Warning: Hating Monsanto Impedes Global Economic Growth

Misconceptions about agricultural biotechnology cost this Zambian his crop -- and thousands of lives -- during a major drought. Source: Richard Lord / UMCOR

Monsanto (MON) attracts quite a bit of criticism for its transgenic crops and seeds, more commonly referred to as Genetically Modified Organisms, or GMOs. The agricultural pioneer has introduced several engineered products aimed at reducing the amount of pesticides, herbicides, and time required during the planting season. In fact, corn and cotton crops that contain genes to produce toxins created from a naturally occurring soil bacterium, Bacillus thuringiensis, have saved farmers $57 billion in pesticide costs from 1996 to 2011.

Yet despite mountains of scientific and economic evidence pointing to the benefits of transgenic crops, many people in the United States and Europe are vehemently opposed to their use and consumption. Public pressure has even led to the creation of state and national mandates, whether they are pending or already passed as law. That is a luxury when you're surrounded by food 24/7. Sadly, this popular and misguided view of agricultural biotechnology compromises the assimilation of genetically modified foods in African countries. It influences international trade and humanitarian aid, thereby stunting economic growth for the world's poorest people. More worrisome: it costs lives.

The West vs. The Rest
In 2001 and 2002, a major drought struck Zambia and Malawi, which caused a food shortage for over three million people. When the international community contributed over $600 million to minimize the social and economic costs of the impending humanitarian crisis Zambian President Levy Mwanawasa rejected American corn for his people, labeling it "poison" for its transgenic properties. While country officials claim no lives were lost in the debacle, official reports show only 11% of food supplies were successfully delivered to citizens in the seven months after an emergency was declared.

President Mwanawasa's negative and misinformed opinion on GMOs was likely influenced by the strict standards of European trading partners. You can browse through the list of all transgenic crops approved by the European Commission, but the grand majority of products from Monsanto, Pioneer, Syngenta (NYSE: SYT), Dow Chemical (DOW), and BASF (BASFY -0.15%) are approved for animal feed only. Given the strength of trading partners to the north and the importance of agriculture to African countries, there is little economic incentive to import, export, or trade in transgenic crops -- even if they can save lives at home.

Worse yet, Europe imposes such strict regulations despite its own findings. In a 2009 report (link opens PDF) conducted by the Union's Federal Office of Consumer Protection and Food Safety titled Long-term Effects of Genetically Modified (GM) Crops on Health and the Environment, researchers concluded:

In more than 20 years of experimental field releases and more than 10 years of commercial cultivation, adverse long-term effects reported in the scientific literature concern (i) the development of resistance in Bt crop target organisms and (ii) tolerance in weeds to complementary herbicides used in (herbicide tolerant) crops. No other long-term effects have yet been established.

It's worth noting that cases of weed and pest resistance are occurring in isolated geographic regions -- and farmers abusing the advantages of biotechnology are likely the culprits. That being said, the conclusion above is an awfully empty defense of the asserted health risks posed by GMOs, especially when it results in the loss of lives and economic potential of those who can benefit the most.

Take a look at the importance of agriculture in several African economies:

Source: CIA World Factbook *includes forestry and fishing

Let's be clear: there are many more issues plaguing the world's poorest nations: government corruption, pestilence, droughts, starvation, poor family planning, and more. While agriculture and food supplies are just a part of the equation, the industry has many positive feedbacks for these economies at a national level. African countries will continue to struggle to take the next step in economic development -- to more skilled industries -- as long as they struggle to feed their citizens and maximize their agricultural outputs -- a major source of livelihood. Biotechnology can expedite the process.

GMOs as an economic springboard
Fast forward a decade and Zambia is now participating in the United Nation's Millennium Village Project, which was developed to address the challenges of extreme poverty by encouraging the use of modern agriculture (high-yield seeds, proper irrigation techniques, and fertilizers), education, health care, and other social development directives. Villages are hosted in more than 20 African countries; including the four used in the GDP comparison above (France continues to ban transgenic corn -- easy to do when agriculture only contributes 2% to your top line.)

Think the advantages of biotechnology are fantasies? Think again, but don't take my word for it. Just take a look at data from the first Millennium Villages to implement high-yield crops:

Source: Common Wealth, Jefferey D. Sachs (adapted from Sanchez et al.)

To be fair, utilizing genetically modified seeds did not account for all of the production gains above. But while transgenic crops are more of an insurance policy -- against the list of things that could possibly go wrong each year -- for American farmers, they are a lifeline for African farmers and local economies. We can't weather-proof seeds (yet), but drought-resistance varieties are exponentially more valuable in Zambia than Iowa.

Foolish bottom line
Why can't agricultural biotechnology, with proven results and even greater potential to help the world, distance itself from the negative press? Employing teams of cutthroat lawyers that target the iconic American farmer when she strays from the industry's strict guidelines likely has a lot to do with it. But if we evaluate transgenic crop specialists on the heels of economic and scientific progress alone, it is difficult to argue against them.

So when anti-Monsanto sentiment leads to the passage of just one law banning or restricting the use of transgenic crops in your state, the impacts are felt oceans away. Such bans complicate trade policies and endanger economic growth and the lives of millions of people in the most impoverished nations. Remember that before leaving your thoughts in the comments section below.