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New report - Deal May Hurt Organic Cotton (23/2/2007)

For the report - Cotton Concentration Report An Assessment of Monsanto's Proposed Acquisition of Delta and Pine Land http://www.centerforfoodsafety.org/pubs/CFS-CTA%20Monsanto-DPL%20Merger%20Report%20-%20Final.pdf

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Deal May Hurt Organic Cotton
By Kristen Philipkoski
Wired News, February 23 2007
http://www.wired.com/news/technology/0,72783-0.html?tw=wn_technology_3

Organic cotton growers could face increased risk of crop contamination if a merger between the world's largest seed company and the nation's largest cottonseed seller is allowed to proceed, an influential agriculture watchdog group warned Thursday.

Biotech giant Monsanto agreed to purchase Delta and Pine Land Company (DPL) last August for $1.5 billion in cash. Now, as the Department of Justice considers the merger, the Center for Food Safety has released a 57-page report (.pdf) protesting the deal.

"Monsanto is the largest seed company in the world.... In the '90s (the company) began acquiring seed firms in the U.S. and abroad and it has a very dominant position in seeds in soybeans and corn," said Bill Freese, the Center for Food Safety's science policy analyst and author of the report. "That kind of concentration is always a concern."

Thurdsay's report is the latest salvo in a decade-long battle to prevent the tie-up, which would put nearly two-thirds of the U.S. cottonseed supply in the hands of one company. Since the late 1990s, critics have had little effect in blocking Monsanto's steady expansion, and the DPL deal stands as a rare exception. Monsanto voluntarily backed out of a 1998 deal, fearing regulatory backlash.

The renewal of the deal signals Monsanto's confidence that regulators will sign off -- something the CSF hopes to head off with its report.

Among other things, the group argues that the merger could dampen the recent trend toward organic cotton.

Companies including Wal-Mart (the largest purchaser of organic cotton in the country) and Nike have ramped up their marketing and sales of organic cotton products in recent years.

But organic cotton could become more difficult to come by post-merger. With more genetically engineered varieties in fields, the risk of contamination to organic and conventional crops will likely increase.

Last year, Liberty Link rice, made by Bayer, contaminated rice in several states including Missouri and Louisiana, resulting in shipments rejected by Europe, which is largely against genetically modified crops.

The report also highlights the risk of crop damage from drifting herbicides. Monsanto's Roundup-ready seeds are genetically altered to be resistant to the company's Roundup herbicide. So when a farmer sprays a field, everything but the crop is killed. The fields are often sprayed by airplane, so organic crops could be damaged if the herbicide drifts into their fields.

The merger could also exacerbate rapidly increasing seed prices, the report found. They increased 240 percent from 1995 to 2005, in part because of extra technology fees charged by biotech companies.

Another concern is that Delta and Pine along with the USDA own patents to a highly controversial Terminator cottonseed, which is genetically altered to die after one season's use, so farmers can't save seed from year to year.

In response to industry concern, company officials have pledged not to introduce Terminator seeds, but say they reserve the right to reconsider.

The Terminator was a concern among critics when the companies first proposed a merger nearly 10 years ago.

Not everyone believes the merger poses major risks to agriculture or consumers. Owen Taylor, editor and publisher at AgFax Media, a financial analysis firm that covers the commodities business, called the Center for Food Safety's report "the same old rhetoric."

"The simple fact is that the vast majority of U.S. cotton farmers favor biotech approaches, and as the market has shaken out, a large part of that is built around DPL varieties and Monsanto's technology," Taylor said. "Farmers can compare performance every year, both in their own fields and in non-biased university trials. They buy what works best."

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