Question

CASE ANALYSIS OF MONSANTO COMPANY:

Give the following:

1. Central Problem

2. SWOC

3. ACAS (3 alternative courses of action)

4. RECOMMENDATION (choose the best ACA)

5. CONCLUSION

MONSANTO COMPANY

When you think of Monsanto, the phrase genetically modified likely comes to mind. The Monsanto Company is the world’s largest seed company, with sales of over $11.8 billion. It specializes in biotechnology, or the genetic manipulation of organisms. Monsanto scientists have spent the last few decades modifying crops, often by inserting a new gene or adapting existing genes within plant seeds, to meet certain aims, such as higher crop yields or insect resistance. Monsanto produces plants that can survive weeks of drought, ward off weeds, and kill invasive insect. Monsanto’s genetically modified (GM) seeds have increased the quantity and availability of crops, helping farmers worldwide increase food production and revenues.

Today, 90 percent of the world’s GM seeds are sold by Monsanto or companies that use Monsanto genes. Monsanto also holds a 70 to 100 percent market share on certain crops. Yet Monsanto has met its share of criticism from sources as diverse as governments, farmers, activists, and advocacy groups. Monsanto supporters say the company creates solutions to world hunger by generating higher crop yields and hardier plants. Critics accuse the muti-national giant of attempting to take over the world’s food supply and destroying biodiversity. Since biotechnology is relatively new, critics also express concerns about the possibility of negative health and environmental effects from biotech food. However, these criticisms have not kept Monsanto from becoming one of the world’s most successful companies. Monsanto owes its $11.8 billion in sales to biotechnology, specifically to its sales of genetically modified (GM) plant seeds. These seeds have revolutionized the agriculture industry.

Throughout history, weeds, insects, and drought have been the bane of the farmer’s existence. In the twentieth century, synthetic chemical herbicides and pesticides were invented to ward off pests. Yet applying these chemicals to an entire crop was both costly and time consuming. Then Monsanto scientists, through their work in biotechnology, were able to implant seeds with genes that make the plants themselves kill bugs. They also created seeds containing the herbicide Roundup, and herbicide that kills weeds but spares the crops.

Since then Monsanto has used technology to create many innovative products, such as drought-tolerant seeds for dry areas like Africa. The company also utilizes its technological prowess to gain the support of stakeholders. For example, Monsanto has

a laboratory in St. Louis that gives tours to farmers. One of the technologies the company shows farmers is a machine known as the corn chipper, which picks up seeds and removes genetic material from them. That material is analyzed to see how well the seed will grow if planted. The “Best” seeds are the ones Monsanto sells for planting. Impressing farmers with its technology and the promise of better yields is one way Monsanto attract potential customers.

However, genetically modified crops are not without critics. Opponents believe influencing the gene pools of the plants we eat could result in negative health consequences. Others worry about the health effects on beneficial insects and plants, fearing that pollinating GM plants could affect nearby insects and non-GM plants. CEO Hugh Grant decided to curtail the tide of criticism by focusing biotechnology on products not directly placed on the dinner plate, but on seeds that produce goods like animal feed and corn syrup... In this way, Grant reduced some of the opposition. The company invests largely in four crops: corn, cotton, soybeans, and canola. Monsanto owes much of its revenue to its work on GM seeds, and today more than half of U.S. crops, including most soybeans and 88 percent of corn, are genetically modified.

Farmers who purchase GM seeds can grow more crops on less land and with less left to chance. GM crops have saved farmers billions by preventing loss and increasing crop yields. For example, in 1970 the average corn harvest yielded approximately 70 bushels an acre. With the introduction of biotech crops, the average corn harvest increased to roughly 150 bushels an acre. Monsanto predicts even higher yields in the future, possibly up to 300 bushels an acre by 2030. According to Monsanto CEO Hugh Grant, this increase in productivity will increase crop yields without taking up more land, helping to meet the word’s growing agricultural needs.

As a result of higher yields, the revenues of farmers in developing countries have increased. According to company statistics, the cotton yield of Indian farmers rose by 50 percent, doubling their income in one year. Additionally, the company claims that insect-resistant corn has increased crop yields in the Philippines by 24 percent. Critics argue that these numbers are inflated; they say the cost of GM seeds is dramatically higher than traditional seeds, and therefore actually reduce farmers’ take-home profits.

Monsanto’s GM seeds have not been accepted everywhere. Attempts to introduce them into Europe met with consumer backlash. The European Union banned most Monsanto crops except for one variety of corn. Consumers have gone so far as to destroy fields of GM crops and arrange sit-ins. Greenpeace has fought Monsanto for years, especially in the company’s efforts to promote G crops in developing countries. Even India has banned a variety of genetically modified eggplant because of concerns

over safety. This animosity toward Monsanto’s products is generated by two main concerns: the safety of GM food and the environmental effects of genetic modification.

As bioengineered creations of the Monsanto Company, Monsanto’s seeds are protected under patent law. Under the terms of the patent, farmers using Monsanto seeds are not allowed to harvest seeds from the plants for use in upcoming seasons. Instead, they must purchase new Monsanto seeds each season. By issuing new seeds each year, Monsanto ensures it secures a profit as well as maintains control over its property. This patent protection has become a controversial subject among farmers and has led to numerous litigation battles for Monsanto.

Throughout agricultural history, farmers have collected and saved seeds from previous harvests to plant the following year’s crops. Critics argue that requiring farmers to suddenly purchase new seeds year after year puts an undue financial burden on them and gives Monsanto too much power. However, the law protects Monsanto’s right to have exclusive control over its creations, and farmers must abide by these laws. When they are found guilty of using Monsanto seeds from previous seasons, either deliberately or out of ignorance, they are often fined.

Since it is fairly easy for farmers to violate the patent, Monsanto has found it necessary to employ investigators from law firms to investigate suspected violations. The resulting investigations are a source of contention between Monsanto and accused farmers. According to Monsanto, investigators deal with farmers in a respectful manner. They approach the farmers suspected of patent infringement and ask them questions. The company claims that investigators practice transparency with the farmers and tell them why they are there and who they represent. If after the initial interview is completed and suspicions still exist, the investigators may pull the farmer’s records. They may bring in a sampling team, with the farmer’s permission, to test the farmer’s fields. If found guilty the farmer must often pay Monsanto. However, some farmers tell a different story about Monsanto and its seed investigators. They claim that Monsanto investigators have used unethical practices to get them to cooperate. They call the investigators the ”seed police” and say they behave like a “Gestapo” or “mafia.”

In 2007 Monsanto sued Vernon Bowman, an Indiana farmer who Monsanto claims used second generation Monsanto seeds to plant soybeans. Monsanto claimed their patent protection reaches past first-generation seeds and Mr. Bowman infringed upon their patent. In 2009 the court ruled in favor of Monsanto and ordered Bowman to pay $84,000 in damages. Mr. Bowman did not accept defeat, and in 2013 brought his case before the Supreme Court. The Supreme Court ruled in favor Monsanto, representing a great victory for biotechnology companies.

Monsanto does not limit its investigations to farmers. It filed a lawsuit against DuPont, the world’s second-largest seed maker, for combining DuPont technology with Roundup Ready . Monsanto won that lawsuit, but was countersued by DuPont for anticompetitive practices. These accusations of anticompetitive practices garnered the attention of federal antitrust lawyers. With increased pressure coming from different areas, Monsanto agreed to allow patents to expire on its seeds starting 2014. This will allow other companies to create less expensive versions of Monsanto seeds. However, Monsanto announced it would continue to strictly enforce patents for new versions of its products, such as Roundup Ready 2 soybeans.

Answer 1