I just came across this video of Jim Cramer from Mad Money talking about potential anti-trust activity against Monsanto. If you can get past the inane bells and whistles that Cramer punches up mid-sentence, this video is worth taking a look at.
A couple things to note about the video – Cramer repeats the claim that Monsanto has raised its prices by 42% without finding out that it was based on a misunderstanding. The article it was based on was comparing an older variety of GE soybeans to a newer one with different breeding and different transgenic traits. But many took it to be a sign that the big bad gene giant was accelerating the prices of the same old seeds. You can read more about it at Looking Beyond the Headline at the Monsanto blog.
To put it another way, I have Windows XP Home edition on my computer, but there is the newer Windows Vista to consider as well. If I was buying a new computer right now, the price of XP would start at $79 according to a google price search I just did. Vista would begin at $107 for the home edition. This is a 35% increase… does it mean that Microsoft is jacking up its Windows prices? If you ask Microsoft, Vista is a superior product (although opinions differ on that estimation). The newer varieties of seeds are supposed to be worth more to the farmers in terms of yield and savings on input and labor costs, thus the seed companies can charge more and the farmers will buy them. The previous version of the seeds have not changed very much in terms of price from year to year.
So it weakens Jim Cramer’s argument that this price increase is challenging the feds to go after them with anti-trust action. (Far be it for me to suggest that the government might be better at research than Mad Cramer, and would probably not make the same mistake.) Still, there is the potential for this to occur. In 2003, antitrust investigators requested information from Monsanto with regard to the herbicide industry, and I don’t recall anything tangible coming out of that. (correct me if you find anything) Then again, it was under a previous administration, so the Obama Administration could be looking for a more independent feel for the state of competitiveness in agriculture.
As Cramer mentioned in his segment, antritrust regulators announced their plan to investigate agriculture in Monsanto’s home-town of St. Louis, which many take to be a clear sign of a challenge toward the Bt Behemoth, so I guess we’ll have to wait and see what comes of this.
I wanted to make a brief comment about one of the claims that floats around in the statements of the opponents to genetic engineering, and that is the notion that seed companies are trying to “control the food supply,” and by extension, rule the world. The very existence of anti-trust laws in this and other countries precludes that from happeninig, and it would be interesting to see if there is some action taken to try to split up Monsanto like what was tried with Microsoft. I do have a thought on an analogy between the Windows anti-trust issue and the seed company contracts, but I’ll need to do a little more research to be able to flesh it out.
But here’s my last point to make on the issue of ‘ruling the world’ through GE crops. The more regulatory hurdles you throw at the technology, the more you concentrate its use in the hands of the largest companies. If you want there to be other companies, governments, university programs, etc, to be making GE crops that will compete against the seed companies that exist today, it has to be economically feasible for those organizations to be able to get through the regulatory process. In a bizarre irony, organizations such as Greenpeace that want to get rid of genetic engineering because they believe it will force a corporate monopoly – might actually be helping that come to pass because they are trying to make it harder for anyone to produce and approve a genetically engineered crop. So only ones who could afford to do it in a Greenpeace regulatory dream-world will be Monsanto… and probably China.
Wouldn’t it be weird if they were actually working for them?