A small farmer ruminates on consolidation in the global seed market.
According to a recent study by ETC Group, the world’s ten largest seed vendors control about half the global seed market.
By current standards, that’s a modest concentration level. In the U.S., for example, the top four beef packers pack more than 80 percent of the nation’s beef. Microsoft famously owns more than 90 percent of the world’s computer operating system market. Consolidation of markets is as American as the SUV and the Apache helicopter.
Nevertheless, seeds lie at the heart of all organized food production, and thus at the heart of human culture for the past 10,000 years. Perhaps the seed trade deserves a closer look.
At the top of the seed pile, the above-linked ETC report shows, we find Monsanto, the former “life-sciences” giant that mutated into a gene-splicing agribusiness behemoth. It vaulted over rival Dupont as the world’s largest seed supplier in March, when it snapped up fruit-and-vegetable seed titan Seminis for $1.4 billion. Below Monsanto and Dupont we find Syngenta, the Swiss agribusiness firm. The three companies, like genetic experiments they might conjure up in one of their labs, share at least two sinister characteristics.
The first is that they are all among the world’s largest pesticide companies. I’ll address that topic another time.
The other is this: In addition to peddling physical seeds, they also peddle what’s known in the business as “traits.” This is the precise genetic coding that’s artificially inserted into a seed’s germoplasm to create a desired characteristic — say, the ability to withstand herbicides like Monsanto’s Roundup, which otherwise obliterate all plant life on contact. These companies can and do license these “traits” and sell them to other seed purveyors.
To put it in computer terms, we’re looking at a kind of software/hardware model: the seeds are the hardware and the traits are the software.
In the computer world, these functions tend to be distinct: Microsoft dominates desktop software; Dell tops the market in PCs. Even Bush’s Justice Department and SEC, both of which operate squarely under the heel of Wall Street in anti-trust matters, might squawk if those two behemoths merged. In seeds, however, the giants perform both functions without raising a regulatory eyebrow.
At first glance, comparing the the seed market to the PC market looks like a stretch. Microsoft owns nearly 100 percent of the desktop software market, while Monsanto, Dupont, and Syngenta together control only about a quarter of the seed market.
But a closer look at the fast-emerging genetically modified (GM) seed market shows that Monsanto wields Microsoft-like heft. The ETC report reveals that 88 percent of the world’s GM crop acreage is planted with seeds containing Monsanto-owned traits. More than 90 percent of the world’s genetically modified soybean crops contain Monsanto’s genetic goodies. For maize (field corn, the stuff that’s ground into industrial-food inputs like high-fructose corn syrup or fed to confined livestock, not the food you eat off the cob), that number is 97 percent.
As for cotton, Monsanto traits account for 61 percent of the GM seed market. In April of this year, Monsanto spent $300 million to snap up Emergent Genetics, the third-largest cotton seed company in both India and the U.S.
Let’s think about what that deal means. Before its sellout, Emergent, like many independent seed purveyors, could buy GM traits from the three giants: Monsanto, Dupont, and Syngenta; it could shop around for the best price. Now, it will presumably only use Monsanto traits.
By selling both physical seeds and traits — hardware and software — Monsanto puts itself in the position of cornering individual markets. That’s the sort of thing that used to set an attorney general’s teeth on edge. Our last couple of AG’s, though, have been much more interested in spying on citizens and justifying torture of suspected enemies of the state.
Now, so far, Monsanto’s dominance extends only to the largest, most lucrative, and (not coincidentally) heavily subsidized crops: corn, soybeans, cotton. Here we run against the sinister implications of Monsanto’s Seminis buy, which represents a jump into the fruit-and-veg seed market.
To date, attempts to genetically alter fruits and vegetables have failed miserably. Daniel Charles, in Lords of the Harvest: Biotech, Big Money, and the Future of Food, lays out in detail the industry’s most high-profile effort to genetically manipulate a fruit-and-veg crop, Calgene’s infamous Flavr Savr tomato. Short of stripping vowels from common English words, the effort managed to do little but burn through a mountain of Wall Street cash. Short story: Guys in white lab coats were no match for the complexities of bringing vast fields of tomatoes from seed to market. Charles calls Flavr Savr the “tomato that ate Calgene,” a once-proud biotech firm that now belongs to Monsanto.
Then there was the GM sweet potato that Monsanto magnanimously bestowed upon Kenya a few years ago. It was easy, when Monsanto was vigorously promoting the project, to paint GM opponents as racist — they were impeding Monsanto’s attempts to “feed the world” and teach Africa how to grow food. Trouble was, the Monsanto sweet potato, designed to increase yield, proved a bust in the field, as this article shows.
And Seminis itself grew out of the dashed GM hopes of a Mexican plutocrat named Alfonso Romo, whose late 1990s buying binge eventually made Seminis the world’s largest fruit-and-vegetable seed company. (Romo is part of that generation of Mexican businessmen, the leading figure of which is the telecom baron Carlos Slim, who attained lavish wealth in the 1990s aided by a great spasm of state-sponsored cronyism, applauded by the IMF, Wall Street, and Washington.) Here’s how the Wall Street Journal described Romo’s GM dreams in 1999:
[Romo] envisions creating utopian vegetables: non-browning lettuce, broccoli with enhanced cancer-fighting properties, and produce of all kinds that won’t wrinkle, spoil or blemish. Whether his own scientists or others develop the means to accomplish those goals, he believes he will benefit. “Seeds are software,” he says. “And we have the seeds.”
The above-linked article hails a joint venture between Romo’s company and Monsanto to create Roundup Ready lettuce — an effort that seems, thankfully, to have gone bust. Romo’s company claims responsibility for those ignominious and flavorless “baby carrots” one finds stuffed into bags on supermarket shelves, and it brought to market seeds for a “cucumber that yields a hamburger-size pickle slice designed to lie perfectly between a pair of buns,” the Journal reports.
That’s bad stuff; but what I really found offensive was that “Mr. Romo’s company lowered the heat factor of the jalapeno pepper, helping salsa pull even with ketchup in the U.S. in dollar sales.” The man seems intent on breeding any flavor at all out of American food.
Luckily, to my mind, the market eventually frowned on Romo’s efforts. Within two years of the Journal article, the U.S. business press had knocked Romo from his pedestal. His biotech schemes faltered on the supermarket shelf or on the petri dish, and his company became sodden with debt.
Here is Business Week in 2001:
Today, it’s a chastened Romo who surveys the wreckage of his worldwide empire. The 50-year-old, hailed as a visionary seven years ago when he first invested in agricultural biotechnology and seed companies, now is struggling to pay creditors and remain afloat. An agreement restructuring Romo’s corporate debt is expected with the banks any day. But Romo’s problem remains: He grew too big, too fast.
Eventually, Romo restructured his seed holdings and created Seminis, which, as stated above, he recently sold to Monsanto for $1.4 billion. A corporate tightrope walker, he managed to stay on as chief of the division.
The deal immediately posed moral problems for small-scale farmers, including my own farming project, Maverick Farms. Like many small sustainable-minded farms, we rely on two main seed suppliers — Johnny’s and Fedco. Both of these firms buy and resell seeds from Seminis. As this thoughtful article by Matthew Dillon of the Seed Alliance shows, Johnny’s and Fedco will likely have to continue buying certain seeds from Seminis; its market heft is so great that it essentially holds a monopoly position in certain varieties, including heirlooms like Early Girl tomatoes.
And it’s that market heft, combined with Monsanto’s R&D muscle, that conjures a dire picture: What if Monsanto plunges seriously into GM vegetables? At the time of the deal, the company claimed to have no plans to roll out GM veggies, but hinted that it might down the road. Many Wall Street analysts thought Monsanto wildly overpaid for Seminis, which had become a slow-growing business with loads of debt. The only way the deal made sense was if Monsanto really thought it could cash in on GM veggies. Will it be allowed to dominate both the vegetable seed market and trait market?
The recent ascension of pro-industry zealot John Roberts as chief justice of the Supreme Court bodes ill for the future of U.S. antitrust law.
Looks like the sustainable-farming world, already pressured by the tough economics of small-scale farming in a mega-scale world, faces yet another huge task: to scale up and formalize informal seed-saving networks.