*Hopefully, Monsanto is doomed. I hope it isnt too late, that their damage can be undone.*
Pioneer Hi-Bred on Friday called rival seed company Monsanto an “overwhelming monopoly” and said it had “encouraged the U.S. Departments of Agriculture and Justice to examine the current state of ag biotech competition and take appropriate action to restore a competitive environment.”
In comments to the two Cabinet departments, Pioneer said Monsanto uses its shares of the soybean and corn biotech trait markets – 98 percent and 78 percent shares, respectively – to act as a “bottleneck” to competition and innovation.
Monsanto, in its own filings with the government, said that farmers can purchase seed from more than 20 companies, and it noted that “traits are only a part of the total value of the seed, which is why there is substantial competition and variation in price even among seeds that contain the same trait combination.”
The two companies’ filings are in preparation for a March 12 hearing in Ankeny sponsored by the USDA and the Justice Department on competition in the seed industry.
Monsanto has achieved its market share through its ownership of DeKalb, Asgrow and other seed companies and use of genetic traits that enable seeds to resist Monsanto’s popular Roundup glyphosate herbicide.
Pioneer, like other seed companies, has licensed the Roundup Ready technology in its own seeds. It has committed to pay $725 million in licensing fees to Monsanto from 2007 to 2015 for Roundup Ready, which goes off patent in 2014.
But last year, Monsanto sued Pioneer over Pioneer’s stated plans to combine Roundup Ready with its own traits in Pioneer’s planned Optimum soybean series to be introduced sometime after 2012.
“Monsanto’s license agreements prevent seed companies from combining different characteristics in a single seed (often referred to as ‘stacking’), including both Monsanto and non-Monsanto technology,” Pioneer’s comments assert.
“These restrictions deny farmers the choice of the best seeds to suit their needs and force Monsanto customers to rely solely on Monsanto technology,” Pioneer said.
Monsanto’s filings paint itself as the early adapter to biotech while unnamed competitors stood still.
“Between 1980 and 1996, Monsanto invested approximately $1.5 billion in biotech research and development to improve weed and insect control. During the same period, our competitors invested $15 billion in the development of pesticide chemistry – they largely ignored biotech,” Monsanto said.
While Monsanto is alleged to have overwhelming shares of the seed biotech markets, its share of the actual seed sales market is narrower. Widely used figures for 2009 show that it was the top seller of corn seeds, with a 36 percent margin to Pioneer’s 32 percent.
In soybeans, Monsanto has acknowledged that Pioneer has a larger market share, with each company having less than 30 percent of the North American market.
Said Monsanto: “No single company has a dominant share of seed sales in corn, soybean or cotton. Independent seed companies, numbering in the hundreds, have held their own and have significant share in corn, soybeans and cotton.”
Pioneer says “consumers pay more when a single company controls access to innovation,” and quotes a recent study by the American Antitrust Association that it said “demonstrated that price increases (for seeds) in this decade for Monsanto’s traits have exceeded the additional benefits they convey.”
Pioneer has filed its own antitrust lawsuit against Monsanto and its attorneys, led by the same man, David Boies, who led the U.S. Justice Department’s antitrust prosecution of Microsoft a decade ago.
Pioneer claims that Monsanto is using Roundup Ready biotech traits in a manner similar to the way Microsoft was alleged to have used its Windows operating system to squelch competition on computer desktops.
Heidi-Lore's Musings 