The NPR piece shows what good PR can do and get for a company that
knows how to "work with" the media. Not a bright day for NPR. What amazes
me is that senior Monsanto officials can get away, unchallenged, with saying
things like "RR beans lowered their (farmers') costs and raised their
yields." The evidence is now overwhelming and indisputable that average
yields of RR varieties are about 4-6% less than conventional varieties. The
definitive and most recent comparative analysis was carried out by Dr. E.S.
Oplinger of the Univ. of Wisconsin, Madison, who has managed a North Central
regional project assessing soybean varietal performance for years. Dr.
Oplinger compared yields of 5,172 conv. varieties paired with 3,067 RR
varieties in 8 states in 1998. The RR varieties yielded between 86% and
113% of the conv., and average yields were 96% of conventional. There were
just two areas where RR did better -- Illinois and southern Michigan.
Outside these areas the average yield drag was greater, on the order of 6%
to 8% (data from "Performance of Transgenetic Soybeans -- Northern US," Dr.
E.S. Oplinger, M.J. Martinka, and K.A. Schmitz, Dept. of Agronomy, UW-Madison).
This places the minimal average yield drag at about 2 bushels per
acre, or $10.00 (and it was much more on many farmers). That $10.00 plus
the technology charge, plus the 2-3 applications of Roundup (not the one
alleged in the piece), plus the 2 or 3 other herbicide a.i.s that must be
applied make for the most expensive soybean seed+weed management system in
modern history -- between $40.00 and $60.00 per acre depending on rates,
weed pressure, etc. Not long ago, in 1985, the average seed plus weed costs
on farms in Illinois was $26.72 per acre (USDA cost of production data), and
represented 23% of total variable costs; now, they represent 35-40%. (For
details and data sources, see the paper I did for the Univ. of Illinois
symposium at <www.pmac.net/IWFS.pdf>). No wonder Monsanto is throwing in
free resprays and replanting, and other crop insurance-like benefits as an
added bonus.
Every independent set of data, recent analysis of RR beans I have
seen reaches the same conclusion; the technology increases costs somewhat,
but imposes a "price" farmers are willing to pay for the
simplicity/robustness of the weed management system. Oplinger et al. end
their paper saying: "It is anticipated that soybean growers will continue to
increase acres planted to RR varieties and will sacrifice yield for ease of
weed control." They will also sacrifice some net income per acre. This is
a perfectly rational reason for farmers to adopt the technology; weed
management is probably the number one management challenge all soybean
farmers face. Monsanto should not be ashamed to cite these reasons in
explaining why the technology is being adopted. But Monsanto needs to drop
the "feeding the world", "lowering costs", "lowering pesticide use" claims
because they do not hold water and will undermine, further, the reputation
of the corporation, and in so doing feed the already considerable cynicism
abroad about the trustworthiness of this company.
While Monsanto does not seem to worry much about losing consumer
trust in Europe and Japan, U.S. farmers (and the U.S. government) should be
concerned and will, in the end, pay the price if the effort to drive RR
beans down the throats of Europeans backfires into a search for non-GMO
soybeans from other countries.
Plus, things are not getting any better down on the farm. Soybean
prices are way down, export markets are soft. As weed shifts continue in
areas planted heavily to RR beans, and as resistance spreads to additional
weed species (the first signs of tolerant weeds are appearing in several
states), farmers will have to increase rates of Roundup applications and
intensify use of other active ingredients, to fill gaps in control. Costs
will rise, the income squeeze will get even worse.
Contrary to a Monsanto scientist's claim on the NPR piece, Roundup
does not kill everything green except for transgenic crop varieties. If
that were the case, most farmers using RR systems would not be applying at
least 2, and on many farms, three additional active ingredients.
Someone posted that Monsanto's stock price is holding. Keep
watching that space. The Dupont-Pioneer deal seals off the most likely
route to salvation for Monsanto -- Dupont's deep pockets. Monsanto is
desperate for a new partner to help cover its $700 million plus cost of
capital, etc from the seed mergers of the past few years. Not too many
companies around that can float that sort of cost. There remain a couple of
major deals to go in the pesticide and seed industries, and then it will be,
for all intents and purposes, over. Expect Monsanto, Zeneca, American Home
Products, Novartis, and Bayer to be involved in a few additional mega-deals
in the next 12-24 months.
We will have one industry where we used to have two, and 4-6 major
players where there used to be a couple of dozen, and many dozen regionally
significant players. No one has much of an idea, nor any credible way to
project the consequences of these changes. Its unchartered water in
turbulent times. We are all invited along for the ride, which will be
exciting and at times divisive, as the economic interests of one part of the
agricultural system (probably farmers) suffer at the expense of other
players. There will be many surprises, positive and negative. What seems
clear to me, in any event, is that public institutions and policies, like
those governing research, technology returns, intellectual property,
markets, information, are not keeping up and that new forces shaping the
performance of the new seed+pesticide industry will largely emerge within
the private sector, from the demand side, both farmers for inputs and
consumers for food.
chuck benbrook
Charles Benbrook 208-263-5236 (voice)
Benbrook Consulting Services 208-263-7342 (fax)
5085 Upper Pack River Road benbrook@hillnet.com [e-mail]
Sandpoint, Idaho 83864 http://www.pmac.net
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