Despite Global Opposition Monsanto Moves Ahead

Villain or hero, Monsanto moving GM food forward
----------------------------------------------------
http://www.planetark.org/dailynewsstory.cfm?newsid=10281

USA: March 28, 2001
Reuters

CHESTERFIELD - The six-story brick buildings housing Monsanto Co.'s chief
scientific research facilities look like a typical office park.

Until you glance up.

Two acres of greenhouses packed with leafy green plants perch atop the
complex, testament to Monsanto's hope that as high-tech crops stretch for
the sun, profits will likewise grow.

Long a leader in the revolutionary changes taking place in agriculture, St.
Louis, Mo.-based Monsanto has become a hero to farmers by providing products
that improve production of key crops such as corn, soybeans and cotton.

But the company's efforts to give Mother Nature a hand have made it a
villain to those who see biotechnology as a threat to the safety of food and
the environment. Lawsuits and protests have dogged Monsanto's genetic seed
work, and mounting financial pressures led the company last year to form
Pharmacia Corp. in a merger with Pharmacia & Upjohn.

Now, newly restructured and reinvigorated with an October public offering as
a Pharmacia agricultural products spin-off, Monsanto is seeking a fresh
start, but facing a murky future.

"Its been a very innovative company coming up with new products and new ways
of doing business in ways other folks probably had never even imagined were
possible," said Food and Agricultural Policy Research Institute economist
Pat Westhoff. "But they definitely face a number of hurdles."

SEEDS OF PROMISE

The company's claim to fame is Roundup, the world's No. 1 herbicide, whose
ability to annihilate weeds is beloved by backyard gardeners as much as it
is depended on by farmers.

Last year, net sales of Roundup and related herbicides were $2.6 billion, 48
percent of total company net sales.

But the U.S. patent on the key ingredient in Roundup expired in September,
opening Monsanto's bread-and-butter product line up to increased competition
and price pressure.

To hold onto market share, the company is reducing prices on its Roundup
products and introducing new variations. But it also is putting an
increasing reliance on expanding markets for its "Roundup Ready" crops,
which are genetically transformed to resist the weedkiller, allowing farmers
to kill weeds easily without damaging crops.

Genetically modified (GM) corn and soybeans have soared in popularity in the
U.S. farm belt since debuting in the mid-1990s, and helped increase
Monsanto's sales of Roundup herbicide products. Last year, planting of
Monsanto biotech seeds grew by more than 15 percent to 103 million acres.

Monsanto is now seeking regulatory approval to introduce a Roundup Ready
wheat seed to the market. Also in the pipeline are Roundup Ready rice and
alfalfa seeds. More distant plans include GM plants that produce vaccines.

"We're beginning to look at plants as factories... where you can deliver
things to improve people's health," said Monsanto director of scientific
outreach Eric Sachs.

FIGHTING "FRANKEN-FOODS"

But as Monsanto presses ahead, global debate about the safety of genetically
modified crops shows no signs of easing. Opposition to Monsanto has been
particularly virulent in Europe where GM crops have been snagged in the
regulatory approval process for years and labeled "Franken-foods" by
opponents.

Last weekend, Italian police seized about 120 tonnes of maize suspected of
being contaminated with unapproved genetically engineered material from
Monsanto.

And in January, more than a thousand protesters stormed a Monsanto
experimental farm in Brazil, yanking out GM corn and soybeans crops at
Monsanto's experimental farm.

Though less vocal, U.S.-based GM opponents are also active. Last week,
protesters picketed Starbuck Corp.'s annual meeting, demanding the company
halt use of genetically modified soy and corn products and milk produced
with bovine-growth hormones.

Last year, protesters convinced McDonald's Corp. and other fast-food chains
to stop using Monsanto's genetically modified potato, a product the company
has since shelved.

And while U.S. wheat growers say they would welcome the production
efficiencies they might gain from Monsanto's new GM wheat variety, they fear
the loss of world wheat sales.

"The name Monsanto has been made synonymous with everything bad and ugly
about biotechnology," said Worldwatch Institute researcher Brian Halweil.

A FRESH FACE

Monsanto is determined to ride out the GM backlash and has adopted a new
low-key approach heavy on education and outreach, and light on the
aggressive promotional moves of years past.

It also has slashed costs, cut back on GM research and narrowed its focus in
a restructuring that last year resulted in a pre-tax charge of $261 million.
The company cut 460 employees from its workforce in 2000 and is cutting at
least 235 employees this year.

Monsanto officials said earlier this month that the company expects sales
growth in 2001 of about 5 percent, the same as 2000, based on expected
increased sales of seeds and Roundup herbicide, as well as higher revenues
from biotechnology traits. But the company's future growth potential remains
an open question, many say.

Lehman Brothers analyst Sergey Vasnetsov has a hold rating on the stock, and
said the "dark clouds of negative public perception" loom large. He and
other Monsanto watchers all say only time will tell how Monsanto's fortunes
will fare.

Monsanto officials have acknowledged missteps in the past and are respectful
of the tenuous ground they now walk on.

"There are several things we need to do to continue to be a successful
company," said spokeswoman Lori Fisher. One of those is "carrying out the
biotechnology acceptance strategy. Longer term that would be key to our
company's future."

Story by Carey Gillam