Monsanto

Last edited by Charlie Cray on August 15, 2008 - 9:34am

Company Snapshot:

Monsanto is the biggest seller of genetically modified (GM) crop seeds in the world, holding at least 70% market share for most major GE crop seeds. Since acquiring Seminis Inc. in March 2005, Monsanto has also been the largest conventional seed company in the world. Most of the GM-seeds the company sells are designed to be co-sold with RoundUp (glyphosate), the world’s biggest selling herbicide.

Ownership status:

Publicly traded

Number of employees worldwide:

17,500 (2006)

Chief executive officer:

Hugh Grant

Website:

Monsanto

Tel:

(314) 694-1000

Corporate accountability

Accountability overview:

Founded in 1901 to make artificial sweeteners, Monsanto has had a long history of controversial products, using litigation and sophisticated lobbying and public relations strategies to battle critics. Many of its products have produced harmful side-effects, including chemicals such as PCBs and dioxin (a by-product of chlorinated herbicides, including Agent Orange), rBGH (bovine growth hormone) and certain herbicides and genetically modified seeds. The company's biggest critics include farmers, scientists, and food safety advocates.

Labor:

Whistleblowers

Kirk Azevedo, a former Monsanto employee in charge of Bt cotton sales in California and Arizona, complained about the company's decision to feed experimental plants to cows, raising concerns that unknown proteins, including prions (associated with "Mad Cow" disease, might affect humans who consume the cow's milk and meat: "I spoke to many Ag commissioners. I spoke to people at the University of California. I found no one who would even get it, or even get the connection that proteins might be pathogenic, or that there might be untoward effects associated with these foreign proteins that we knew we were producing. They didn't even want to talk about it really. You'd kind of see a blank stare when speaking to them on this level. That led me to say I am not going to be part of this company anymore. I'm not going to be part of this disaster, from a moral perspective."

Environment and product safety:

PCBs: a Toxic Legacy

Polychlorinated biphenyls (PCBs) are stable oily liquids once used as insulators in electrical capacitors and transformers. Now banned, they were also used in metal finishing and hydraulic fluids and carbonless carbon paper. Monsanto began selling PCBs in 1929. PCBs have a broad range of adverse effects. They accumulate in the fatty tissues of living beings, including cancer, birth defects, immune system damage, hypertension and diminished intellectual ability. High levels of PCBs have been documented in wildlife, especially in the polar regions, where they migrate over time. Communities near the chemical factories where Monsanto manufactured PCBs have been riddled with high levels of the chemical. One study found that Anniston, AL residents (who lived near a Monsanto PCB plant) had four times the normal level of PCBs in their body, compared with the rest of the county. Monsanto stopped making PCBs at Anniston in 1971. Under the Toxic Substances Control Act (TSCA) passed five years later, PCBs were banned, but company documents archived by the Environmental Working Group demonstrate that Monsanto withheld frightening, detailed information about the contamination in Anniston decades after production stopped. Monsanto later spun off its Industrial Chemicals division, including the Anniston plant, and all attendant liabilities, to Solutia, Inc. in 1997. In 2003, the two companies agreed to shell out $600 million to settle claims filed by 20,000 Anniston area residents. (Cheryl Hogue, "Monsanto, Solutia Shell Out on PCBs," and Engineering News, August 25, 2003)

Dioxin: Science for Sale

Monsanto was (along with Dow Chemical) a leading manufacturer of Agent Orange, the herbicide used as a defoliant to combat guerrilla insurgents in Vietnam. The company has a history of politicizing debates over the toxic effects of dioxin.

A series of Monsanto studies of workers exposed to dioxin was later criticized as fraudulent by an EPA scientist/whistleblower. The Monsanto scientists who conducted the studies, which were widely used to set regulatory standards for dioxin (since exposure records for veterans were incomplete, epidemiological studies for exposed workers were considered more reliable), admitted that more than a dozen workers with cancer who were known to be exposed to dioxin had been shifted into the "control" group or removed from the study, creating a bias in the analysis. After extensive controversy, media attention, and a failed libel lawsuit against a journalist covering the story in detail, Monsanto's studies fell into disrepute. (For information about the libel suit, see Peter Montague, "Bill Gaffney's Work," Rachel's News, May 15, 1996; for details about the studies, see Peter Montague, "EPA Investigates Monsanto," July 27, 1994).

GM Crops

The long term effects of Monsanto’s GM crops on the environment are as yet unknown. In areas where RoundUp Ready crops are being grown commercially, herbicide tolerance is being spread to neighbouring crops and wild plants by cross pollination. Rather than reducing the amount of chemicals used in farming RoundUp Ready crops are locking farmers into a chemical dependant farming system. Several scientific studies have suggested that the Bt technology utilised by Monsanto in their Bollgard, YieldGard and NewLeaf insect resistant crops may kill ‘non-pest’ insects such as the Monarch butterfly.

GE Crop Successes

Monsanto and the other biotech firms have had their greatest success with GE crops including corn, soybeans, canola and cotton. Monsanto's GE soybeans were first introduced in 1996, and by 2004 accounted for 85 percent of all soybean acreage. By 2004, about 76 percent of cotton acreage and 46 percent of corn acreage in the U.S. were also genetically engineered.

One of the arguments used to support GE crops is that they reduce the need for pesticides. In fact, researchers say, quantities of glyphosate and other herbicides have risen dramatically in the U.S. (See Bill Freese, Center for Food Safety, "Comments for USDA's Advisory Committee on Biotechnology and 21st Century Agriculture (A21) Meeting," 8/1/2007)

GE Crop Failures

Although GM crops are supposed to make it easier for farmers, GM crops have actually led to a large increase in pesticide use, failed to increase yields or tackle world hunger and poverty. "Who Benefits from GM Crops?" (PDF), a report by Friends of the Earth and Center for Food Safety, concludes that GM crops: a) have increased pesticide use in the U.S.; b) have resulted in an increase in glyphosate-resistant weeks ("superweeds"); and c) failed to increase -- and often decrease yields -- crop yields.

GE Crop Failure: Wheat

In 2004 Monsanto announced that it would suspend efforts to commercially introduce its genetically engineered (GE) wheat in the United States and Canada, citing economic factors, including a lack of industry support. (Monsanto’s GE wheat stirred up opposition by major foreign wheat buyers as well as U.S. and Canadian wheat farmers, in addition to environmental activists, organic farmers, and critics of increasing corporate control over seed rights.

Problems with GE Cotton

Farmers around the world have experienced problems with Monsanto's Bt cotton. Researchers from Cornell University reported in July 2006 that Chinese GM cotton farmers are losing money due to 'secondary' pests: "After seven years, populations of other insects -- such as mirids -- have increased so much that farmers are now having to spray their crops up to 20 times a growing season to control them, according to the study of 481 Chinese farmers in five major cotton-producing provinces."

In India, Bt cotton is prohibited in Kerala and Orissa. After crop failures were reported in the Indian state of Andhra Pradesh, the Genetic Engineering Approvals Committee (GEAC) refused to renew the company's license for 3 varieties. In addition, the office of director general of investigation and registration (DGIR) submitted a preliminary investigation report to the Monopolies and Restrictive Trade Practicies Commission on March 29, 2006 charging Monsanto for setting unreasonably high rates for Bt cotton. The charges were prompted by allegations made by Andhra Pradesh Rythu Sangham, a farmers' group. (See Manoj Mittal, " ' Monopolist' Monsanto Indicted," The Times of India, 4/10/2006). (For more information see [Monsanto, Quit India!" and the Karnataka State Farmers Association.

Bovine Growth Hormone

BST or rBGH marketed by Monsanto as Posilac is a genetically engineered hormone designed to make cows produce more milk. Large amounts of research indicate that BST use has serious implications for the health and welfare of dairy cattle, including making cows more prone to mastitis and sores.

Because of evidence of potential health consequences for both cows and humans, farmers in Europe, Australia, Canada, and New Zealand do not inject their cows with bovine growth hormone. Although BGH is approved by the FDA, escalating consumer concern in the US has caused Wal-Mart, Starbucks, Kroger, and more than 40 of the top 100 dairies to stop using it. Groups including nurses are calling for the elimination of rBGH in the U.S.

In 2008, author Jeffrey Smith released "Your Milk on Drugs -- Just Say No", a film that explores the adverse effects of rBGH, as well as conflicts of interest surrounding its approval by the FDA. See the Institute for Responsible Technology web site for details and specific citations.

In 2008, scientists published a study claiming that BGH could reduce the amount of global warming gases issued by cows, but as an article in Scientific American (see "Can Bovine Growth Hormone Slow Global Warming," SciAm July 2, 2008) points out, "[t]he study was conducted with a scientist, Roger Cady, who is also the rbST technical project manager for Monsanto ... [and] the lead scientist, nutritional biochemist Dale Bauman of Cornell University, has been a paid consultant for Monsanto since the 1980s."

Science for Sale

According to the Center for Science in the Public Interest, at least 73 academic scientists have received money from Monsanto.

Human rights:

Having encountered increasing opposition to GM technology in the developed global north, Monsanto have put more energy into pushing their products in the developing global south. An example of this being the attempt by Monsanto/Mahyco to rush their Bt insect resistant cotton through the Indian government’s regulatory process and on to the market. The decision on allowing commercial growing of Bt cotton was postponed for a year in the face massive opposition from Indian farmers and NGOs all over the world.

Monsanto holds a patent for 'terminator' technology. Terminator technology involves the genetically engineering of plants to produce sterile seeds thus forcing farmers to buy new seed every year, rather than saving their own seed from year to year. Monsanto has said it will not use this technology but still holds the patents and may use it in future.

Accused of Using Child Labor in India

According to a study conducted by the India Committee of the Netherlands, a company subsidiary employed children to make cotton seeds, thereby exposing them to Endosulfan and other pesticides, while paying less than Rs.20 (50 U.S. cents) per day.

Anti-competitive and consumer protection:

Monsanto doesn't like the thought of anyone publicly disagreeing with them or worse still pulling a fast one on them. Where their GM crops are being grown commercially Monsanto have paid a small army of private investigators to check whether farmers are growing their GM crops without permission. Monsanto have successfully sued a Canadian farmer Percy Schmeiser for supposedly planting GM oil seed rape without a license agreement. Percy claims that he has never planted GM crops on his land and that any GM crops on his land are a result of cross pollination from GM crops grown on neighbouring farms. He is launching a counter suit against Monsanto.

In 1997 2 TV journalists Steve Wilson and Jane Akre who had been making a documentary on the dangers of Monsanto’s BST were fired by their employers Fox TV. Fox TV had come under pressure from Monsanto to change the content of the documentary.

In 2007, Monsanto acquired Delta Pine and Land. Concerns about the merger were described in reports by the Center for Food Safety and the American Antitrust Institute.

According to the ETC Group, Monsanto -- the world's largest seed company -- accounts for 23% of the global proprietary seed market (i.e. brand name, commercial seed subject to intellectual property).

Patents

Monsanto has filed numerous patent infringement lawsuits in the U.S. and Canada against farmers who harvested crops containing Monsanto's patented genes without paying for the seed, which were often sown by winds carrying the seeds from nearby fields. One of the most significant cases was decided in Monsanto's favor against canola farmer Percy Schmeiser, by the Canadian Supreme Court (5-4 vote, May 2004).

In 2007, the European Patent Office revoked Monsanto's claim to a species-wide patent on all genetically modified soybeans (EP0301749) – a patent unprecedented in its broad scope. The Canadian-based ETC Group won the 13-year legal challenge against Monsanto’s species-wide soybean patent when an EPO appeal board ruled that the patent was not new. The patent challenge was supported by Greenpeace and “No Patents on Life!”, along with Dr. Ricarda Steinbrecher of UK-based EcoNexus. Monsanto itself originally opposed the patent until it acquired the original patent assignee (Agracetus) in 1996. The technology related to the now-revoked patent has been used, along with other patents in the company’s portfolio, to corner 90% of the world’s GM soybean market. According to Hope Shand of the ETC group, "Monsanto’s own blistering 1994 arguments against the patent were ultimately key in defeating it.” One of Monsanto’s top scientists testified in 1994 that the genetic engineering process described in the patent was insufficient to allow a skilled scientist to replicate the procedure – a necessary criterion for patentability.

The Public Patent Foundation filed a petition with the U.S. Patent Office in 2006 to revoke four Monsanto patents used in lawsuits against farmers. The USPTO responded by rejecting Monsanto's claims in four separate rulings dating from February through July 2007. (Monsanto has since filed for a reexamination of its claims.)

Corporate Pigs

Monsanto also claims to hold a patent on breeding techniques for pigs, which would grant them ownership of any pigs born of such techniques and their related herds. Greenpeace criticizes Monsanto for trying to claim ownership on ordinary breeding techniques.

Political influence:

There is a well documented ‘revolving door’ between Monsanto employees and officials from US Government regulatory bodies (particularly the Food and Drug Administration - FDA). This has effectively enabled Monsanto to bypass the regulatory process and get marketing consent in the US for their GM and other products with minimal safety checks. US influence has made it much harder for other counties to implement more rigorous regulatory standards. Monsanto have also had direct influence within the Clinton administration and continue to have with the Bush administration. Monsanto employee Linda Fisher was nominated by Bush in May 2001 for a key position in the US Environmental Protection Agency. Monsanto have used their close links with the US government to influence policy decisions in the UK, Europe and the EU.

The revolving door between Monsanto and the UK government is less easy to demonstrate, however, there are several links between prominent advisors to the Labour government, Bell Pottinger Good Relations (a PR company employed by Monsanto) and Monsanto.

In 2005, the U.S. Department of Justice charged Monsanto with bribery under the Foreign Corrupt Practices Act, in connection with an illegal payment of $50,000 made to a senior Indonesian Ministry of Environment official, as well as the false certification of the bribe as “consultant fees” in the company’s books and records. The DoJ deferred prosecution of the company in exchange for a $1 million payment and an agreement to comply with the ongoing investigation, as well as the retention of an independent compliance expert. According to a report by the Wall St. Journal, "although prosecutors [didn't] allege that Monsanto's top executives knew about the bribes, they [did] contend the corruption continued unabated because of the company's lax oversight." ("Seed Money," by Peter Fritsch and Timothy Mapes, WSJ 4/5/05, A1).

Monsanto has pushed for state-level laws that discriminate against seed-saving by farmers, and to prevent the labeling of milk produced with the use of BGH.

Media Manipulation

Monsanto has also pressured the media to squash investigative reports exposing public health risks from its products. A famous example is the case of Steve Wilson and Jane Akre, a husband-and-wife investigative reporting team at WTVT, Fox's Tampa Bay affiliate. Akre and Wilson discovered that the use of rBGH to increase milk production can cause udder infections in cows, requiring increased use of antibiotics. They also discovered that monitoring for antibiotic residues in milk was inadequate, and that some scientists believe that rBGH-boosted milk contains heightened levels of IGF-1, a hormone associated with increased risk of cancer (Science, 1/23/98).

According to FAIR, in February 1997, just days before the first installment of the rBGH story was scheduled to air, Monsanto sent a letter to Roger Ailes, the head of Fox News, questioning Akre and Wilson's "objectivity and capacity for reporting on this highly complex scientific subject," and charged that the reporters "have prejudged the safety of [rBGH] and the corporate behavior of Monsanto." The letter urged Ailes to involve himself directly in an effort to "get the facts straight" about rBGH, hinting none-too-subtly that the alternative would be a massive lawsuit: "There is a lot at stake in what is going on in Florida, not only for Monsanto, but also for Fox News and its owner." The result was an endless round of story revisions, cuts and conferences with lawyers. (The pressure further intensified after Monsanto sent Ailes a second letter warning of "dire consequences for Fox News.")

Eventually, Akre and Wilson filed suit against Fox, charging breach of contract and violation of Florida's whistleblower protection act. Wilson and Akron won the initial decision and were awarded $425,000 by the jury. Fox appealed the decision to an appellate court, however, and won. The court declared that the FCC policy against falsification that Fox violated was just a policy and not a "law, rule, or regulation", and so the whistle blower law did not apply. In 2004, Fox filed a US$1.7 million counter-suit against Akre and Wilson for trial fees and costs.

Attacking Local GE Crop Bans

For years Monsanto has attempted to quash local resistance to GMOs by pushing for state laws that preempt local and county ordinances. The company has pushed such bills in at least nine states -- California, Pennsylvania, Georgia, North Dakota, Iowa, Idaho, Indiana, North Carolina, Oklahoma, Arizona, and West Virginia. These bills (most of which also target local restrictions on factory farms and other unwanted land uses) were introduced with the help of The American Legislative Exchange Council, a rightwing corporate-funded state legislative action group, which helped Monsanto propagate the laws.

Monsanto has also pushed for state-level laws that bar labeling. (See Lisa Stein, "Milk and Honey, er, Hormones," January 18, 2008, Scientific American)

Industrial Biotest Scandal

Paul Wright, a research chemist for Monsanto, quit Monsanto in 1971 to work for Industrial Biotest (IBT), a laboratory which at the time was conducting 35% to 40% of all animal tests in the U.S. (most of them used to certify the safety of regulated products). Wright conducted a series of apparently fraudulent studies of the toxicity of Monsanto products before returning to work at Monsanto as manager of toxicology. Wright used these same studies in reports to the EPA. Wright was caught by a FDA scientist. Federal investigators found evidence that Monsanto executives knew that the studies were faked but sent them to the FDA [U.S. Food and Drug Administration] and the EPA anyway." The Monsanto executives were never prosecuted and a company spokesperson later claimed that this was evidence of Monsanto's innocence.(See Dan Fagin, Marianne Lavelle, and the Center for Public Integrity, TOXIC DECEPTION, 1996).

Location(s)

St. Louis, MO

United States

See map: Google Maps

History

For critical histories of Monsanto see CropChoice.com, the Center for Food Safety, the Organic Consumers Association,

Monsanto has been by far the most prominent and controversial corporation promoting the introduction of biotechnology in agriculture. The company has a long and messy history of manufacturing hazardous chemicals. Their products have included chemical warfare agents (Agent Orange), industrial materials (PCBs), food additives (NutraSweet), agrochemicals and pharmaceuticals.

St. Louis purchase agent John F. Queeny founded Monsanto in 1901 to produce artificial sweeteners. (Monsanto was his wife's maiden name.) Sales passed the $1 million mark in 1915. The company began making aspirin in 1917 when the German patent expired. By the end of WWI the company was rapidly turning into a diversified chemicals manufacturer, and WWII made Monsanto an integral part of the rapidly-emerging military-industrial complex, producing large amounts of plastics and synthetic fibers. (In its 1942 annual report to shareholders, the company lamented that "It is with regret that we abandon our past practice of transmitting to our shareholders an informative and interpretive annual report ... the necessity of secrecy imposed by our national interest surrounds much of the activities upon which the company has been engaged.")

Styrene -- a critical ingredient in synthetic rubber production -- was a leading product.

In the 1940s, Monsanto began to operate the Mound Laboratory in Miamisburg, Ohio, for the Manhattan Project, the development of the first nuclear weapons and, after 1947, the Atomic Energy Commission.

On April 16, 1947 -- the company's Texas City styrene plant burned to the ground in the aftermath of a tremendous explosion of ammonium nitrate aboard a French freighter tied up near the plant. (145 Monsanto employees were among the 512 victims).

Sales topped $1 billion for the first time in 1962, shortly after Edgar "Stoneface" Monsanto Queeny (the son of John F. Queeny) stepped down as CEO.

For decades the company continued to operate as one of the largest chemical companies in the U.S. ("Without chemicals," a Monsanto ad suggested, "life itself would be impossible." The company initiated the chemical industry's trend to aggressively advertise in 1977 $4.5 million. See Business Week, 10/8/1979)

Monsanto joined with Bayer, the German chemical giant to form Mobay Chemicals in 1954, to market polyurethanes in the US.

Monsanto was a leading producer of Agent Orange -- the dioxin-contaminated herbicide used by the US Military in Vietnam as a defoliant.

By the 1970s, the company's produced a long line of "building block" chemicals, plastics, and synthetic fibers. Products made by Monsanto included Lasso (once the largest -selling herbicide in the U.S.), Astro-Turf, aspirin (selling it in bulk to brand-name manufacturers), soap and detergent manufacturing feedstocks, and plastics used to make auto and appliance parts.

During the 1990s Monsanto began to shed many of its core chemical production lines, in order to become the pioneer in industrial ‘life sciences.' The company invested heavily in biotechnology research and spent nearly $10 billion worldwide acquiring seed companies. In the late 1990s, Monsanto became the first company to widely market first generation GM crops, deploying an aggressive public relations campaign aimed at persuading a concerned public that GM crops were a safe and desirable innovation. The campaign backfired, resulting in Monsanto becoming the primary focus of a rapidly growing global resistance to GM crops. By late 1998 a combination of Monsanto’s status as an international bogeyman, and a need for returns on their extensive investments resulted in a loss in market confidence in the company and its share price plummeted.

Stability was partially regained through a merger with pharmaceutical giant Pharmacia/UpJohn in April 2000. As a result of the merger, the combined company -- known as Pharmacia -- took over Monsanto’s pharmaceutical wing Searle. The agrochemical and biotechnology division (still known as Monsanto) was spun off as a nominally separate company with Pharmacia retaining an 85% share.

In 2003 Monsanto CEO Hugh Grant refocused the company to reduce reliance upon the company’s agricultural chemicals business (including RoundUp, which had recently went off-patent), placing greater emphasis on its seeds and traits business.

Financial information

Stock ticker symbol:

MON

Total revenue:

$8.6 billion

Fiscal year:

2007

Net Income:

$993 million

Fiscal year:

2007

Major lines of business/segments:

Net sales for major business segments (see 2007 10-K, page 143): Corn seed and traits: $2.8 billion Soy seed and traits: $ 901 million Vegetable and fruit seed: $ 612 million Cotton seed and traits: $ $319 million Other seeds and traits: $ 325 million Total Seeds/Traits: $5 billion RoundUp/glyphosate herbicides: $2.6 billion All other agriculture products: $ 1.0 billion Total herbicides and related products: $3.6 billion

Link to annual report:

Annual Reports

Additional descriptive data

Link to full list of subsidiaries:

10-K Exhibit 21

Link to complete list of brands:

Major Monsanto brands include Asgrow (soy), Bollgard (cotton), Dekalb (corn), DeltaPine, RoundUp (herbicide) and RoundUpReady (seeds), Seminis (fruits and vegetables), Vistive (soy), and Yieldgard (corn).

Geographic breakdown of revenues (sales and profits), assets, employees:

Net Sales (See 2007 10-K, page 145): United States: $4.9 billion Latin America: $1.6 billion Europe/Africa: $1.3 billion Asia-Pacific: $552 million Canada: $324 million

Specialized Information

Major brands:

The company lists its major brands on its web site, including Asgrow (soybean seeds). Bollgard (cotton), Dekalb (corn), Deltapine (cotton), Roundup (herbicide), Seminis (vegetable and fruit seeds), Vistive (soybeans), and American Seeds Inc. (ASI),

List of countries in which it operates:

Argentina

Australia

Austria

Bangladesh

Belgium

Brazil

Bulgaria

Canada

Chile

China

Colombia

Croatia (Hrvatska)

Czech Republic

Denmark

Ecuador

France

Germany (Deutschland)

Greece

Guatemala

Honduras

Hungary

India

Indonesia

Ireland

Italy

Japan

Jordan

Kenya

Mexico

Netherlands

New Zealand

Nicaragua

Pakistan

Paraguay

Peru

Philippines

Poland

Portugal

Romania

Russia

Senegal

Singapore

Slovakia

South Africa

South Korea

Spain (Espana)

Sri Lanka

Sweden

Switzerland (Confoederatio Helvetica)

Taiwan

Thailand

Turkey

Uganda

Ukraine

United Kingdom

United States

Uruguay

Venezuela

Vietnam

Zimbabwe

Links to federal contract rankings in U.S.:

USASpending.gov (unranked - $13 million in FY 2007)

Shareholder resolutions:

Disclose Risks of Genetic Engineering (As You Sow, 2005)

Disclose soft money and trade association spending (As You Sow, 2006)

Bribery Resolution (Harrington Investments, 2005)

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