in 85% of all U.S. corn, allowing the firm to hitchhike on others' growth through royalties. "By licensing its traits, Monsanto leveraged an existing stock of elite germplasm held by other companies as well as the seed-marketing organization of those companies and thus reached many more farmers much more quickly," explains GianCarlo Moschini, an agricultural economist at Iowa State University. "It was a very successful strategy, at least for the short run."
Monsanto is trying to protect its lead with a $1 billion R&D budget in the U.S., Brazil, India and, since November, China. But Switzerland's Syngenta has a comparable budget, Pioneer Hi-Bred International is part of DuPont, and Monsanto's next-generation corn seed SmartStax includes genes from Dow AgroSciences and Germany's Bayer CropScience. These arrangements hint at the complexity of the seed industry. Competitors can become cross-licensing collaborators, even partners, as companies seek innumerable seed-and-trait permutations to help farmers boost yields.
The most significant news on this front was China's decision in November to press ahead with two nationally developed biotech crops one for corn and the other for rice. Rice is a huge market, with about 1 billion rice farmers and their families in Asia alone. But because it's farmed mostly at subsistence levels, with seeds readily retained and used in consecutive seasons without much quality degradation, it was not a market of high interest to Monsanto. Corn, the most important animal-feed crop, is a different story, especially as meat becomes more common in the Chinese diet. There are also some 7 million small farmers already growing cotton with Monsanto traits in China, where Monsanto has held a 49% stake in the leading National Seed Group Corp. since 2001.
"They want to have their piece of the game too, and we're O.K. with that," says Monsanto's Begemann. Make no mistake: cooperation today doesn't mean Monsanto is loosening its grip. "Just give us the opportunity to compete on a level field with our products, and we'll have to win it."