Monsanto draws antitrust scrutiny

For plants designed in a lab a little more than a decade ago, they’ve come a long way: Today, the vast majority of the nation’s two primary crops grow from seeds genetically altered according to Monsanto company patents.

Ninety-three percent of soybeans. Eighty percent of corn.

The seeds represent “probably the most revolutionary event in grain crops over the last 30 years,” said Geno Lowe, a Salisbury, Md., soybean farmer.

But for farmers such as Lowe, prices of the Monsanto-patented seeds have steadily increased, roughly doubling during the past decade, to about $50 for a 50-pound bag of soybean seed, according to seed dealers.

The revolution, and Monsanto’s dominant role in the nation’s agriculture, has not unfolded without complaint. Farmers have decried the price increases, and competitors say the company has ruthlessly stifled competition.

Now Monsanto – like IBM and Google – has drawn scrutiny from U.S. antitrust investigators, who under the Obama administration have looked more skeptically at the actions of dominant firms.

During the Bush administration, the Justice Department did not file a single case under antimonopoly laws regulating a dominant firm. But that stretch seems unlikely to continue.

This year, the Obama Justice Department tossed out the antitrust guidelines of its predecessor because they advocated “extreme hesitancy in the face of potential abuses by monopoly firms.”

Of all the new scrutiny by Justice, the Monsanto investigation might have the highest stakes, dealing as it does with the food supply and one of the nation’s largest agricultural firms.

Monsanto says it has done nothing wrong.

“Farmers choose these products because of the value they deliver on farm,” Monsanto said in a statement.

Even with the growing cost, farmers have embraced the genetic modifications because they save work and enable them to cultivate more land. The modified plants can stand up to the powerful herbicide glyphosate, best known commercially as Roundup, allowing them to use the weed killer not just before planting but also after the crops have come up.

“Everybody wants it, and Monsanto is seeing what the market will bear,” said Lowe, 39. “People say that’s capitalism. The question is, where does capitalism meet corruption?”

Before it jumped into biotechnology, Monsanto was already one of the nation’s largest chemical companies and had patented glyphosate, bringing it to market as Roundup in the ’70s.

If there was a practical drawback with Roundup, it was that it couldn’t be used after planting: Applying Roundup at that point would kill the crops, too.

Scientists wondered: Could they develop plants that could withstand Roundup?

The answer emerged, partly by accident, out of Louisiana muck.

Monsanto was producing Roundup at a plant in Luling, La., and the water and sludge in the waste ponds around the plant were exposed to the chemical. It was the perfect place to find organisms that could withstand the chemical’s lethal effects.

After bacteria discovered in the pond sludge proved resistant to the chemical, scientists isolated the gene that gave the bacteria Roundup tolerance and placed that gene, known as CPS4, into soybeans, then corn.

The resulting plants, called “Roundup Ready,” represented a billion-dollar breakthrough.

Although farmers have grumbled about Monsanto’s regular price increases for Roundup Ready technology for seeds, it is DuPont, a Monsanto rival, that has pressed the antitrust case.

In court papers, DuPont argues that Monsanto has used the dominance of the Roundup Ready brand to prevent competitors from bringing innovations to market.

In its view, Roundup Ready is so popular that any new biotech innovations must be designed to work with Monsanto’s technology. But Monsanto effectively freezes out the competition, it says, by making it difficult for other companies to win a license to add their traits to Monsanto-patented seeds.