Monday, 19 November 2012

DOJ drops case against Monsanto

The Department of Justice has dropped its anti-trust case against Monsanto for anti-competitive behavior in the seed market.  The company is very happy.

I imagine that DOJ staff are disappointed that their efforts in recent years to ensure competitive ag-sector markets have come to very little.  Here is the section on the seed industry from DOJ's May 2012 summary of its field hearings:
Genetically Modified Seeds. The rise of genetically modified seeds generated intense and extensive discussion. Many farmers spoke about the high price of genetically modified seeds, restrictions on the use of genetically modified seeds, and a dearth of choices of genetically modified and conventional seeds. For example, during the public comments in Iowa, there was testimony that “many farmers say that the prices they’re paying are indeed out of hand for seed,” that “farmers say that their choice, their seed options are dramatically reduced, especially in the way of conventional corn and soybean varieties,” and that “farmers fear that the best and newest genetics will only be introduced with expensive patented traits stacked into them.”56

A farmer echoed these comments, asserting that the advent of genetically modified seeds “has reduced my options for non-GMO seeds” and “increased my costs to raise corn.”57

Participants argued that seed traits or “nature” should not be patentable. They asserted that the current patent landscape stifled innovation and competition.58 Many also voiced philosophical objections to the patenting of seed technology and lamented that licensing restrictions imposed by seed companies upset centuries-old folkways. As one rice and soybean farmer put it, “We lost the thing [that as] farmers and inhabitants of this planet . . . is most precious to us, and that is the intellectual property rights to our food.”59

Other participants extolled the virtues of genetically modified seeds, including, they stated, higher yields and less environmental impact. One crop farmer summarized, “The use of GMO seeds makes economic and agronomic sense and provides efficacy with less trips across the field, less fuel, and a safer environment for us farmers, our families, and the environment.”60

Here is the American Anti-trust Institute's 2009 summary of the leading competition concerns (Update 12/2/2012: AAI receives support from DuPont, a Monsanto competitor), Monsanto's 2009 response (.pdf), and a 2010 article in Choices Magazine by agricultural economist GianCarlo Moschini.

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