Why Does Everyone Hate Monsanto?

The Associated Press ran an article chastising Monsanto (NYSE: MON  ) over the weekend. And reran it again on Monday. You know, to really make it sting.

While the article paints Monsanto as a rather mean company -- the agriculture giant even felt the need to issue a press release to respond -- I'm not sure investors should care. Perhaps they should even be smiling a little. The shrewd business practices are exactly what you'd want from a good investment.

Monsanto has become the giant that it is by licensing its gene traits to other seed companies. Is it ruthless in those negotiations? Absolutely, but that's what we'd expect from a company protecting its intellectual property. No one is forcing small seed companies to license the traits. They want to because Monsanto has useful traits like Roundup Ready that farmers want. Better products cost more.

The Associated Press and DuPont (NYSE: DD  ) take issue with Monsanto using its licenses to limit competitors' traits that can be combined with Monsanto's traits. But again, it's Monsanto's intellectual property. The company has swapped licenses and combined traits with Dow Chemical (NYSE: DOW  ) and Syngenta (NYSE: SYT  ) when it's to its advantage. We don't force Pfizer (NYSE: PFE  ) and Merck (NYSE: MRK  ) to combine their cholesterol-lowering drugs, why would Monsanto want to combine traits if it wasn't in the best interest of the company?

Of course, one man's shrewd business practices are another man's antitrust violations. The Department of Justice is investigating the company and investors should factor that into their valuation. Still, it's not like Netscape took out Microsoft (Nasdaq: MSFT  ) even with regulators help.

You're free to hate Monsanto and refuse to invest in the company -- socially responsible investing and all. But you're missing a dominant company with a nice moat. The kind Buffett loves.

Socially responsible definitely isn't one of the 10 reasons Jim Mueller likes this stock.

Monsanto, Microsoft, and Pfizer are Motley Fool Inside Value picks. If you're interested in picking through the wreckage for possible turnaround candidates, you should have the Inside Value team on your side. Check it out for free with a 30-day trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Syngenta is a Motley Fool Global Gains selection. Microsoft is a Motley Fool Options recommendation. The Fool has a disclosure policy.


Read/Post Comments (17) | Recommend This Article (20)

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 15, 2009, at 5:42 PM, funfundvierzig wrote:

    DuPont's stumbling bosses and their massive PR machinery have blown up a big smokescreen to hide their first flopping attempt to come up with a genetically modified seed to compete with the clear frontrunner, superior-managed Monsanto, parodically called OptimumGAP. For years, they and their sneaky lobbyists have been waging a smear campaign claiming dishonestly Monsanto is a mean ole monopoly, and DuPont is a helpless "victim"!

    What a laugh. Does Monsanto have saber to the throat of hundreds of thousands of farmers around the world, forcing them to buy Monsanto's superior yielding products? Nah, they buy Monsanto to make money, while they also have choice of traits provided by Syngenta, or Dow AgroSciences or Bayer or numerous smaller producers, or the discount seeds from the rather ordinary line-up of DuPont Pioneer. ...funfun..

  • Report this Comment On December 15, 2009, at 7:47 PM, jrusso9722 wrote:

    I remember, at least 25 years ago, when Monsanto was investing it's money to buy gene libraries, etc. I have not studied Monsanto, or claim to be an expert, but, I have no problem with them, and I believe if you work for your money, you deserve it. Intellectual property is not well recognized or understood by many in the investment world, but, let it be known that it is the utmost in capitalization and shareholder value. Monsanto paid it's dues, and it deserves the harvest.

  • Report this Comment On December 15, 2009, at 10:54 PM, jimmypeppers wrote:

    Watch the documentary "Food, Inc." Monsanto epitomizes all things bad about corporations in America. It may be a well run and extremely profitable business, but there are things in life more important than money.

  • Report this Comment On December 16, 2009, at 7:36 AM, jrusso9722 wrote:

    I hope that show "Food, Inc." comes on my Verizon service, I would love to see it. It's true, Corporations have the power to help, and the power to hurt society.

  • Report this Comment On December 16, 2009, at 7:42 AM, Fool wrote:

    There are things more important than your investment money, but when it comes to my investment money, I want a kick a&& management team devoted to shareholder value. Tough, shrewd but legal and ethical is all I ask. Thats how you stay on top and lessers will always complain. If you have a choice between a co like Goldman who gorges top management with bonuses when they almost went out of business vs a company that it's competitors hate because they are tough...

  • Report this Comment On December 16, 2009, at 8:46 AM, Farmhound wrote:

    Food Inc? A movie of lies and exagerations made to scare the public and thus create interest so people might see the move, for profit? Please. I am a stock holder of MON and want them to make as much profit as possible. Oh and the side benefit is they will continue to lead the research making it possible to feed the world.

  • Report this Comment On December 16, 2009, at 12:58 PM, jjdoublej wrote:

    Some people dislike Monsanto because they make money and they are a corporation. Some Farmers dont like monsanto because they think Monsanto charges too much....what many wont say is that Monsanto makes the farmer the most profitable. Some consumers dont like Monsanto because they read CRAP on the internet that isnt true, and take it as gospel.

  • Report this Comment On December 17, 2009, at 1:19 PM, Fool wrote:

    It can't be good for the world to allow 1 company to control the entire seed industry. watch "foodinc" and listen to what the farmers are saying, particularly of importance is the gag order.

  • Report this Comment On December 17, 2009, at 1:33 PM, Chokko1954 wrote:

    Food Inc? A movie of lies and exagerations made to scare the public and thus create interest so people might see the move, for profit? Please. I am a stock holder of MON and want them to make as much profit as possible. Oh and the side benefit is they will continue to lead the research making it possible to feed the world.

    This was written by a guy who watches FOX news and believes all their lies,exagerations, scare tactics and half truthes.............

  • Report this Comment On December 17, 2009, at 4:28 PM, troyc71 wrote:

    Fool: I have posted this before in other threads - it bears repeating. I have tried watching Food, Inc and 'The World According to Monsanto' online - but I can't. Why, you ask? Because the videos have been taken down due to COPYRIGHT INFRINGEMENT! Now, how hypocritical is it to condemn Monsanto for enforcing it's patents and protecting it's investments in a movie that is protected by an enforced copyright?! It is utterly ridiculous for a documentary filmmaker to condemn a company for protecting its investment and then put an FBI warning at the beginning of his film to protect against copyright violation!

    And - "control the entire seed industry"? Good grief. Do just a little basic homework before making easily disprovable statements. Pioneer slightly leads Monsanto in soybean seed market share in the US and is roughly equal to Monsanto in corn seed market share. That *one company alone* destroys the silly accusation that Monsanto controls the entire seed industry.

  • Report this Comment On December 21, 2009, at 10:00 AM, jimmypeppers wrote:

    The Fox 'news' righties will debunk everything in Food, Inc. and the lefties will buy it all. Hopefully there are some people remaining in the middle who still have an open mind and will neither dismiss everything or believe everything. If you are either buying it all or dismissing it all you are being a sucker.

    For me, I buy enough of it to put my money elsewhere. I don't think that makes me a naive idiot or a pinko freak. The title of the article was "Why Does Everybody Hate Monsanto?" I was answering the question.

  • Report this Comment On December 21, 2009, at 10:04 AM, troyc71 wrote:

    "For me, I buy enough of it to put my money elsewhere."

    So, what part of it do you 'buy' that bothers you about MON so much?

  • Report this Comment On April 29, 2010, at 2:46 PM, tblakeslee wrote:

    Big problem: Roundup is turning out to be a disaster that kills the very important critters that make up good soil. Also having one genetic crop being grown worldwide has caused superweeds to develop and super insects to evolve. The result: lots of sales of more chemicals. This is an evil company, though much of the evil was unintentional. If you liked tobaco companies, you'll love this one. Here is an interview with a researcher that you should read:

    http://www.non-gmoreport.com/articles/jan10/scientists_find_...

  • Report this Comment On March 17, 2011, at 2:29 PM, Arydberg wrote:

    These people have put aspartame on the market and unleashed a firestorm of protests. They have put Neotame in over 1000 of out foods without even listing it on the label.

    There is a real possibility that their GM modified seeds will cause huge long term harm.

    Our system is supposed to make up for short term suffering by providing better and longer lasting goods and services in the long run. Monsanto does not do this. Their profits come at a cost to many millions in terms of poor health.

    ps. netflix has see Food Inc. You can get it on a free trial.

  • Report this Comment On December 28, 2011, at 12:02 AM, Bob1232 wrote:

    Are you kidding me? This company is the scum of the earth and is jeapordizing billions of years of evolution with its cowboy mentality. Horrible people doing humanity a huge injustice.

  • Report this Comment On February 11, 2012, at 5:08 PM, Sage818 wrote:

    As much as I love making money I just can't support Monsanto and their approach. My Uncle's are corn farmers in Indiana. I know some folks mentioned that farmers are making money from Monsanto GMO seed - yeah kind-of. IF you are a huge mega farmer yes the Monsanto model can work. If your mid sized (under 200 acres) its a break even at best. For small farmers its nothing more than indentured servitude under an increasingly parasitic relationship. My family already can see the weeds and bugs have out smarted "round-up" so now more/stronger chemicals that all end up in our ground water.

    RoundUp is good at killing -- does it know to stop when its in our water??

  • Report this Comment On May 02, 2012, at 9:44 AM, H8MONSANTO wrote:

    I HATE monsanto! The Vermont Right to Know Genetically Modified Food Act (H.722) passed by the State House Agriculture Committee on April 20th. Overwhelming popular support has carried the bill forward to widespread jubilation with that vote. And then.... nothing. Monsanto made it known that they would sue the State of Vermont if the bill were passed and the Governor of Vermont made it clear that he was not prepared to sign a law that would lead to a crippling lawsuit by Monsanto.

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