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You May Hate Monsanto, But It Doesn't Matter

You can't rewrite history, and Monsanto's (NYSE: MON  ) storied past is littered with less than reputable tales of controversial chemicals gone wrong, along with more recently disputed concerns over genetically modified organisms (GMOs) and the business practices used to spread GMO seeds into mainstream agriculture. At the same time, it is unfair to judge a company based entirely on past practices, and efforts made by Monsanto to become a more socially admirable company should be recognized.

Will Monsanto ever be able to change its reputation as a morally decrepit organization? And, equally important, does it need to?

A long list of evils
Monsanto is constantly berated for its history of developing revolutionary but controversial products. From its manufacturing of DDT and Agent Orange to its more recent development of Roundup and genetically engineered seeds, Monsanto has established a less-than-pleasant reputation as a company that the public loves to hate.

Chemical companies in general are good targets for citizen angst -- by their nature they need to develop new technologies, and some inevitably will turn out with side effects. DuPont (NYSE: DD  ) and Dow Chemical (NYSE: DOW  ) have many of the same opponents as Monsanto, and for similar reasons. These companies develop and have developed technologies that, in spite of all of the good intentions, ended up with negative side effects. These companies may be far from innocent of all of the accusations made against them, but despite the most discouraging parts of Monsanto's history being well known, there are more reputable business practices by Monsanto that go unrecognized.

Some good to be found
Anybody who has lived with or seen first-hand the effects of Agent Orange may forever be unforgiving of Monsanto, Dow Chemical, or the U.S. government. Nonetheless, numerous technologies developed by Monsanto have made the world a better place, and the company has been well recognized as a leader in corporate and workplace behavior.

Alongside the development of Roundup-resistant GMOs, Monsanto is investing significant resources to develop drought-resistant crops and other seeds with traits needed to grow food crops in challenging, food-poor regions of the world. Chemicals developed by the company have included drugs used to treat Parkinson's Disease and arthritis, as well as mass-produced LEDs and indispensable industrial chemicals.

Consumer treatment may be suspect, but Monsanto treats its employees well. The company has been often recognized for its company diversity and corporate equality, and it has ranked high on several 'best companies to work for' and 'top employer' lists from top business publications.

The takeaway
People are scared of science, and they are scared of change. When science is the reason for change, it creates a whole new level of paranoia.

America's major chemical companies are deserving of severe criticism for the creation and marketing of chemicals with negative effects to both humans and the environment. Based on a sketchy past, consumers are right to be skeptical of the more recent technologies introduced by Monsanto, namely GMOs. However, a mishandling of past chemical development processes does not automatically make Monsanto and GMOs guilty in the same manner as does the government-supported and encouraged production of DDT and Agent Orange.

When the past, present, and future are all taken into consideration, investors may be taking a risk when investing in controversial companies due to the fear of a widespread consumer response. However, Monsanto and its peers in the industry have weathered a lot of negative feedback in the past and have survived and even thrived in spite of it.

Like it or not, Monsanto will be around for a long time to come. Maybe it will use the next fifty years to repair a broken reputation.

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Read/Post Comments (3) | Recommend This Article (3)

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  • Report this Comment On July 23, 2014, at 4:20 PM, Moneymaniacal wrote:

    The Monsanto of old is not even the Monsanto of new. If you trace the corporate lineage, you will see that all the chemical liabilities (and employees) went with the old Solutia spinoff, now Eastman Chemical's acquisition. The Monsanto of new was created from a completely different spinoff. Please do your homework next time. It hurts your credibility to not understand the corporate structure of these separate companies. Monsanto may have done itself a huge disservice by recycling the name, but they did not recycle the environmental damage of a long distant, unrelated predecessor.

  • Report this Comment On July 23, 2014, at 6:35 PM, klausmager wrote:

    There is absolutely no indication that Monsanto has changed anything. It continues to oppose the public's will by influencing politics, instead of making their case in science with rational, documented information. Once I see them trying to actually win over the consumer of their end products I will change my opinion. The behavior of this company in the market is despicable, disgusting.

  • Report this Comment On July 31, 2014, at 11:08 AM, hacket wrote:

    The title of this article really brings to mind the time-tested phrase "Pride cometh before a fall". Monsanto is coming to end and likely sooner than you like, mainly due to resource constraints. They are driven by oil and its only getting more and more expensive. Top it off with changing sentiment in the food marketplace and I would certainly be selling right now...

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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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