December, 1999
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Monsanto is sued over genetically altered crops

December 15
Wall Street Journal

A group of class-action lawyers filed a suit against Monsanto Co., taking the growing controversy over bioengineered food into the courtroom. The suit, filed in federal district court in Washington, alleges that Monsanto didn't adequately test the safety of its genetically modified corn and soybean plants, and that the St. Louis company's patented genes are giving it too much control over how staple crops are used.

"Monsanto wants to dominate the entire food chain," said Michael D. Hausfeld, a high-profile litigator and senior partner at Cohen, Milstein, Hausfeld & Toll in Washington, which is leading the group of 10 law firms. Among other things, the antitrust suit claims that the way Monsanto licenses seed companies to use its genes gives it too much influence over the prices they charge farmers for genetically modified seed. The suit alleges that an internal Monsanto document in 1996 called the Maize Protection Business Plan "outlined a strategy to monopolize and restrain trade" of genetically modified seed. The document wasn't included in the filing.

Monsanto attacked the merits of the lawsuit, which was brought at the urging of antibiotechnology activist Jeremy Rifkin and supported by a coalition of populist farm groups long suspicious of corporate control of agriculture.

"These are outrageous allegations," said David Snively, assistant general counsel for Monsanto. "I don't have much doubt we will defeat this lawsuit."

Still, the lawsuit could be a big distraction for Monsanto, whose stock price is already depressed by fears of a backlash against biotechnology as a result of concern that genetically altering plants might have unintended consequences. Monsanto directors are debating whether to spin off its agricultural operations in order to free its highflying pharmaceuticals unit from the controversy.

Monsanto stock initially sank on news of the suit, then slowly recovered through the trading session. In 4 p.m. trading on the New York Stock Exchange, Monsanto shares closed at $41.875, down 12.5 cents.

Mr. Hausfeld, who helped win a $1.17 billion civil settlement in November from vitamin makers accused of fixing prices, said he will seek unspecified damages from Monsanto for the tens of thousands of farmers who have bought genetically modified seed during the past four years. The suit claims, among other things, that the farmers paid too much for the seed.

Activists hope the lawsuit gives them a high-profile stage to air their complaints against bioengineered foods, arguments that U.S. regulators from the Food and Drug Administration to the Justice Department have largely rejected. The fight over crop biotechnology so far has mostly revolved around Europe's import restrictions on genetically modified crops from the U.S.

It is far from clear, however, how much support the lawsuit has from within the U.S. farming community. After all, many farmers raced to embrace Monsanto's tough crops, because they stand up to bugs and herbicides better than conventional plants. Seeds containing a Monsanto gene were planted on 68.5 million acres in North America this year.

Several of the biggest U.S. farm organizations, including the National Farmers Union, American Soybean Association and American Farm Bureau Federation, said they aren't participating in the suit. "This {lawsuit} doesn't represent mainstream farmers," said Paul Bertels, director of production at the National Corn Growers Association.

Mr. Hausfeld, 53 years old, one of Washington's most prodigious litigators, said his firm spent millions of dollars in the past year preparing the 67-page lawsuit against Monsanto. Mr. Hausfeld said the fees he and his fellow lawyers can collect for their work are contingent on winning the suit. He has also been involved in antitrust suits against the makers of everything from baby formula to sugar, corrugated boxes and perfume. Currently, he is representing former Nazi forced laborers seeking billions in compensation.

Monsanto, which has had the most success so far with crop biotechnology, is the only company being sued. Several other companies with biotechnology businesses, including DuPont Co., Dow Chemical Co., Novartis AG and AstraZeneca PLC, are accused in the suit of being co-conspirators in a "global cartel" with Monsanto.

The suit alleges that Monsanto coordinated the pricing strategy of some of its biotech competitors by, among other things, giving them access to its most valuable genes. The Monsanto genes can make a plant resistant to certain bugs or give it immunity to Monsanto's Roundup herbicide.

To get the Monsanto genes, according to the suit, the companies had to agree to charge farmers a uniform price for those traits. Indeed, most U.S. farmers paid a $6.50 premium this year for a bag of soybeans containing the Roundup-tolerant trait, regardless of which brand of seed they bought. 

Most farmers have had to sign "grower licenses" in order to plant seeds containing Monsanto genes, which the suit claims have an anticompetitive purpose. Under terms of these licenses, farmers who planted Roundup-tolerant soybean plants can't save any of the harvest for replanting as seed next year. Saving the seed would deprive Monsanto of future sales.

Until recently, many of these farmers also had to agree only to use Roundup brand weedkiller on their soybean crop instead of competing brands. Monsanto said the grower licenses are designed to prevent misuse of its patented genes and to insure that only appropriate herbicides are used on crops containing its genes.

U.S. groups to sue Monsanto over biotech crops

December 14
Reuters

A U.S. family farm group and a longtime critic of biotechnology plans to sue Monsanto Co. on Tuesday for allegedly selling genetically altered crops without first ensuring they were safe for consumers and the environment.

The class action lawsuit, to be filed in federal court in Washington, will try to stop industry leader Monsanto from adding genes to give soybeans, corn, squash, canola and other plants resistance to pests and herbicides.

Monsanto said its products are safe and any lawsuit was unfounded. The case comes at a time when Americans have begun to express some uneasiness about the rapid increase in transgenic crops and the snack foods, salad dressings, baked goods and snacks made from them.

On Monday, the Food and Drug Administration held the last in a series of meetings to hear what changes -- if any -- are needed in how biotech foods are regulated and labeled.

The issue is also a priority in world trade talks. Japan, the European Union, South Korea and others have already moved ahead to require labels on foods made with transgenic crops to satisfy consumer worries about long-term health and safety.

``This lawsuit alleges that the company had a responsibility to make sure that any safety representations about the product were backed up,'' said Jeremy Rifkin, head of the Foundation on Economic Trends. 

For example, Monsanto should have done additional testing for Bt corn in other countries to determine if the crop posed any risks in other climates and soil types, he said.

``This lawsuit will refocus the global debate,'' Rifkin said. ``It puts the spotlight directly on the life science companies and the future of agriculture. It's no longer just a trade issue between the United States and the European Union.''

Rifkin is an environmental activist who has published several books about transgenic crops and has petitioned the FDA to impose stricter standards for testing and approval.

Also joining in the lawsuit is the National Family Farm Coalition, which represents U.S. growers with concerns about genetically modified crops. 

American farmers, who eagerly embraced biotech crops during the past three years, will spend the winter months deciding what seeds to buy for spring planting. Some are worried that conventional crops could command a premium over transgenic ones, reflecting the preference of overseas buyers. 

In 1999, half of the soybeans and one-third of corn grown by U.S. farmers were genetically modified varieties. 

The lawsuit will seek unspecified damages, which could amount to hundreds of millions of dollars, Rifkin said.

It will also accuse Monsanto of anti-competitive practices to control the patents and sale of altered seeds.

Green groups have been especially upset by the patenting of new biotech crops, which prohibits farmers from saving seeds from harvest and reusing them the next year.

Monsanto said it would fight the lawsuit.

``We're people who use these products, too. We're not going to introduce something into the market that is unsafe for families,'' said David Snively, an attorney for Monsanto.

Monsanto said it spent tens of millions of dollars and years to field test each new plant variety for safety.

Company scientists test how quickly the a modified plant is broken down inside an animal's stomach, whether the nutritional components have changed, and the impact on the environment.

Although fewer than a dozen companies dominate the development and sales of genetically altered seeds, there is fierce competition among them, Snively said.

``We're as competitive an industry as one can imagine,'' he said. ``Monsanto's products have had widespread acceptance in the marketplace because they have performed well.''

Farmers like the crops because they need fewer chemical pesticides and produce better yields and quality, he said.

In recent weeks, Monsanto has begun trying to build bridges with European environmentalists, who have been especially worried about long-term health and safety issues. Monsanto chairman Robert Shapiro pledged in October to discuss biotech crops with Greenpeace and others with a stake in the issue. The company is also pushing ahead with the next generation of altered crops engineered to benefit consumers.

Last week, Monsanto announced it had developed a genetically engineered rapeseed plant that could help the estimated 800 million people in Third World nations who suffer from blindness and other Vitamin A deficiency diseases.

But Rifkin said vitamin-enhanced crops could pose more problems. ``What are the repercussions for foraging birds, insects and other animals when they digest plants that are acting as pharmaceutical factories?'' Rifkin said. ``We just don't know.''

Farmers need not apologize for GM crops

Biotechnology a boon, not a bust 

December 15
Winnipeg Free Press column by farmer Dennis Rice

E VERY YEAR , farmers give tremendous thought to deciding what to grow in their fields. This year, however, that decision-making process has an added dimension: the question of genetically-modified (GM) crops. As a result of the recent negative publicity over biotechnology, many farmers are deciding not to plant GM crops at all. That decision is being met with glee by the green movement, which views GM crops as hideous products promoted by equally hideous corporations. As eco-crusader Pat Mooney notes on his organization's website: "Biotech is proselytizing chemically-dependent crops; marketing foods with the charm and half-life of Strontium 90; and offering octogenarians the shelf life of Tutankhamen."

Part of what motivates farmers to abandon GM crops is the belief that if they concede to the greens on this issue, the greens will subsequently leave them alone. Unfortunately, that isn't likely to happen. The green movement may simply set its sights on other products such as conventional farm pesticides, whose use many farmers presently take for granted. The Pesticide Action Network North America claims, "Pesticides are hazardous to human health and the environment, create resistant pest populations, contribute to declining crop yields, undermine local and global food security and threaten agricultural biodiversity." It is no coincidence that these arguments are identical to those leveled against agricultural biotechnology, clearly signalling that the fight over GM crops is only Round 1.

Farmers grow genetically modified crops for a fairly straightforward reason: They add to the productivity, and profitability, of their operations, a consideration of paramount importance in today's struggling farm economy. Contrary to green claims that GM crops are "drenched" with corporate chemicals, one of their main advantages is that they require fewer pesticides than conventional plant varieties. This cuts farmers' costs and, in fact, results in less stress on the environment. But what really enrages greens is that various corporations now hold patents on GM plant varieties. To pay for the expensive development costs, farmers using the seed have to enter into voluntary contracts with the patent holder, a situation that greens like to call techno-serfdom.

In reality though, genetically modified seeds no more shackle farmers to biotech companies than modern tractors shackle farmers to tractor producers, as opposed to the allegedly carefree days of farming with horses. Indeed, the arrival of the farm tractor long ago probably sparked similar fears of a loss of independence. After all, a horse's food was grown on the farm, and if you needed another horse all you had to do was breed one. Conversely, tractors could not easily be made by farmers, and if you bought one you were compelled to purchase repair parts from the manufacturer. Despite this, farmers willingly put away the horses and bought tractors in droves because of the productivity gains. The freedom to engage in such mutually beneficial agreements is central to our continuing prosperity, whether the trade involves farm inputs, biotechnology or any other product of our diverse economy.

If the greens win Round 1 over biotech, Round 2 will surely target crops grown with any synthetic fertilizers or conventional pesticides. But having farmers return to the crop production methods, and therefore the yields, of 50 years ago would not only threaten the world's food supply, it would also ravage the very ecosystem so precious to the greens by forcing farmers to plow down millions of square miles of wild habitat in a precarious attempt to maintain food production at current levels.

If we care about improving the quality of our lives and, indeed, about the legitimate needs of the environment, we need not be apologetic about the tremendous value that biotechnology creates. We should not allow that source of progress to be silenced with hysterical, unfounded claims and ill-considered prescriptions for change from latter-day Luddites.

Landmark action against Monsanto

December 14
BBC News Service

In what is believed to be the first legal challenge of its kind to the biotechnology industry, Monsanto and other companies are to face action in a US court.

A lawsuit alleges that Monsanto has formed a global cartel with "other biotech companies named as co-conspirators". It is brought by a legal consortium headed by a New York law firm, Cohen, Milstein, Hausfeld and Toll.

The firm has not so far named the other companies it is accusing of belonging to the alleged cartel.

'Landmark allegations'

It is arguing that the alleged cartel has "forced genetically-modified [GM] seeds onto the market at fixed prices without sufficient testing for safety to human health and the environment".

The lawsuit alleges "violations of US anti-trust law, public nuisance, deceptive trade practices and breach of implied warranty".

It also includes what the firm describes as "landmark allegations" that Monsanto "violated customary international law".

'Products safe' - Monsanto

Monsanto said it would fight the lawsuit.

"We're people who use these products, too. We're not going to introduce something into the market that is unsafe for families," said David Snively, an attorney for the company.

Monsanto said it spent tens of millions of dollars and years to field test each new plant variety for safety.

And although fewer than a dozen companies dominate the development and sales of GM seeds, there is fierce competition among them, Mr Snively said.

Treble damages

The consortium bringing the lawsuit is working with environment and development groups, including the National Family Farm Coalition and the Foundation on Economic Trends.

The lawsuit, to be filed in the US district court for the District of Columbia, is a class action, which means the plaintiffs will receive nothing if they lose. But it is thought likely to open the door to future legal action.

The plaintiffs say they are seeking "treble damages for anti-trust violations, compensatory and punitive damages, and injunctions compelling Monsanto to sufficiently test GM seeds and crops for human health and environmental safety, and an end to the operation of Monsanto's cartel".

Cohen, Milstein, Hausfeld and Toll have links with several foreign law firms, including the British legal practice Mishcon de Reya. BBC News Online has been told it is likely that the US lawsuit will lead to a similar action in the British courts.

Failure to regulate

Andrew Simms, of the London-based New Economics Foundation, told BBC News Online: "The World Trade Organization meeting in Seattle was chaos".

"That was because many people feel the world is being organized for a wealthy minority regardless of the consequences for anyone else. This lawsuit is evidence of that feeling.

"And regulation has not caught up with the reality of the global market place. Unless regulators do get to grips with it, people will be left to cope with anything that a handful of corporate cartels wishes to dump on them."

Monsanto survey says U.S. farmers back biotech

December 14
Reuters

St. Louis - Life sciences firm Monsanto Co. <MTC.N> said Tuesday that U.S. farmers would not turn away from biotech crops next year despite growing opposition to the technology in Europe and other parts of the world.

Monsanto, a leading producer of genetically modified corn, soybeans and cotton, said a recent survey of 2,000 U.S. growers showed that the number who intended to plant conventional seed varieties in 2000 had not changed significantly from 1999.

The company, which was named Tuesday in a lawsuit filed by biotech opponents, did not provide specific figures. But a Monsanto spokeswoman said about 26 percent of U.S. soybean growers surveyed said they planned not to use genetically modified seeds, little changed from last year's 25 percent.

Analysts have said farmers' planting decisions this spring will be critical to Monsanto, which generates a large portion of its profits from the genetically modified seeds. 

"Until the seeds are in the ground, it is hard to speculate what the market might look like, but we are already seeing solid evidence from surveys and grain trader announcements that indicate to us that the biotech growth trend will continue," Brett Begemann, vice president of U.S. markets for St. Louis-based Monsanto, said in a statement.

Among the most popular seeds are those that were modified to resist pests or to withstand powerful herbicides. U.S. farmers this year planted genetically modified seeds on more than half of the soybean acreage and a third of the corn crop, according to U.S. Agriculture Department figures.

Critics of the technology contend that not enough long-term research has been done to conclude that it poses no environmental hazards and is safe for human consumption.

Opposition has been strongest in Britain but has also cropped in other parts of Europe, Asia and to a lesser degree in the United States. 

A U.S. family farm group and longtime critic of biotech on Tuesday sued Monsanto, alleging that it sold genetically altered crops without first ensuring they were safe for consumers and the environment.

The crops have been approved by the U.S. Food and Drug Administration, which requires extensive testing.

Monsanto said 97 percent of the U.S. soybean growers surveyed who planted Monsanto's herbicide-tolerant Roundup Ready soybeans in 1999 were very or somewhat satisfied with the results. The company said 92 percent of those who planted Roundup Ready corn were very or somewhat  satisfied.

Of the growers who planted pest-resistant corn, 83 percent were very or somewhat satisfied, Monsanto said.

The telephone survey, conducted by Marketing Horizons, had a margin of error of plus or minus 3 percent, a Monsanto spokeswoman said.

Corn growers believe elevator actions will reinforce farmer decisions to seek alternatives to GMOs

December 14
American Corn Growers Association press release

In a move that could send ripples of fear through farm country, the National Grain and Feed Association (NGFA) is calling for legal safeguards to protect grain buyers from the crops being delivered by farmers. These safeguards could include language that would allow a grain elevator to reject purchasing any  genetically modified (GMO) crops.

For many months now the American Corn Growers Association (ACGA) has encouraged farmers to seek answers to the many questions concerning the purchasing, planting and harvesting of GMO crops. One of those questions was whether a crop planted in the spring would have a readily available market in the fall because of consumer resistance. Not only does it seem likely that more foreign countries will refuse to purchase GMOs, but domestic grain buyers may refuse to buy them as well, leaving the farmer with nowhere to sell their crop.

According to David Barrett, counsel for public affairs with the NGFA, disclosure statements and warranties may be required when a farmer delivers grain to an elevator. In addition, contracts will require farmers to state what varieties of seed they used or give elevators the right to reject GMOs altogether.

"If there is the likelihood that grain elevators could reject deliveries of GMOs, it is obvious that farmers cannot afford to take the risk of planting them," said Gary Goldberg, Chief Executive Officer of the ACGA. "With prices hitting historic lows, the last thing a farmer needs to occur is that both foreign consumers and domestic grain buyers refuse to purchase certain products. In this event, farmers need to think long and hard before planting GMO seeds."

The ACGA encourages farmers to seek legal advice before signing any documents issued by the elevator. This will allow the grain producers to protect their own interests and know in advance what requirements are demanded for delivery.

"We do not fault the National Grain and Feed Association for taking action to protect their members on the issue of GMOs. After all, that is exactly what the ACGA is doing as well when we encourage Congress to enact legislation to provide liability protection for production agriculture and for farmers to examine alternatives to planting genetically modified crops," added Goldberg.

This burdensome and dangerous contract requirement placed upon agricultural producers will lead more and more farmers away from planting GMOs this coming year. Couple this demand with the questions of certification, segregation, cross-pollination, corporate concentration and crop integrity, it is likely that the forecast by the ACGA of a 20% to 25% drop in GMO planted acres for the year 2000 will increase substantially.

"It is unfortunate that corn growers have been put into the position of making themselves liable for delivering a crop they were promised was safe and marketable. Instead of having the burden fall on the producer for what they sell, the burden should fall on the seed companies where it belongs. How much more can the farmer take before they reject GMOs totally from their planting options," concluded Goldberg?

Monsanto says lawsuit based on unfounded claims

December 14
Monsanto press release

Allegations made by longtime opponents of biotechnology in the context of a lawsuit filed today in Washington, D.C. are absolutely baseless, Monsanto (NYSE: MTC) officials stated today. "This action is another in a series of unsuccessful attempts by veteran antagonists to stop a technology with the potential to improve our environment, increase food production, and improve health," said David Snively, assistant general counsel, for Monsanto. "We're confident this suit will be dismissed."

Seed with enhanced traits such as insect protection and herbicide tolerance have been commercially available since the mid-1990's. Prior to entering the commercial market, each of Monsanto's seed products underwent years of rigorous testing to determine their safety, environmental and performance characteristics. They also have been subjected to intense scrutiny by regulatory agencies, including the U.S. Department of Agriculture, the U.S. Environmental Protection Agency, and the U.S. Food and Drug Administration. Safety testing is based on internationally accepted standards developed by the World Health Organization, the United Nations Food and Agricultural Organization, and other prestigious  scientific authorities.

As a result of biotechnology, many growers have been able to dramatically reduce farming inputs, such as chemical insecticides, and to facilitate the use of valuable soil conservation practices, while at the same time maintaining or enhancing crop yields. In the fields of healthcare and nutrition, the future opportunities are also broad and meaningful, adding critical tools in the fight against nutrient deficiencies and disease.

"Monsanto is committed to the farmer's right to have access to high quality seed choices that allow them to continue in the outstanding progress they have made in producing more food with fewer resources on less land," Snively added.