"Terminator" technology opponents consider last month's announcement that the Monsanto/American Home Products "Monster" will buy Cargill's international seed business for US $1.4 billion as an ominous sign. The latest seed industry takeover is particularly alarming in South America, where the addition of the Cargill assets gives the company massive market share to deploy a technology called anti-farmer and anti-poor by farmers' groups and NGOs around the world.
The newly patented Terminator technology (US #5,723,765) sterilizes and renders useless farm-saved seed by irrevocably halting a plant's reproductive process. Providing no agronomic benefit, the Terminator's sole goal is to force farmers to return to the commercial seed market every year and thereby fatten industry profits.
The transformation of the Terminator from cause for concern to imminent threat in muscular multinational hands has been astoundingly swift. Comparatively small Delta and Pine Land Co. (US) patented the Terminator in March 1998. In May, DeltaPine was swallowed whole by Monsanto for $ 1.76 billion. Then, on June 1, Monsanto announced a mega-merger with American Home Products (AHP) for $33.5 billion.
DeltaPine and its hottest asset, the Terminator-haven't been Monsanto's only seed company targets. Since 1996, Monsanto has spent a staggering $8.1 billion buying seed companies. After the binge, the seemingly insatiable "Monster" is approaching monopoly market share in several major food crops. But anti-trust matters should be a secondary concern now. The real threat is to global food security. The June 29th announcement that it would purchase Cargill's international seed operations for $1.4 billion gives Monsanto a giant boost in its ability to insert its proprietary seed technologies into overseas markets. The company estimates that its potential to deploy genetically engineered seeds outside the USA is twice that of its domestic market.
DeltaPine's president, Murray Robinson, recently told Seed & Crops Digest that his company's seed-sterilizer could be applied to at least 400 million hectares (1 billion acres) of cropland-an area approximating the land mass of South Asia. Murray speculated that its value could run to US $3.70 per hectare ($1.50/ac) for higher-value crops.
First aimed for commercialization in maize and cotton, the Terminator's owners say it will probably work in any agricultural species and have talked about crops like wheat and rice in countries such as India, China and Pakistan. The major barrier in reaching this vast market, according to analysts, has been that neither DeltaPine-or its new boss (the "Monster")-has had a viable seed distribution and multiplication system in the Third World. The Cargill deal solves this problem.
The purchase gives Monsanto plant breeding and seed testing establishments in 24 countries and seed multiplication and distribution operations in 51 countries. Cargill's maize and oilseeds business is especially strong in Latin America and Asia where it dominates tropical maize seed sales. Through other acquisitions, Monsanto already controls about a third of the Brazilian maize seed business and half of the Argentinean market. With Cargill's 2,200 seed subsidiary employees scattered about the globe, the "Monster" is now a serious rival to Pioneer Hi-Bred International. Pioneer continues to be the world's largest seed enterprise and (until now) the unchallenged leader in maize breeding.
Mega-Mergers: Since the beginning of May, Monsanto has acquired two of the world's top ten seed companies with combined global sales of about $688 million. The "Monster's" purchase of Holden's Foundation Seeds last year, combined with this year's takeovers of Dekalb and Cargill, have taken the giant from nowhere to number two in global maize seed sales. When Monsanto's other seed company acquisitions are added up the 'Monster' may now occupy the number two position in the sale of all crop seed worldwide.
Will the Empire Strike Back? Although Monsanto's seed company takeovers are worrying enough, it was the merger with AHP in June that really shook up competitors. The $33.5 billion deal instantly created the world's largest crop chemicals company. Put this together with the "Monster's" number two post in seeds, its number seven rank in pharmaceuticals, and its fifth position in veterinary medicines, and the Life industry will never be the same. It is only a matter of time before DuPont, Novartis, or Glaxo-Wellcome strike back.
Global Control of Seeds, Ag Biotech and Agrochemicals (mid-1998 ranking)
1. DuPont $39,700
2. Hoechst AG (incl. AgrEvo) $33,000
3. Monsanto/American Home Products $23,600
4. Novartis $21,300
5. Dow Chemical $20,000
6. Rhone-Poulenc $16,500
7. Rohm & Haas $ 3,900
8. Grupo Pulsar/Empresas La Moderna $ 1,800
9. Pioneer Hi-Bred $ 1,800
Given the pace of industry consolidation in recent days and weeks, any life industry ranking is temporary and short-lived. The above chart ranks major life industry players who are active in seeds, biotech and agrochemicals.
Adapted from AgBiotech Reporter, June 1998 & RAFI Communique, Life Industry Update (December 1997).