The Monsanto samba
Brazil's congress voted to legalize genetically modified (GM) crops yesterday. President Luiz Inacio "Lula" da Silva still has to approve the legislation before it can go into effect; there's little doubt he will, despite Greenpeace's best efforts.
Brazil's official capitulation is big news for Monsanto. As most BGJ readers know by now, the agri-giant's Round Up Ready seeds already control about a third of Brazil's fast-growing soy output. Farmers have been buying Roundup Ready seeds for years on the black market. The new law will grant the agri-giant legal standing to enforce intellectual property rights claims on farmers whose soybeans can be shown to be genetically identical to Roundup Ready, whether through illicit buying on the black market or cross-pollination.
The windfall could be huge and ongoing. As the AP put it Thursday, "Brazil is second only to the United States in soy production, but easily has the potential to become the world's largest soy producer because of cheap land, low labor costs and plentiful water."
Monsanto saw its stock nudge up nearly 1 percent on the news Thursday. That's a pretty modest rally, but then, part of the reason the stock has risen so steadily over the past year is that investors have been factoring in Brazil's surrender to GM crops.
The company immediately repaid the favor, announcing Thursday afternoon that its Brazil unit would spend $20 million over the next few years to conjure a soy seed containing an insectide to combat specific domestic pests.
"The new soybean variety would employ techniques already used in new varieties of corn and cotton that have genes from the Bacillus thuringiensis, or Bt, bacteria, which produces a natural toxin to kill bugs that feed on crops," Reuters reported Thursday.
That's Bt soy, right in the middle of one of the world's richest wildlife areas.
Same old story. Farmers and government officials sell out to agribusiness in hopes of creating higher yields. When the bumper crop arrives, prices drop, and the buyers--those same agribusiness firms--score a windfall. Farmers then fall into despair (see this post), and all sorts of environmental and social damage piles up. All the while, over on Wall Street, they're bidding up the share prices of the agri-stocks.
Meanwhile, government officials and Monsanto execs in Argentina are rubbing their hands together at the prospect a corn seed that contains both the Bt and Roundup Ready functions.
Brazil's official capitulation is big news for Monsanto. As most BGJ readers know by now, the agri-giant's Round Up Ready seeds already control about a third of Brazil's fast-growing soy output. Farmers have been buying Roundup Ready seeds for years on the black market. The new law will grant the agri-giant legal standing to enforce intellectual property rights claims on farmers whose soybeans can be shown to be genetically identical to Roundup Ready, whether through illicit buying on the black market or cross-pollination.
The windfall could be huge and ongoing. As the AP put it Thursday, "Brazil is second only to the United States in soy production, but easily has the potential to become the world's largest soy producer because of cheap land, low labor costs and plentiful water."
Monsanto saw its stock nudge up nearly 1 percent on the news Thursday. That's a pretty modest rally, but then, part of the reason the stock has risen so steadily over the past year is that investors have been factoring in Brazil's surrender to GM crops.
The company immediately repaid the favor, announcing Thursday afternoon that its Brazil unit would spend $20 million over the next few years to conjure a soy seed containing an insectide to combat specific domestic pests.
"The new soybean variety would employ techniques already used in new varieties of corn and cotton that have genes from the Bacillus thuringiensis, or Bt, bacteria, which produces a natural toxin to kill bugs that feed on crops," Reuters reported Thursday.
That's Bt soy, right in the middle of one of the world's richest wildlife areas.
Same old story. Farmers and government officials sell out to agribusiness in hopes of creating higher yields. When the bumper crop arrives, prices drop, and the buyers--those same agribusiness firms--score a windfall. Farmers then fall into despair (see this post), and all sorts of environmental and social damage piles up. All the while, over on Wall Street, they're bidding up the share prices of the agri-stocks.
Meanwhile, government officials and Monsanto execs in Argentina are rubbing their hands together at the prospect a corn seed that contains both the Bt and Roundup Ready functions.
posted by Tom Philpott at 6:57 AM
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