Lawn- and garden-care firm Scotts (NYSE:SMG) is exploring whether "the grass is always greener after a few genetic modifications." Since at least 2002, Scotts has been investigating a new form of genetically engineered creeping bentgrass, a turf commonly found on golf course greens and fairways.
The "Roundup Ready" grass, which is marketed by Scotts and produced by Monsanto (NYSE:MON), is designed to be resistant to the Roundup herbicide. The hope is that golf courses using the grass will be able to spray Roundup freely, leaving fairway and green grass unscathed, while killing offending weeds. The same concept is behind Monsanto's Roundup Ready crop offerings.
I have to applaud Scotts' ingenuity, but I can't help but think the company is barking up the wrong tree. The new grass has already elicited predictable protest from environmental groups that oppose all bioengineered products. More significantly, though, the U.S. Bureau of Land Management, the Forest Service, as well as Oregon and California state agencies and officials from the U.S. Army Corps of Engineers have expressed concerns about the grass.
Specifically, government authorities are worried that the grass will spread, drive out native plants, and be difficult to control due to its Roundup resistance. So-called "invasive species" have radically altered ecosystems in the past, and officials wonder if "Roundup Ready" grass has the potential to wreak similar havoc. In its defense, Scotts asserts that the grass will be cut too short to flower and spread, and that it will be susceptible to other herbicides.
The fact is, though, Scotts cannot guarantee that every golf course superintendent will keep all grass consistently short enough to prevent flowering. And Scotts admits that conventional creeping bentgrass sometimes shows up as a weed in turf. After all, one man's grass is another man's weed, and weeds -- unlike conventional crops -- are very good at spreading.
Sure, a different herbicide could be used to kill the new grass in the event it proliferates. But if it manages to take root in an environmentally sensitive area, wildlife authorities would be presented with the unpalatable choice of killing the Roundup Ready grass along with other plants in the impacted zone, or simply giving up and letting the grass flourish. It's hard to believe this scenario hasn't crossed the minds of officials at the Animal and Plant Health Inspection Service, which has the final say on whether the new grass is approved for sale.
For now, Scotts is proceeding with its studies. In this case, though, I wonder if the company may have been too clever for its own good.
Tom Gardner loves uncovering small, undervalued companies in Motley Fool Hidden Gems. To learn more about the newsletter, or to take a free, 30-day trial, just click here.
Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.
