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Should You Fear the Monsanto Label?

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In May of 2012, an international protest against the use of genetically modified organisms (GMOs) was held and given the title 'March Against Monsanto'. Follow-up events coupled with other grassroots efforts, movies (GMO OMG, etc), and lawsuits have hurt the public image of Monsanto (NYSE: MON  ) , a leader in the production of genetically engineered seed. Along with competitors like Syngenta (NYSE: SYT  ) and DuPont (NYSE: DD  ) , Monsanto is caught between the responsibility of meeting an ever-growing food demand and appeasing the public's perception of the methods and technologies used to accomplish the task.

Controversy over health impacts and labeling
Regulatory agencies in 25 countries and in the United States have investigated the safety of GMOs, and concluded that they are safe for both human consumption and for the environment. Skeptics of these conclusions cite accusations of scientific misconduct and falsified data in toxicology reports, as well as the indirect influence of a huge lobbying effort related to regulations on genetically engineered crops. The substantial share of Monsanto's lobbying effort and dollars in 2012 was directed toward the successful opposition to Proposition 37 in California, which would have mandated the disclosure of GMOs used in food products in the state.

Whether the public perceives GMOs as unhealthy is not necessarily the issue. The labeling of products that contain GMOs is the subtly different and more pertinent issue in that it implies a potential health-related significance to the presence of GMOs. The impact that such labeling would have on the bottom line for Monsanto is entirely speculative, though one can look to analogous situations to predict the effects.

It wasn't clear whether the labeling of trans fat content in foods would lead Americans to eat fewer snack cakes, but manufacturers, adjusted recipes to achieve the label of trans fat-free in anticipation that Americans would care. Kraft Foods eventually reformulated Oreos, the Colonel's beloved recipe for fried chicken was reworked, and the trans fat content of Crisco was trimmed.

While the purchasing decisions of Americans may or may not be influenced by GMO labeling, if the manufacturers of the foods fear Americans would care, then an effort will be made to reduce GMOs in food. Such a response would have its effect on the domestic demand for GMO crops, and in turn hurt Monsanto, DuPont, and other companies in the field of bioengineered seeds.

The world without GMOs
The often ignored other side of the GMO story is the potential to reduce international food poverty that will continue to grow unless addressed. Total food demand in developing countries is estimated to increase by 115% between 2000 and 2030. Inefficiencies in pre-consumer handling in developing countries only serve to exacerbate the problem, as 30-40% of yields are lost pre-consumer.

Pre-consumer losses in the absence of crop-protection, most notably the use of engineered seed, drastically increase. Currently, GMOs provide the most effective and fastest-acting solution to the problem of international food shortages, a reality that will continue for the foreseeable future.

Balancing the issues
For the time being, Monsanto and their competitors in agricultural bioengineering have been able to prevent GMO labeling and any associated consequences. The anti-GMO community will continue to grow with continued grassroots efforts, and the issue will inevitably again be put to a vote in California and across the country. If labeling is mandated, expect an initial hit to the perceived value of all bioengineered seed companies, and most prominently Monsanto.

However, the international presence of Monsanto, Syngenta, and DuPont, among others, and the corresponding growth in food demand, serve as reminders of the relatively small scale of the domestic GMO labeling issue. Furthermore, 98% of the domestic soybean crop and roughly half of the corn harvest is used for livestock feed, not for direct inclusion in food products.

If public concern were to spread to developing countries or turn to the dietary impacts of GMOs on livestock, then there would be cause for worry among investors. Until then, invest with confidence in Monsanto based on growth and stability from the international market, so long as you don't mind being labeled as a Monsanto shareholder.

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Read/Post Comments (16) | Recommend This Article (1)

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  • Report this Comment On October 29, 2013, at 11:03 AM, CatAssTrophy wrote:

    If GMOs are so safe, why do the producers fear labeling so much? Why are they so unwilling to allow independent testing of their products. When Biotech Corporations act like they have something to hide about their products, it puts the populace on alert that something isn't right here. The fact that people get allergic reactions to the foreign DNA added to GMO crops dosn't help their argument either. When Soy was crossed with brazil nuts, people allergic to tree nuts had bad reactions to the GMO soy. Now food allergies have become epidemic, and GMOs are part of that problem.

    GMOs have been labled in Europe for years, and now the EU has banned GMOs, I'm sure this was done because they are so safe and benefical to human health, NOT! Many undevloped countries ban GMOs because they don't want people saving the seeds from GMOs and contaminating the rest of the non GMO crops.

    GMOs have never out produced conventional crops, and they usually produce less, so feeding the world is a lie. Many GMOs are designed to not die from Glyphosate(Round Up) so the fields are heavily doused in the poison which has recently been found to be much more hazardous then Monsanto has led the public to believe.

    GMOs are about Biotech Corporations controlling the food supply with patents. It has nothing to do with feeding the world or making better crops.

  • Report this Comment On October 29, 2013, at 11:11 AM, anindakumars wrote:

    Support CatAssTrophy's comments entirely. I refuse to buy stocks of a company that treats humans as guinea pigs and laboratory rats.

  • Report this Comment On October 29, 2013, at 11:37 AM, fckohn wrote:

    Because CatAss, as the writer so clearly points out, the assumption from the uneducated consumer is that labeling infers a hazard. Which as the writer points out, has never, I REPEAT NEVER, been demonstrated. This is in contrast to the clearly validated health concerns from trans fats.

    All of CatAss' adverse claims in paragraph 1-3 are total BS, not true, and clearly debunked by referreed scientific literature.

    Please work to free yourself from abject ignorance.

  • Report this Comment On October 29, 2013, at 12:39 PM, alphaflight wrote:

    There's little proof to the validity that GMOs yield higher crops. Most studies show that GMO crops will have lower yields and in fact require more pesticide use than non GMO crops. fckohn needs to wake up. The scientific literature and the real life evidence Just look back at the recent look back on the last 10 years of GMO soy production in Argentina.

  • Report this Comment On October 29, 2013, at 2:09 PM, FreakyKrueger wrote:

    Click on the name of the author of the article and you will see he has worked in the Biotech industry. We are what we eat. Hell No GMO!

  • Report this Comment On October 29, 2013, at 2:28 PM, stevor86 wrote:

    yes, SHUN MONSANTO and if we're lucky, we can bankrupt them (but that won't happen since the Rulers NEED Monstersanto to KILL people and make the world "more green" with a lower number of those foul CO2-breathing beings that are a "waste of oxygen")

  • Report this Comment On October 29, 2013, at 2:46 PM, NoCAL wrote:

    CatAss you have been decieved. There was never a soy/brazil nut combination that has made a single person sick. There was some research on putting a single protein from brazil nuts into soy. When it was discovered the the protein could possibly be allergenic, the research was stopped. It never made it out of the lab. And Monsanto was not the company doing the research. As for the claim that GMO crops should increase yields, once again, you have been lied to. The original GMO crops in the US were never meant to increase yields. They were only meant to have equivalent yields with much simpler agronomic practices. Next generation GMO products such as the Monsanto soy Roundup Ready 2 Yield provide as much as 7-10 bushels more per acre. In developing countries were yields have traditionally been lower than in the US, GMO crops have Significantly increased yields. Corn and Cotton protected by the Bt protein have shown increases of up to 178% in some African countries and India.

    There are very few countries that have banned GMOs outright. You state that most do and that is incorrect. There is for instance a ban on growing GMO corn in France but they import GMO corn from the US by the cargo ship full. So, if you are wrong on so many of these facts, what else could you possibly be wrong about? There are over 500 independant studies done by labs in the EU showing safety. That info is freely available on PubMed and is good enough for me.

  • Report this Comment On October 29, 2013, at 3:14 PM, jenagles wrote:

    This very same conversation could have been had regarding tobacco and Phillip Morris 50 years ago.

    In fact we could have had this SAME discussion when Monsanto said that Agent Orange was safe, or PCB''s, or Dioxin . . .

    All of the government and agency safety assurances have been made based upon industry funded science

    The ACSH is funded by the industry to support industry claims - are we really still having this discussion?

    If you wish to buy stock in a company KNOWN for poisoning people and the planet - just know that we want our poison labeled and that it will effect those consumers who choose to vote with their dollars.

  • Report this Comment On October 29, 2013, at 3:31 PM, TMFBlacknGold wrote:

    "Most studies show that GMO crops will have lower yields and in fact require more pesticide use than non GMO crops."

    Most GMOs are not tied to glyphosate resistance, thus reduce pesticide use. From 1996 to 2011, global consumption of pesticides fell 9% while Bt cotton and Bt corn alone saved farmers $57 billion in pesticide costs.

    Labeling foods that contain GMOs for no other reason than to scare consumers -- when no health risks have been found -- is absurd. Billions of people have eaten such foods by now. If there were adverse health effects they surely would have been exposed by now.


  • Report this Comment On October 29, 2013, at 3:58 PM, alphaflight wrote:

    TMF - you are incorrect. Pesticide use had fallen initially with GMO crops but has had to rise recently because of the glyphosphate resistant weeds. I don't know how you can say GMOs are not tied to glyphosphate resistance when the problem is heavily localized to GMO crops. - study that analyzed the first 16 years of GMO crops in the US -

    The medical literature is questioning more and more whether the rise in bowel and inflammatory diseases that have climbed with greater exposure to GMO in the food chain could potentially be related to some of the genes used in GMO crops from E.coli and Botulinum toxin. It's nice to read the research sponsored by Monsanto and the like and say case closed, it's all good. But that's not the reality.

  • Report this Comment On October 29, 2013, at 5:32 PM, getthetruth2 wrote:

    • CATASSTROPHY: says; If GMOs are so safe, why do the producers fear labeling so much?

    • Because the label is deceptive – it suggests they are different in nutrition or safety but they are not and because they know the main reason is to try and ban them (as you confirm below in your text.

    • You say Why are they so unwilling to allow independent testing of their products. –I say – they are not but a fair amount of testing that has been done has been funded by activists funded by organic millionaires and have been showed to be bad science by the government and academic groups so academic testing in a bad way is not eth solution

    • You say: When Biotech Corporations act like they have something to hide about their products, it puts the populace on alert that something isn't right here. I say this is no different that pharmaceutical companies. They like seed companies have to conduct their testing under GLP conditions (look it up) and no academic could tolerate the oversight and quality of this type of work.

    • You say: The fact that people get allergic reactions to the foreign DNA added to GMO crops doesn't help their argument either. I say: There is no a single incident of someone being harmed by an allergen introduce by GM. And BTW DNA is not allergenic and its in all food – get an education.

  • Report this Comment On October 29, 2013, at 5:33 PM, NoCAL wrote:

    i wish people could learn to distinguish between the common noun pesticide and the more correct nouns herbicide and insecticide. TMF statements about insecticide use are valid and true to this day. I have personally talked with farmers in Argentina who used to spray for cotton bollworms on a WEEKLY basis. With Bt Cotton, they spray once or twice per season for other pests. They never spray for worms. So, it is fact that insecticide use has gone down and continues to go down. Herbicide use in total active ingredient has increased due to the replacement of many other post emergant herbicides by Roundup. In RR corn, Roundup replaced Atrazine, a known cancer causing herbicide that poisoned groundwater and led to identifiable, quantified diseases in humans. Roundup has never been shown to have detrimental health effects and degrades in the soil from the action of natural microbes. So, if total poundage of glyphosate has increased at the expense of more dangerous herbicides, great. Numbers can work many ways and just saying "Pesticide use has increased" means nothing to me. It must be put into perspective to be meaningful.


  • Report this Comment On October 29, 2013, at 5:33 PM, getthetruth2 wrote:

    • You say : When Soy was crossed with brazil nuts, people allergic to tree nuts had bad reactions to the GMO soy. Now food allergies have become epidemic, and GMOs are part of that problem. I say : great example of an ill informed person – didn’t happen . Pioneer Dupont not Monsanto studied putting a gene from Brazil nuts into soy to make the so insect resistant but since some people are allergic to Brazil nuts they stopped the work and never got close to making it. This shows the system of check works

  • Report this Comment On October 29, 2013, at 5:35 PM, getthetruth2 wrote:

    You say: GMOs have never out produced conventional crops, and they usually produce less, so feeding the world is a lie. Many GMOs are designed to not die from Glyphosate(Round Up)

    I say: not true : why do you think 80-95% of corn and soy in US is GM and also in Argentina and Brazil and S Africa ...because it does yield higher and uses less pesticide -- if you see a report on more pesticide look who produced it - someone funded and active with Greenpeace.

    You argument defies logic and the facts

  • Report this Comment On October 29, 2013, at 5:44 PM, getthetruth2 wrote:

    To clear up the view that GM requires more herbicide : they increased the use of glyphosate. They olowered teh use of other herbicides for 16 years until recently when now occasional use of other herbicides is needed. Gm crops Bt corn and cotton and soon Bt soy in Brazil produced massive savings of toxic insecticides sprayed onto these crops --- and the insecticide producers (not Monsanto) are pissed off about it. Before glyphosate tolerant crops 95+% of soy and corn were treated with herbicides ( most longer lived and more toxic than glyphosate). Noone is allowed to say that any herbicide is safe just as we have to be careful about dihydrogen oxide. THis is also very toxic kills people every year and is not labeled as a hazard. Herbicides are labels so are all of Monsanto's products and Monsanto isn't apposed to voluntary labeling that is correct. If you want non-GMO buy organic its defined as non-GMO. But this isn'y enough for organic millionaires funding the labeling initiative. They are desparate to justify their higher prices.

    That reminds me if GM produces less than organic why does organic cost more ..................use your brains

  • Report this Comment On November 03, 2013, at 2:39 PM, dstrick7 wrote:

    #1, I hate that I had to sign up to get newsletters to write a post on here.

    GMO farming is NO MORE efficient than traditionally grown crops. GMO crops (like corn with Bacillus thuringiensis toxin production) have extremely high levels of pesticides, and herbicides (farmers are using such ridiculously high levels Roundup, that it permeates, and totally covers all parts of the plant...Roundup resistance from weeds is making it worse). I'm looking into seeing if I can get my 401k to avoid investing in Monsatan, since I really don't want to contribute to their efforts.

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Shamus Funk

Shamus is a freelance writer for the Motley Fool focusing on energy, agriculture, and materials. He has his Ph.D. in Chemistry from North Dakota State University. After graduation, Shamus worked at a small biotechnology firm before becoming a professor of chemistry.

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