Pioneer Hi-Bred, a DuPont business, is committed to fighting to expose Monsanto’s anticompetitive practices and offering farmers and independent seed companies the choice to select the seed characteristics that work best for them.

But you don’t have to take our word for it…

BACKGROUND

“Altered genetic traits in seed germplasm have helped farmers double their yields in the last third of a century by producing corn and soybeans that can stand up better to wind, excessive moisture, plant diseases, herbicides and insects.”¹ “This year, 85 percent of all corn planted in the U.S. was genetically modified. For soybeans, it was 91 percent.”² “Monsanto’s Roundup Ready^® traits are used on almost 80 percent of the corn acres in the United States and up to 90 percent of soybean acres, according to industry figures.”³

GLOBAL IMPLICATIONS

“Greater investment, innovation and improved public-private partnerships are needed to meet the world’s growing demand for food, business and government leaders said at the World Food Prize symposium in the United States.”⁴ “Food production will have to rise 70 percent by 2050 to meet global requirements, according to the UN, even as climate change threatens wheat, corn and rice yields in developing nations.”⁵ “‘We have to develop crops, including new inputs to go with them that can grow in a drought [and] to have crops that can survive a flood, that can resist pests and new diseases. We need higher yields on the same land, despite more difficult weather. And we will never get there without a continuous and urgent, science-based search to increase productivity, especially focused on the needs of small farms in the developing world.’”⁶

HISTORY

“Monsanto has never been shy about going to court to defend its dominant position. Regulators are certainly concerned. In 2007, when Monsanto bought a cotton-seed maker, Delta and Pineland, the Justice Department’s antitrust division required it to remove license provisions forbidding rivals from stacking Monsanto with non-Monsanto traits.”⁷ “Patents have in the past been used to maintain or extend monopolies, and that’s illegal, and you can be sure [that the Department of Justice is] going to be looking very closely at any attempt to maintain or extend a monopoly through an abuse of patent laws.”⁸ Furthermore, U.S. Attorney General Eric Holder recently underscored that the DOJ “want[s] everybody to have a fair shot," and that “[b]ig is not necessarily bad, but big can be bad if power that comes from being big is misused. That is simply not something that this Department of Justice is going to stand for.”⁹

CURRENT INVESTIGATIONS

“At least seven U.S. state attorneys general are investigating whether Monsanto Co., the world’s largest seed producer, has abused its market power to lock out competitors and raise prices. Iowa and Illinois, whose antitrust probes Monsanto disclosed previously, have joined with Ohio, Texas, Virginia and two other states in a working group coordinating the inquiries, according to investigators, farmers and seed dealers. They declined to identify the sixth and seventh states.” ¹⁰

ANTICOMPETITIVE PRACTICES UNDER INVESTIGATION

“What would likely be the centerpiece of any antitrust investigation into Monsanto’s practices is whether the agricultural biotechnology giant has exercised its market power to foreclose rivals from market access, thereby slowing innovation and adversely affecting prices, quality, and choice for farmers and ultimate consumers of seed products.”¹¹ “Confidential contracts detailing Monsanto Co.’s business practices reveal how the world’s biggest seed developer is squeezing competitors, controlling smaller seed companies and protecting its dominance over the multibillion-dollar market for genetically altered crops, an Associated Press investigation has found.”¹²

• “One of the numerous provisions in the licensing agreements is a ban on mixing genes – or ‘stacking’ in industry lingo – that enhance Monsanto’s power. One contract provision likely helped Monsanto buy 24 independent seed companies throughout the Farm Belt over the last few years: that corn seed agreement says that if a smaller company changes ownership, its inventory with Monsanto’s traits ‘shall be destroyed immediately.’”¹³
• “[T]he company plans to push through a 42% price increase on its new seeds, and there’s nothing these farmers can do about it.”¹⁴ “’We now believe that Monsanto has control over as much as 90 percent of (seed genetics). This level of control is almost unbelievable,’” said Neil Harl, agricultural economist at Iowa State University who has studied the seed industry for decades. ‘The upshot of that is that it’s tightening Monsanto’s control, and makes it possible for them to increase their prices long term. And we’ve seen this happening the last five years, and the end is not in sight.’”¹⁵
• “A third potential problem involves patent extensions that reflect inconsequential changes to the original technology. This strategy can needlessly advance the onset of obsolescence for the previous technology, at great cost to consumers. Patent extension can also delay the introduction of competing branded or generic products and prolong a period of supracompetitive pricing for the patented technology – an approach best known in the pharmaceutical industry. […] For example, Monsanto’s Roundup Ready® soybean goes off patent in 2014. In 2006, the company filed a petition for determination of non-regulated status with the USDA for its Roundup Ready 2 Yield® soybean. The petition indicates similarities in the coding sequence (CP4 EPSPS) between the first generation Roundup Ready® soybean and the second-generation technology.”¹⁶ “[DuPont] also charges that Monsanto is preempting competition from generic makers by threatening to revoke seed companies’ licenses if they don’t switch to a new version before Monsanto’s patent expires in 2014.” ¹⁷

“MONSANTO IS THE MICROSOFT OF AGRICULTURE”¹⁸

“Monsanto is the Microsoft of agriculture: the dominant company that controls the key biotechnology that all farmers need.”¹⁹ “‘It’s a good parallel to suggest that Monsanto has used Roundup seed traits the same way Microsoft used its Windows operating system, to lock out competitors,’ said Don Flexner, a managing partner in a Washington, D.C. law firm headed by David Boies that is representing DuPont and Pioneer.’’’²⁰

SIGNIFICANCE FOR COMPETITION

“Competition is thus between the proverbial ‘rock and a hard place.’ A myriad of adverse effects potentially flow from this diminished state, including reduced or lower quality innovation in transgenic seed, higher seed prices to farmers (i.e., ‘technology fees’), fewer transgenic seed choices, and higher commodity prices than what would have prevailed under competitive market conditions.”²¹

“Agriculture is at the frontier of technological progress. Its innovations will determine, to a large extent, whether and at what cost this country and the world will be able to feed its growing populations. No company should dominate such an essential business.”²²

“Declining competition in the seed business could lead to price hikes that ripple out to every family’s dinner table, that’s because the corn flakes you had for breakfast, soda you drank at lunch, and beef stew you ate for dinner likely were produced from crops grown with Monsanto’s patented genes.”²³

®Roundup Ready is a registered trademark used under license from Monsanto Company.

1. The Des Moines Register 10/5/2009
2. The News Journal 8/19/2009
3. The Des Moines Register 5/6/2009
4. AP 10/15/2009
5. Bloomberg 10/15/2009
6. AgWired 10/16/2009
7. The New York Times 10/22/2009
8. U.S. Assistant Attorney General, Christine Varney at the March 12 Workshop
9. Reuters, 3/12/2010
10. Bloomberg, 3/10/2010
11. American Antitrust Institute 10/23/2009
12. AP, 12/13/2009
13. AP Impact, 12/13/2009
14. CNBC 8/13/2009
15. AP Impact, 12/13/2009
16. American Antitrust Institute 10/23/2009
17. The New York Times 10/22/2009
18. St. Louis Post-Dispatch 7/23/2009
19. St. Louis Post-Dispatch 7/23/2009
20. The Des Moines Register 10/4/2009
21. American Antitrust Institute 10/23/2009
22. The New York Times 10/22/2009
23. AP 12/13/09