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Hooray for Stalemates!

By Brian Orelli, PhD – Updated Apr 6, 2017 at 1:49AM

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Government deadlock will likely bring more genetically engineered seeds to the EU.

Sure, an all-out approval would have been nice, but the end result will likely be good enough for Syngenta (NYSE:SYT), DuPont (NYSE:DD), and Dow Chemical (NYSE:DOW).

The European Union environment ministers locked horns yesterday about whether to allow farmers to plant the companies' genetically modified corn, but it couldn't come to a decision. In the event of a stalemate, the EU commission has the right to make a unilateral decision. Since the executive branch of the EU has already recommended approval of Syngenta's Bt-11 and 1507 from subsidiaries of DuPont and Dow, an eventual approval seems likely.

Monsanto (NYSE:MON) has had the European market all to itself for the last 10 years, but the company is probably not too upset about the potential for added competition for its MON 810 corn. The market for genetically modified corn is relatively small; biotech corn is planted on about 0.2% of cornfields in Germany, for example. Increasing the number of options for farmers could increase awareness about the safety of genetically modified plants. Also, Monsanto has plenty of other biotech crops that I'm sure it would love to bring to market in the EU, so additional approvals -- even if they come through a bureaucratic back door -- should give investors hope that the company can expand its possibilities here.

That effort won't be easy, though. France and Greece circumvented EU rulings to ban biotech crops within their borders, and some German ministers have also called for a ban. The EU may be able to get its member states back in line eventually, but until then, those countries are off-limits.

The biotech agriculture business has an uphill battle in the EU, but at least it's got one foot in the door.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

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E. I. du Pont de Nemours and Company Stock Quote
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