Monsanto - villain, or pioneer?

The six-storey brick buildings housing Monsanto's chief scientific research facilities in Chesterfield, Montana, look like a typical office park. Until you glance up.

Greenhouses covering 0.8ha packed with leafy green plants perch atop the complex, testament to Monsanto's hope that as high-tech crops stretch for the sun, profits will likewise grow.

Long a leader in the revolutionary changes taking place in agriculture, Monsanto has become a hero to farmers by providing products that improve production of key crops such as corn, soybeans and cotton.

But the company's efforts to give Mother Nature a hand have made it a villain to those who see biotechnology as a threat to the safety of food and the environment. Lawsuits and protests have dogged Monsanto's genetic seed work, and mounting financial pressures led the company last year to form Pharmacia in a merger with Pharmacia & Upjohn.

Now, restructured, Monsanto is seeking a fresh start, but facing a murky future.

"It's been a very innovative company coming up with new products and ways of doing business in ways other folks probably had never even imagined were possible," says Food and Agricultural Policy Research Institute economist Pat Westhoff.

"But they definitely face a number of hurdles."

The company's claim to fame is Roundup, the world's No 1 herbicide.

Last year, net sales of Roundup and related herbicides were $US2.6 billion ($6.31 billion), 48 per cent of total company net sales.

But the United States patent on the key ingredient in Roundup expired in September, opening Monsanto's bread-and-butter product line to increased competition.

To hold market share, the company is reducing prices on its Roundup products and introducing new variations. But it is also putting an increasing reliance on expanding markets for its "Roundup Ready" crops, which are genetically transformed to resist the weedkiller, allowing farmers to kill weeds easily without damaging crops.

Genetically modified (GM) corn and soybeans have soared in popularity in the US farm belt since debuting in the mid-1990s. Last year, planting of Monsanto biotech seeds grew by more than 15 per cent.

Monsanto is now seeking regulatory approval to introduce a Roundup Ready wheat seed to the market. Also in the pipeline are Roundup Ready rice and alfalfa seeds. More distant plans include GM plants that produce vaccines.

But as Monsanto presses ahead, global debate about the safety of genetically modified crops shows no signs of easing. Opposition to Monsanto has been particularly virulent in Europe, where GM crops have been snagged in the regulatory approval process for years and labelled "Franken-foods" by opponents.

Two weeks ago, Italian police seized about 120 tonnes of maize suspected of being contaminated with unapproved genetically engineered material from Monsanto.

And in January, more than 1000 protesters stormed a Monsanto experimental farm in Brazil, yanking out GM corn and soybeans crops at Monsanto's experimental farm.

In New Zealand, activists boarded a ship to protest against the import of genetically engineered soya products.

Though less vocal, US-based GM opponents are also active. Last week, protesters picketed Starbucks' annual meeting, demanding the company halt use of genetically modified soy and corn products and milk produced with bovine-growth hormones.

Last year, protesters convinced McDonald's and other fast-food chains to stop using Monsanto's genetically modified potato, a product it has since shelved.

And while US wheat growers say they would welcome the production efficiencies they might gain from Monsanto's new GM wheat variety, they fear the loss of sales.

"The name Monsanto has been made synonymous with everything bad and ugly about biotechnology," says Worldwatch Institute researcher Brian Halweil.

Monsanto is determined to ride out the GM backlash and has adopted a low-key approach heavy on education and outreach and light on the aggressive promotional moves of years past.

But the company's growth potential remains an open question, many say.

Lehman Brothers analyst Sergey Vasnetsov has a hold rating on the stock, and says the "dark clouds of negative public perception" loom large.

Monsanto officials have acknowledged missteps in the past and respect the tenuous ground they now walk on.

"There are several things we need to do to continue to be a successful company," says spokeswoman Lori Fisher.

One of those is "carrying out the biotechnology acceptance strategy. Longer term, that would be key to our company's future."

- REUTERS

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