Last year marked the first decade of the commercialisation of genetically modified crops and the planting of the billionth GM acre.

The global market for such seeds and traits – the GM portion of the technology added to seed – is growing at 10 per cent a year as farmers increasingly look to protect crops from insect damage and disease.

This market, which is primarily made up of soyabean, cotton, canola (oilseed rape) and corn seeds, will this year be worth $6.15bn, according to Cropnosis, the Edinburgh-based consultancy.

Last year, GM crops were planted on 222m acres around the world, with the US and Argentina leading the way with 123m and 42m acres respectively, according to the International Service for the Acquisition of Agri-Biotechnology Applications.

But while there has been significant growth in the market across the world, the GM seed industry remains dominated by a single name – Monsanto.

The US agribusiness has its genetically modified corn, cotton, soyabean and canola seeds planted on 217.2m acres – more than 90 per cent of global biotech acreage.

"They have completely taken over this market. They are huge," says Kin Cheung, analyst at Cropnosis. "Monsanto have the most successful products and the broadest range."

Mr Cheung points out that in spite of market dominance, Monsanto licenses many traits and has not faced competition issues.

Spun out of pharmaceuticals group Pfizer in 2002, Monsanto has changed its business mix away from herbicides and is increasingly dependent on its higher-margin GM seed business.

This year the company allocated more than $700m to biotech and seed research and pledged a tenth of its sales revenue to research and development. Monsanto has 12 science research centres and more than a dozen important alliances with biotech companies.

The seed and genomics business had sales of $4bn for 2006, or more than half of Monsanto's total revenue.

Switzerland's Syngenta, the second-largest agricultural biotech company, has its seeds planted on 7.9m acres of global biotech acreage, or under 4 per cent of the global total.

The company – which is largely restricted to the maize sector – made about $729m in revenue from GM seed sales, or 9 per cent of its total revenue.

Other agricultural biotech companies in the market include DuPont, Dow and Bayer CropScience, which was formed in 2001 by Bayer's purchase of Aventis.

Last April, Dupont and Syngenta signed a wide-ranging cross-licensing deal and a joint venture to sell their GM corn and soyabean technology to independent seed producers.

They hope the agreement will enable them to challenge Monsanto's dominance of the industry.

"Monsanto is so diversified. There is unlikely to be any serious competition to the company in the near future," Mr Cheung says.

However, one company intends to take on Monsanto's dominance of the market. Cibus, a San Diego-based biotech company, has developed a technology that can deliver the benefits of GM without inserting foreign genes into a crop.

Stephen Evans-Freke, the company's chairman, expects the technology to appeal to Europe, where the introduction of GM crops have faced strong opposition. Mr Evans-Freke even expects to win converts in Monsanto's home market, a region where farmers have welcomed the GM business.
© The Financial Times Ltd 2006. "FT" and "Financial Times" are trademarks of the Financial Times.Copyright The Financial Times Ltd. All rights reserved.

URL: http://www.msnbc.msn.com/id/15737334/
© 2006 MSNBC.com

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