Gene firm tightens grip on food chain

Environmentalists are alarmed at Monsanto's growing influence, reports Louise Jury

MONSANTO, the multinational company powering the growth of genetically modified food, is edging closer to controlling the food chain.

Recent acquisitions have enabled it to gain a stake in every stage of food production from the farmer to the market place. From patented genes to a global seed distribution network, its influence is now so extensive that aid agencies have voiced concern about its role, in particular its claims to be able to solve the problems of famine and poor harvests in the Third World.

The company, now estimated to be worth $35bn (pounds 22bn) - a sixfold rise in five years - even owns the patented genes to develop new seed varieties resistant to herbicides and insects.

In the past few weeks, biotechnology companies such as Monsanto have come under fierce attack from MPs, retailers and pressure groups over their development and marketing of genetically modified (GM) crops and foods. Last week, however, the GM food companies won a boost to their credibility when a scientist who had claimed that genetically modified food could damage human health was suspended after it emerged he had confused two experiments.

But the companies themselves remain dedicated to the development of GM foods. So keen are they that to date there have been 25,000 field trials on 60 different crops, conducted in 45 different countries, in consultation with hundreds of scientists from all over the world.

Most significantly, Monsanto paid $4bn for Delta and Pine Land, the company that developed and patented "terminator technology", which genetically alters seeds so they will not germinate if replanted.

Among products and companies Monsanto owns are:

Roundup, the world's best-selling herbicide. A quarter of all soyabean farmers in the US use Roundup-ready soyabeans.

American Home Products, one of the world's largest pharmaceutical and healthcare products companies

Dekalb Genetics Corp, a corn-seed producer, which it bought in May for $1.4 bn, grabbing around 45 per cent of the US corn-seed market.

Cargill's, the giant grain trader and food processor, bought in June for $1.4 bn,

The crop-breeding unit of Unilever - once British government-owned - bought in July for pounds 320m, giving it a foothold in the huge potential market for hybrid wheat. The seed costs twice as much but the yield is higher and better quality.

Sano Shimoda, of US analysts BioScience Securities, said Monsanto had "taken the market by storm" over the past three years. It was set to become one of three or four companies, such as DuPont and the Swiss Novartis, that will dominate the field, Mr Shimoda said.

Monsanto spokesman Philip Angell claimed the company's influence was not as widespread as critics claimed. "We're probably the largest biotech company but it doesn't necessarily mean we dominate the market. This is a very young industry in a state of flux."

The sceptical British consumer is proving one of the biggest sticking points for Monsanto and its rivals, whatever their market power. As Europe prepares to introduce new labelling for foods containing GM products, Monsanto has spent pounds 1m on an advertising campaign to persuade people to trust such foods.

"There's a unique problem in the UK because the institutions that the Government has established to check safety are not trusted because of BSE," Mr Angell said. "But there is absolutely no evidence whatsoever in any study by anybody that says these foods aren't safe."

Monsanto's public-relations battle to convince doubters that genetically modified crops are harmless and could help to solve world food shortages took a further blow when a bank that pioneered small loans for the poorest peoples pulled out of a partnership deal. The Bangladesh-based Grameen Bank ended its relationship with Monsanto after widespread criticism from green groups and aid agencies.

The joint venture was announced in New York in June at a summit of the microcredit movement with a $150,000 donation to launch a new technology centre in Dhaka.

Robert Shapiro, Monsanto's chairman and chief executive, said: "The Grameen Monsanto Centre will provide the opportunity to demonstrate how sustainable technologies, combined with microcredit, can transform people's lives, allowing them to improve their quality of life and the environment."

But the arrangement was immediately condemned by Third World campaigners who feared it would be used to encourage small farmers to buy grain and herbicides they could not afford.

Professor Mohammed Yunus, the Grameen Bank's founder, said: "We were not informed of Monsanto's massive involvement in agriculture which the environmentalists at home and abroad have argued is detrimental to the interests of the poor farmer."

Mr Angell said the bank ended the deal only because of the pressure; Professor Yunus accepted the benefit of the centre and it would continue in Bangladesh without him.

Mr Angell also claimed that in the face of a rapidly growing world population and limited arable land available, biotechnology could help. Genetically improving seeds could produce higher yields without the need for lots of environmentally damaging chemicals.

However, aid agencies claim that poor distribution of food - not any absolute shortage - is the main problem with feeding people in the Third World.

The Indian Council of Agricultural Research also fears that cross-pollination could kill off the country's ancient cereal varieties, such as basmati rice.

Dr Vandana Shiva, an Indian environmentalist and feminist, said genetically engineered crops were not environmentally friendly or sustainable. "Monsanto ... is emerging as a global monopoly which threatens food security worldwide," she said.