Unlike Roundup Ready crops that can withstand an application of the powerful herbicide and continue growing because seed giant Monsanto (NYSE:MON) has altered their genetic code, the so-called Monsanto Protection Act that President Obama signed into law earlier this year is set to wither on the vine.
Despite large and vocal opposition, Congress attached the provision at the last minute to a continuing spending resolution that was designed as a stop-gap measure to keep the government running. While the bill is pernicious in that it allows Monsanto to continue selling genetically modified seeds that are deemed harmful by limiting a judge's ability to halt their sale to farmers who can also continue growing crops with them, it had a six-month sunset provision in it, and the sun goes down on the law at the end of the month.
In the current debate over whether and how to fund the government, the House of Representatives attached an extension of the law, but the Senate had it stripped out. As of Sept. 30, Monsanto will no longer have its federally guaranteed protection, and the situation will return to its prior position, where the USDA will have to complete environmental impact statements assessing risk before the sale and planting of GMO seed.
Not that the status quo is much better. Opponents of GM alfalfa, for example, warned of the risks such crops would pose to organic feed that's fed to cattle and hogs or to exports if there's contamination. The Agriculture Department approved it anyway, and just a few weeks ago we saw the fallout: A Washington farmer saw his supposedly organic alfalfa hay rejected for export by a broker because it was found to be contaminated with the Roundup Ready trait.
Interestingly, because alfalfa grows so thickly that it crowds out weeds naturally, it doesn't even need to be "weed resistant," which is why the FDA has found that only a tiny percentage of growers even spray their crop with an herbicide, Roundup or otherwise.
And, of course, Monsanto's Roundup Ready wheat strain -- supposedly destroyed years ago except for the small amount the government theoretically has under lock and key -- nearly brought the industry to its knees when it suddenly appeared out of nowhere.
Although the law was dubbed the Monsanto Protection Act, in no small part because the bill's sponsor, Sen. Roy Blount (R-Mo.), admitted that he consulted with the chemical giant to craft the precise wording of it, it also protected the other seed GM seed makers, including Syngenta, Dow Chemical, DuPont, and Bayer.
The rationale behind the bill was that if a farmer bought seed from Dow that had been modified with a trait from Monsanto or Syngenta and planted the crop in good faith, believing it was safe to do so at the time because the USDA had allowed it, then they shouldn't be penalized if a judge ruled after the fact that the seed was dangerous and refused to permit the farmer from planting or harvesting it.
Yes, because that's just how other regulatory agencies handle dangerous situations in their fields. When the weight-loss drug fen-phen was found to create serious, potentially deadly heart problems, the FDA just let it stay out there because Wyeth and other pharmas had sold the drugs in good faith, right? The Consumer Products Safety Commission lets faulty drop-side cribs remain on sale at Toys R Us even though infants are at heightened risk of suffocation and death, correct?
Er, no. The regulatory agencies have them pulled from store shelves pronto.
Monsanto and the other seed companies wanted the law enacted because numerous courts have ruled that the USDA violated federal law by approving various genetically modified crops -- actually, it's never not approved one -- but never considering the potential harm the GM crops would cause, as it's mandated to do.
Because the courts generally barred the sale or planting of those illegally approved seeds, the Monsanto Protection Act said notwithstanding the courts' rulings, the Secretary of Agriculture would automatically grant Monsanto and others an immediate waiver to continue selling the seed and permit farmers to grow and harvest them.
Thankfully, the sun is setting on this latest skirmish, but the war's not over, and future battles are still to be fought. Yet perhaps the invincible armor of Monsanto has finally shown a chink.
Fool contributor Rich Duprey and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.