[extropy-chat] Monsanto's genetically-modified revival

[Max More]

For those who didn't read the article in Business 2.0, here's my commentary:

Betting the Farm
by Eric Schonfeld
Business 2.0, 08/25/2005
http://www.manyworlds.com/exploreCO.aspx?coid=CO10170513354888

Over the last five years, Monsanto has repeatedly shown up in 
business writing as a cautionary tale-of how not to engage 
stakeholders or how not to plan for opposition. The next five years 
may see a very different treatment. After having been a strong and 
steady corporate presence in the USA since 1901, Monsanto lost $1.7 
billion in 2002 following relentless attacks from critics of 
genetically engineered crops compounded by operational mistakes. In 
2005, however, the company's seeds and genomics division is projected 
to earn $580 million on sales of $2.7 billion, which means the 
company will be making more profit from its biotech products than 
from its traditional products. In addition, the company's share price 
has doubled in the past 12 months.

According to Erick Schonfeld, Monsanto's revival is a tale of nervy 
corporate decision-making, perseverance, and dazzling scientific 
achievement. Monsanto is directing 80 percent of its research money 
into its biotech seeds, while competitors such as DuPont and Bayer 
remain heavily focused on chemicals. This high-risk strategy could 
kill the company if something goes wrong with GM crops, but the 
potential upside is enormous too. Opposition in Europe to GM 
(genetically modified) crops remains strong, but is much weaker in 
the USA. The rest of the world looks increasingly promising, as 
exemplified by Brazil, where the government finally authorized sales 
of Monsanto soybeans earlier in 2005.

Monsanto is using a new technique called molecular breeding to speed 
up the long and difficult process of genetically engineering plants 
to develop a single, specific, and inheritable trait. This approach 
can cut the necessary investment of time from ten years to three. 
Among the potential blockbusters under development are 
drought-resistant corn, nitrogen-absorbing corn, soybeans that 
produce heart-healthy omega-3 fatty acids, and frost-tolerant seeds. 
Schonfeld points out the potential for the irrigation needs in the 
dry Texas panhandle, in bringing viable corn to barren parts of the 
Third World, and in reducing the need for freshwater, 70 percent of 
which is now consumed by agriculture.

In 2003, Hugh Grant moved up from chief operating officer to CEO of 
Monsanto. He reinforced discipline in the organization and tightened 
its focus. This involved concentrating the biotech work on the United 
States and South America, and on three (rather than six) crops. He 
has also stepped up the effort to counter seed piracy. Black market 
activity can, however, actually benefit the company by familiarizing 
countries where GM crops are banned. The lack of proven ill effects 
from pirated seeds seems to have been a factor in Brazil's reversal.

The article looks at some of the parallels with the software industry 
and Microsoft in particular, since Monsanto only sells its GM seeds 
if farmers sign a contract, similar to a software end-user license, 
forbidding them to replant any of Monsanto's seeds without paying a 
new annual fee. The company may end up benefiting farmers and the 
environment by growing more crops while reducing the use of 
fertilizer, pesticides, and water, while getting rich by collecting 
royalties for every planting of its smart seeds.

Commentary with links to related material is here:
http://www.manyworlds.com/exploreCO.aspx?coid=CO10170513354888




_______________________________________________________
Max More, Ph.D.
max at maxmore.com or more at extropy.org
http://www.maxmore.com
Strategic Philosopher
Chairman, Extropy Institute. http://www.extropy.org <more at extropy.org>
________________________________________________________________
Director of Content Solutions, ManyWorlds Inc.: http://www.manyworlds.com
--- Thought leadership in the innovation economy
m.more at manyworlds.com
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