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How Terrible Is Monsanto?

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Monsanto (NYSE: MON  ) , the global provider of agricultural products, finds its reputation being slammed in a recent food documentary, Food Inc. Along with rivals DuPont (NYSE: DD  ) and Syngenta (NYSE: SYT  ) , Monsanto not only provides chemicals for agriculture production but is also a leader in providing genetically modified seeds

According to a recent briefing by The Economist, the company has many admirers: “Bill Gates sees Monsanto’s innovations as essential to the agricultural revolution in Africa to which his charitable foundation is committed. Josette Sheeran, the head of the United Nations World Food Programme, is also a fan.”

However, there are plenty of naysayers as well. Known for its "Violator Exclusion Policy," which punishes and sues farmers if they break the terms of a license (basically, if they hold onto seed for longer than one crop season), the company is accused of using extraordinarily strong-armed tactics.

The American Antitrust Institute, an independent competition watchdog, warned: “[W]ere it not for the early decision to broadly license its patented genetic traits technologies, Monsanto would control large, totally closed platforms in transgenic seed that could be challenged only by the unlikely emergence of rival platforms.”

Notorious for co-producing Agent Orange, an herbicide used in the Vietnam War, Monsanto is no stranger to controversy. This time though, it seems to be caught in between two camps -- one that applauds its innovation, and one that condemns its global clout and alleged incivility toward farmers.

Fools, what do you think? Is Monsanto on the side of good, is it evil, or is it simply focused on maximizing profits? If you have an opinion on any of these stocks, drop a comment in the box below, or come and join us on CAPS, absolutely free, to learn more about these and countless other interesting investing ideas. 

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Jordan DiPietro doesn’t own any shares mentioned above. Monsanto is a Motley Fool Inside Value pick. Syngenta AG is a Motley Fool Global Gains selection. The Fool’s disclosure policy highly recommends watching the documentary Food, Inc.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 07, 2009, at 2:07 PM, funfundvierzig wrote:

    Earlier this year, DuPont Management and their covertly bankrolled "masked" third-party operatives have been systematically smearing Monsanto's business, charging that as a "monopoly", Monsanto was preventing DuPont from commercialising supposedly great new seeds from Pioneer, DuPont's seed unit.

    In light of last Friday's (Dec. 4, 2009) admission by DuPont Management, reading between the lines, that their over hyped seed technology, parodically called OptimumGAP, was flawed with poor yields, the "antitrust" cries of DuPont execs are hollow and unfactual, if not downright dishonest.

    ...funfun..

  • Report this Comment On December 07, 2009, at 2:08 PM, TideGoesOut wrote:

    For me it's all about that ""Violator Exclusion Policy". They've not only done what you've said regarding second-year use of the seeds, but also suing farmers who are next to those fields for unintentional bleed-over of GM crops onto land for which seeds were not purchased. Also, they've sued over failures of their crops not to restrict to a single season...not the fault of the farmer, but the fault of seeds that were not supposed to be fertile.

  • Report this Comment On December 07, 2009, at 2:21 PM, dudemonkey wrote:

    > For me it's all about that ""Violator Exclusion Policy".

    Same thought here. I'm happy that they're looking for ways to get more food out of each acre of land, but I will stay away from the company as long as their business practices make the Gambinos look respectable. One reason is that I couldn't look my spouse in the eye and tell her that our futures are tied to such practices, the other is that this sort of thing has a way of coming back to bite you.

    If you have to talk yourself into a potential investment, it's probably not a good one.

  • Report this Comment On December 07, 2009, at 2:44 PM, floydyouman wrote:

    The genetically modified debate is a fair one, but a couple of other things in this article are used by the non-GMO crowd with little to stand behind...

    The "violator exclusion policy" has been blown out of proportion. Monsanto finds most violators through 3rd party reports (neighbors/dealers upset with someone they know who is keeping back seed). They are usually able to settle most of these cases without ever going to trial. Sometimes however, they do go to court. In my mind, this is relatively rare, with 138 lawsuits filed since 1997 in the US (as of July 2009). This averages about 10 per year for the past 12 years. To date, only 9 cases have gone through full trial. In every one of these instances, the jury/court decided with Monsanto.

    It’s pretty straight forward, you are buying the seed/technology & you sign off that you won’t hold seed back. If you do it, you run the risk of being busted (like stealing anything else). Keep in mind that farmers are Monsanto’s customer, they don't like to do this or profit off of it. It also isn’t fair to let people do this when most are going about it correctly. If farmers want to hold seed back, they can buy non-RR varieties.

    The Agent Orange thing is old as well, the US government contracted with Monsanto to produce it. Our government went & used/sprayed it on the jungle/people. It should also be noted this was during a time of war.

  • Report this Comment On December 07, 2009, at 4:06 PM, madchemists wrote:

    First of all, the claim that Monsanto is suing farmers who have cross contamination is absurdly false. The trait that they use to track is the glyphosate resistance gene. If the farmer didn't KNOW that he seed had the gene they he wouldn't have sprayed with glyphosate. So it's pretty easy to spot the liars.

    And secondly, why shouldn't they protect thier invention? No one is forcing a farmer to buy glyphosate resistant crops, but when he does he signs an contract. So it's pretty clear.

  • Report this Comment On December 07, 2009, at 5:55 PM, funfundvierzig wrote:

    In his published Aug. 17, 2009 letter to DuPont Chairman Chad Holliday, Monsanto Chief Hugh Grant called for an investigation by independent DuPont Directors in the war of "dirty tricks" being waged by DuPont to defame Monsanto's business. Grant adverted to the secret deployment of "masked" third party operatives.

    Query, how many of these hostile bloggers cropping up on sites on the internet, spraying dishonest disinformation and deception are secretly bankrolled by DuPont's dirty-dealing Management?! At DuPont, the sleaze factor is off the charts. Such is the symptom of a unethical Company in deep, deep trouble.

    ...funfun..

  • Report this Comment On December 07, 2009, at 8:20 PM, uhlyfool wrote:

    Only thing to add is no one has mentioned where the money from settlements on illegal use of patented seed technology ends up. All that Monsanto collects goes to fund Agricultural Youth Scholarships. Food, Inc doesn't deserve to be even acknowledged. People want to treat farmers like they are in need of protection. They are savvy business men and women who can make the choice to plant whatever seed they want. If farmers wanted conventional seed without traits they would demand it and then there wouldn't be market for the products Monsanto produces. They are phenomenal and create more value and possiblilities for farmers worldwide than many can understand because they are not aware of the meaning of sound science, but rather fall prey to hearsay and ungrounded assessments.

  • Report this Comment On December 07, 2009, at 8:22 PM, uhlyfool wrote:

    Only thing to add is no one has mentioned where the money from settlements on illegal use of patented seed technology ends up. All that Monsanto collects goes to fund Agricultural Youth Scholarships. Food, Inc doesn't deserve to be even acknowledged. People want to treat farmers like they are in need of protection. They are savvy business men and women who can make the choice to plant whatever seed they want. If farmers wanted conventional seed without traits they would demand it and then there wouldn't be market for the products Monsanto produces. They are phenomenal and create more value and possiblilities for farmers worldwide than many can understand because they are not aware of the meaning of sound science, but rather fall prey to hearsay and ungrounded assessments.

  • Report this Comment On December 07, 2009, at 10:19 PM, nogmo4me wrote:

    Monsanto makes poison. They make your food resistant to glyphosate which is a weed killer. They make their corn toxic to insect. Their cronies in office DO force people to grow GMO's,--through farm policies. Monsanto hires P.R. people to spew their lies at 4-H meetings, through NPR ads and a host of other places. Uhlyfool, who pays you to surf the web looking for opportunities to defend Monsanto? Anybody can do a google search and find a host of evidence that proves that the #1 goal of this corporate villain is to monopolize the food and fiber crops of the world.

  • Report this Comment On December 08, 2009, at 12:43 AM, singlady wrote:

    Boycott Dupont, Monsanto and Syngenta. Perhaps they can show proofs how much of their planted crops today has gone to feed the poor, and that they are still alive or without side effects? There are reasons why more and more people are getting allergies and supermarkets are stocked with "wheat-free" "gluten-free:" foods as customers are reacting to such chemicals. The reasons for the demand to grow Corn in such magnitude - let's face it - is so that large portion of those go into making ethanol / fuel!

    Non-GMO! Eat with your conscience.

  • Report this Comment On December 08, 2009, at 1:35 AM, jakkaja wrote:

    Dear All,

    More and more honest farmers are using the technology; More and more seed companies are licensing the technology. The products meet the needs- the farmers and innovators (doers) succeed. Innovators are committed to more work to meet the needs. Simple. The rest of us can blog for ever and ever because there is so much time for the non-doers to pick on the doers. I agree with the words of President Teddy Roosevelt:

    "It is not the critic who counts, not the man / woman who points out how the strong man stumbled or where the does of good deeds could have done better.

    The credit belongs to man/woman who is actually in the arena:

    - whose face is marred by the dust and sweat and blood

    - who strive relentlessly

    - who errs and comes short again and again

    - who knows the great enthusiasm, the great devotions, and spends in a worthy cause

    - who at the best knows at the end of the triumph of high achievement

    - and who at the worst, if he / she fails, at least fails while daring greatly so that his / her place shall never be with those cold and timid souls who knew neither victory nor defeat." Teddy Rossevelt

  • Report this Comment On December 08, 2009, at 1:43 AM, jakkaja wrote:

    Dear All,

    More and more honest farmers are using the technology; More and more seed companies are licensing the technology. The products meet the needs- the farmers and innovators (doers) succeed. Innovators are committed to more work to meet the needs. Simple. The rest of us can blog for ever and ever because there is so much time for the non-doers to pick on the doers. I agree with the words of President Teddy Roosevelt:

    "It is not the critic who counts, not the man / woman who points out how the strong man stumbled or where the does of good deeds could have done better.

    The credit belongs to man/woman who is actually in the arena:

    - whose face is marred by the dust and sweat and blood

    - who strive relentlessly

    - who errs and comes short again and again

    - who knows the great enthusiasm, the great devotions, and spends in a worthy cause

    - who at the best knows at the end of the triumph of high achievement

    - and who at the worst, if he / she fails, at least fails while daring greatly so that his / her place shall never be with those cold and timid souls who knew neither victory nor defeat." Teddy Rossevelt

  • Report this Comment On December 08, 2009, at 8:37 AM, madchemists wrote:

    Singlady,

    You talke about gluten alergeries. You do realize that there are no GMO wheat strains being cultivated don't you?

  • Report this Comment On December 08, 2009, at 9:46 AM, troyc71 wrote:

    Hmm....interesting. I went to the Food, Inc. website and I was unable to download the movie for free. I suspect they have it copyrighted, and are trying to protect their investment, and would frown upon anyone making unauthorized copies of their 'investment'. Anyone see the irony (or dare I say hypocrisy) here? Am I to assume that they are just as evil as they make Monsanto out to be since they won't just give away their product for free? Monsanto should allow their technology to be freely copied/given away, but the Food Inc. filmmakers must be allowed to protect their property? Good grief. By the way, farmers can buy their seed from whomever they want. They buy genetically modified seed because it produces more food and makes them more money. Period.

  • Report this Comment On December 08, 2009, at 12:17 PM, FairMarketFarmer wrote:

    Re: 'floydman' and 'madchemists'

    You both bring up the point that if farmers don't want to buy Monsanto's product, then they don't have to. However, unfortunately most often farmers MUST purchase Monsanto's products because they are the only seeds available. In addition to dramatically investing in genomic research & development individually, Monsanto has been rapidly buying up seed companies across the US and internationally. Once in charge they phase out all non-biotech seed varieties in competition with their RR or Bt crops. Further tightening its stranglehold on the seed industry, Monsanto forces seed dealers to sell at minimum 70% Monsanto seed to farmers, or it will not allow the dealer to sell Monsanto brand seeds.

    Re: Madchemists - you are quick to fault Singlady for her mistake, however you do realize that all kinds of farmers use glyphosate don't you? You say that "If the farmer didn't KNOW that he seed had the gene they he wouldn't have sprayed with glyphosate. So it's pretty easy to spot the liars" - however glyphosate (aka "Roundup") has been widely used by farmers to control weeds since its introduction in 1976. Were you also unaware that most orchards use glyphosate to control weeds around their trees.

  • Report this Comment On December 08, 2009, at 12:35 PM, troyc71 wrote:

    Fair Market Farmer:

    Since Pioneer and Monsanto have roughly equal market share in the seed market (and Syngenta & Mycogen fighting for their piece of the pie as well), the argument that farmers have no other choice disappears rapidly. That doesn't include the myriad of regional companies out there also.

    And, madchemist's point was that the farmers wouldn't be spraying their CROP with glyphosate unless they knew it was RR, since glyphosate would kill the crop!

  • Report this Comment On December 08, 2009, at 1:55 PM, FairMarketFarmer wrote:

    Re: troyc71

    According to the Organization for Competitive Markets, "Monsanto has acquired dozens of independent seed companies in the last decade. It controls 70% of the transgenic corn market, more than 90% of the transgenic soybean market, and 90% of the cotton seed market."

    My comment was that farmers have been spraying volunteer crops with glyphosate as well as wandering crop to clean up rows as well as edging.

  • Report this Comment On December 08, 2009, at 2:50 PM, funfundvierzig wrote:

    Foolish Readers,

    The cited Organization for Competitive Markets has been exposed as one of those sleazy mouthpieces secretly bankrolled by DuPont Management to smear Monsanto's business! It's one more "dirty trick" pulled by the fading and faltering DuPont Company, which rarely competes on the level or transparently.

    In the meantime, superior-managed Monsanto is rolling out two game-changing blockbusters, SmartStax and Roundup Ready Yield2 in corn and soya respectively. Pioneer is rolling out NONE for the 2010 season.

    ...funfun..

  • Report this Comment On December 08, 2009, at 3:19 PM, troyc71 wrote:

    FairMarketFarmer:

    Your numbers now refer to *traits*, not seed, as you originally claimed. Regardless, farmers are *choosing* to buy seed from various companies with Monsanto traits such as Roundup Ready. They are NOT *choosing* to buy alternatives such as Liberty Link crop seed (another herbicide resistant trait) because they don't (generally) perform as well. The simple fact is that no one is forcing farmers to buy Monsanto seed or traits. There are alternatives available (again, in seeds or traits) throughout the crop-growing fruited plain. However, they are *choosing* to buy Monsanto's products because they (generally) perform better than the competition. You claimed that farmers "MUST purchase Monsanto's products because they are the only seeds available". You are, quite simply, wrong. They are purchasing Monsanto's products because those products are making the farmers more money.

    And, again, read madchemists' original post. Farmers have NEVER applied glyphosate to their CROP because that would kill the CROP. Therefore, to 1) spray your CROP with glyphosate and then claim 2) you didn't know it was glyphosate resistant and 3) it must have been "unintentional bleed-over of GM crops" (see above post) is - as madchemist rightly claimed - "absurdly false" because you wouldn't have sprayed it with glyphosate in the first place otherwise!! Madchemists was NOT talking about 'volunteers' or 'edging', he was talking about the actual CROPS being grown and sprayed. It may be hard to understand to someone who is not familiar with crop-growing practices, but trust me, madchemists is 100% correct.

  • Report this Comment On December 08, 2009, at 3:33 PM, madchemists wrote:

    FairMarketFarmer

    I can assure you Monsanto does NOT control 90% of the soybean market and 70% of the corn market. Do you really think that DuPont (mainly Pioneer brand) Syngenta, and DAS would be able to survive splitting 10% of the bean market and 30% of the corn market?

    It is true that those percentages are probably true for the %s of GMO seed planted, but that's because farmers but those seeds. Try to buy some non-hybrid corn of any variety and see what you can find. The reason==hybrids are better. Same for GMO

  • Report this Comment On December 08, 2009, at 8:44 PM, funfundvierzig wrote:

    Nothing throws the klieg lights on the inferiority of DuPont's bitter and defencive Management with their BENLATE-style agricultural ethics like the serial successes of Monsanto!

    Thank God for a free market place, where farmers can chose and vote with their purchase dollars.

    ...funfun..

  • Report this Comment On December 09, 2009, at 1:12 PM, FairMarketFarmer wrote:

    For anyone interested in seeing how the concentration of the seed industry is effecting farmers, please see the new report "Out of Hand" by the Farmer to Farmer Campaign at http://farmertofarmercampaign.com/

  • Report this Comment On December 10, 2009, at 7:21 AM, funfundvierzig wrote:

    "Farmer To Farmer"?? What a laugh! Who's bankrolling this slick PR attack on the unquestioned innovative industry leader, Monsanto? Funny thing, this shadowy group provides no information.

    Fact is the seed business is highly competitive and the executives of a least one of the BIG LOSERS is going to enormous lengths to blow up a huge smokescreen to conceal their serial failures and ineptness!

    ...funfun..

  • Report this Comment On December 10, 2009, at 2:40 PM, jjdoublej wrote:

    Monsanto has brought more to farming than any other company. Monsanto has farmers who love them (love the technology and understand the profitability it brings), and those that dont (love and use the technology, but think the seed price per bag is the bottom line, and dont look at profit per acre). Pioneer isnt succeeding (now wont put optimum products out until middle of the next decade) because they are preoccupied with spinning reasons to the growers why Monsanto technology is bad.

  • Report this Comment On December 10, 2009, at 2:44 PM, jjdoublej wrote:

    What is funny is people think that Monsanto wants to "control food". ridiculous! They have created and SHARED their technology with hundreds of seed companies through licensing. If they wanted to control the industry, they could've just kept the technology that THEY created for only their seed brands.

  • Report this Comment On December 13, 2009, at 6:51 PM, RLAprof wrote:

    Yes, I know this is from a left-wing, liberal website, but it is not based upon their own research:

    http://www.huffingtonpost.com/2009/12/13/monsanto-squeezes-o...

  • Report this Comment On December 14, 2009, at 10:07 AM, troyc71 wrote:

    That article is chock full of inaccuracies - the typical result of 'journalism' done by someone who #1 - has an agenda to begin with, and #2 has NO concept of agricultural practices ar how crops are actually grown.

    I also have to wonder - like my post above regarding Food Inc - how these journalists & filmmakers would react to their work being plagiarized/pirated. These hypocrites fiercely protect their copyrights, but scream when a company like Monsanto protects their patent.

    The bottom line is that competition is there. Bayer has their LL trait in soybeans, Dow has their Herculex traits in corn, Syngenta has their Vip traits - and if they bring them forward in a germplasm that yields - they sell. If you don't like Monsanto's Roundup Ready crops then buy and plant Liberty Link crops! If you don't want to plant GMO crops at all, then buy non-GMO crops. Yes, there are fewer non-GMO options available these days - because they DON"T YIELD AS WELL.

  • Report this Comment On December 14, 2009, at 11:33 AM, FairMarketFarmer wrote:

    Re: troyc71....

    First, how can you say that this is phony journalism, when its a reporter from the Associated Press. I trust you've heard of it? This isn't some blogger we're talking about.

    Second, as the reporter notes... "One contract gave an independent seed company deep discounts if the company ensured that Monsanto's products would make up 70 percent of its total corn seed inventory." This isn't fair competition if there's only 30% of sales available for LL, conventional, etc as you mention. If they're too big to fail, they're too big.

  • Report this Comment On December 14, 2009, at 1:28 PM, troyc71 wrote:

    I didn't say "phony journalism", is said "chock full of inaccuracies". Such as:

    "We now believe that Monsanto has control over as much as 90 percent of (seed genetics)." - Patently false. The existence of Pioneer alone destroys that statement, wothout even considering other seed companies.

    "Back in the 1970s, public universities developed new traits for corn and soybean seeds that made them grow hardy and resist pests. Small seed companies got the traits cheaply and could blend them to breed superior crops without restriction." - Patently false. No traits were approved for use in corn and soybeans before Roundup Ready in 1996.

    There are others, but you get the point. It is clear to me that the reporter had an agenda to begin with, along with zero knowledge of crop farming practices.

    As for your other complaint - so what? Monsanto offers discounts if a company will sell a certain % of Monsanto products. The choices: #1) Take the discounts and sell 70% Monsanto products, #2) Don't take the discounts and sell whatever % of whomever's products you want to sell, #3) Tell Monsanto goodbye and sell only competitor products. (Dow/Syngenta/Pioneer/one of dozens of smaller companies/etc.).

    By the way, should Monsanto have just kept their traits for themselves and not licensed them out to other companies? Would that have been 'fair'?

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