• Former head of Novartis - quote
  • Tewolde - quote
  • image
  • Rice and new scientist - quote
  • American farmers - silos - quote


GM - who benefits (and who loses)?

Indra Lubis, part of a coalition of 13 Indonesian small farmer unions with 900,000 members, explains that rejection of genetically modified seed and pesticides is about self-determination:

"With Monsanto, who have planted GM cotton in south Sulawesi, we'll have to depend on them for seed. They want to control cotton and food production. As peasants, we'll be made dependent on multinational corporations. But we are independent when we develop our own agriculture. We use our own productive system, with no chemical fertilizer or herbicides. We use local seeds and local fertilizer. In Indonesia we have so many varieties of seed. It is a deep part of our culture."1

Key Information

In recent years food and farming have been increasingly monopolised by a small number of companies, reducing diversity of all kinds, and reducing the control of both consumers and farmers over how food is grown. GM technology provides a way to maximise profits from the sale of seed: its products can be patented as an 'invention' and the company owning the patent can charge license fees on top of already premium prices. On top of this, companies have found other ways of using the technology to boost their profits, such as manufacturing plants which work in conjunction with their own branded weed-killer,  or, notoriously, trying to develop so-called terminator plants which produce infertile seeds, forcing people to go back to buy more from the company the following season.

It is not just the corporations who have benefited from the technology - some large landowners have seen an increase in power and wealth. GM operates mostly in places like the USA and Canada where there is already a highly industrialised agricultural economy, with large tracts of land owned by small numbers of individuals, and worked by means of machines and chemicals. However, where this is not already the case, it tends to move things in this direction. It is true that GM does not do this all on its own, it is a particularly effective means of increasing the control of corporations and national elites, and it should still be seen as part of a wider context of farming methods that damage the environment and increase poverty among small farmers.


Corporate Control: Monopolising the seed market

GM has played a major role in consolidating the power of a few players at the very top of the seed market: this is the only real benefit that the technology brings to anyone. A lot of the concentration in seed markets took place in the 1980s after a US supreme court ruling made it possible to take out patents on living things. Interestingly, it was companies that had previously dealt in other areas such as chemicals and pharmaceuticals started to buy out and merge with seed companies.3

In 2007, the global seed market was 50% controlled by the top 11 companies,4 while just 6 companies controlled 85% of the world pesticide market.5 In 2008, in the midst of the food crisis, with the prices of basic commodities rocketing, driving more people into hunger, these companies were making record profits: BASF, for example, increased profits that year by 37% to $894 million.6

While GM brings minimal revenue for farmers, increased use of GM technology was cited as a major reason for a 30% increase in profits in the proprietary (i.e. patented) seed market between 2000 and 20057. This is not just a question of money but also of what money buys: newer and slicker advertising campaigns; the reserved funds to undercut competitors until they are pushed out of business; the initial outlay for long term 'partnerships' with governments that bring long term profit and influence for companies.



From the beginning, GM provided an easy way for plants to be patented. When intellectual property laws first came into place to reward 'inventors', it was never considered that a living thing could be considered an invention, and farmers were free to swap, share and save their seed as they had done for generations. However a case in the US Supreme Court in 1980 ruled that a GM bacteria could be patented8 9, and since then all GM crops have been. While there are other mechanisms available for companies who want to increase the profits they make from seeds, GM technology makes it very easy to identify when someone is not paying the license fees extracted under patent law: the genetic make-up of the engineered plant is known and can be tested for. There are even instances of companies suing farmers whose fields have been contaminated by GM crops from neighbouring farms10 most famously with Monsanto and the Canadian farmers Percy and Louise Schmeiser.

Monsanto is the world's biggest seed company and is responsible for over 80% of the GM crops currently in cultivation.11 Internationally, its name is synonymous with corporate greed12, and not only because of its particularly crude 'revenue protection' exercises with regards to GM . When its GM seeds went on the market, Monsanto reinforced its rights as holder of the patent by introducing 'grower's agreements' which prohibited seed-saving, and granted themselves the right to inspect farmers' fields and records.

Not only do farmers have no opportunities to negotiate the terms of these contracts, they can commit themselves simply by opening a bag containing Monsanto products.13 While this clause seems implausible, there has been at least one case where Monsanto has successfully used it to sue a seed-saving farmer.14 This was just one of over 100 cases that had been filed in the US by 2001, where farmers were made to pay settlements of up to US$2million for illegally growing their seed without paying a license fee.15 Monsanto even paid private security agents to try to discover examples of illegal growing of GMOs.16 The contracts also prohibit using the seeds for any kind of independent experimentation, either to improve the variety or to test its safety.17 Monsanto's total budget for policing American farmers on patenting issues was said to have reached $10 million by 2005.18

At the same time, it is important to recognise that while Monsanto is sometimes more blatant than other GM companies, (or at least, there is more information available about it) there is nothing unique about the way it operates. Its activities to police its patents have given it a bad name, but other companies profit from the same laws.


'Terminator' technology

Patenting law requires companies to go through the courts in order to penalise seed-savers, but companies are also able to use GM technology itself to force growers to come back to the seed company year after year.

Genetic Use Restriction Technology, known as GURTs, or more popularly, 'terminator technology', involves either plants being engineered to be infertile, so the seed they produce will not grow into new plants for another season, or designed so at the GM trait will only work once a particular chemical, bought from the same company, has been applied.19

In 2000, following mobilisations of small farmers and environmental movements, a global moratorium was placed on GURTs, and this still exists despite pressure from some companies and governments.20 However, patents are still held on terminator technology, (by Monsanto subsidiary Delta and Pine and Syngenta, among others21) and further research was started in Europe in 2007 in the 'Transcontainer' project, which promotes 'biological containment strategies' as a means of limiting GM contamination of other crops.22 This investigation, conducted by a consortium of European academic and public research institutions,23 specifically disassociates itself from GURTs, not because it is doing anything very different, but because, it claims, its objectives are different.24 It is, however, very easy to see how its findings could be made use of by companies, and whether willingly or not, the work of these researchers could help legitimise similar claims made by the GM industry that their 'suicide seeds' are a means to allow the co-existence of GM and non-GM crops.25 Additionally, whatever the motivation of this research, it does not even promise to provide a "fail safe" means of preventing GM cross-contamination, but merely attempts to reduce the risk.26


Herbicide Resistance

In 2008 81% of the GM plants in cultivation were Monsanto products, designed to resist their own herbicide, Roundup.27 This allows farmers to treat an entire field with herbicide, instead of the more labour intensive method of treating individual weed plants.

Although Monsanto is the biggest player in GM technology, Roundup is reported to be a much more important source of their wealth, and is the biggest selling pesticide in the world.28 The commercial success of this product may only partly be linked to the GM products it is sold in combination with: the patent on the active ingredient, glyphosate, expired in 2000 so farmers could buy generic versions of the same herbicide, and use them in conjunction with 'Roundup Ready' GM crops29.

There is no doubt, however, that the combination of the two products has served Monsanto's interests well, and equally there is very little doubt that it has not served the long term interests of farmers, who have ended up having to buy more and more pesticides of all kinds to deal with the 'superweeds' that have also developed resistance to Roundup. In spite of this, companies continue to focus their research energies on new herbicide resistant resistant crops, with over half of the new GM crops awaiting regulatory approval being herbicide or insect resistant.30


GM and land ownership

GM crops tend to be grown in highly industrialised farms. One reason for this is that the herbicide tolerant crops that dominate the GM markets are not suitable for growing alongside crops that will be killed by the herbicides, and so do not work in the kind of farm that intercrops a variety of plants for local consumption.

The main reason however, is that GM requires an outlay that is disproportionate to the returns: only the biggest farmers can afford the license fees, and it is mainly the biggest farmers that benefit, at least in the short term, from the GM traits. In Argentina for example, large farms have had their profits boosted not by the yields of the crops, but by the fact that they no longer have to employ so many people - (initially at least) with Roundup Ready soya the chemicals do all the work, and the land does not even need to be tilled.

At the same time, these larger farms, many of them backed by 'pools' of financial investors, have been growing in size, as farmers have leased land from neighbours who have gone bust due to Argentina's new focus on the (soya) export market, or as the smallest farmers have been evicted from the land they were working.31 Although the problems caused by superweeds mean that these crops may not have brought lasting benefits even to these big farmers32 - it has coincided with and contributed to an increase in power among local elites.

Two of the most significant places where GM has been grown by small farmers have been India and South Africa, and in both these places the industry have hyped up their philanthropic credentials and made exaggerated claims about the success of their projects.33

In both of these countries the significant commercial crop grown by small farmers has been insect resistant 'bt' cotton, chosen, some suggest, as a 'Trojan horse': it is less controversial than food crops in human safety terms, but its introduction can pave the way for other crops.34 In both countries, the crop has not had anything near the success that was claimed for it, and respected research has suggested that the opposite has been true, it has led to reduced yields, debt and poverty.35 In the Makhatini Flats area of South Africa, for example, GM insect resistant (bt) cotton was grown for 8 years, and in the same period, the number of small cotton farmers dropped to around a quarter of those who had been making a living off the land originally.36

Despite having a government that was historically more pro-GM than any other African nation, there are signs that the tables are turning. In 2009 South Africa refused permission for the commercialisation of GM potatoes, based on no less than 11 biosafety and socio economic and agronomic concerns.37 In August 2010 Monsanto withdrew an application to conduct oilseed rape field trials in South Africa following repeated requests for information from the concerned authorities.38

China is the final place where GM crops, again, principally bt cotton, are grown by small farmers. Here, despite initial optimistic accounts of GM's success, recent studies have shown that crops are showing a decreasing resistance to bollworm, that use of insecticides has gone back up to deal with secondary pests,39 and that in the best cotton growing areas GM has in fact barely been used.40

A recent study has shown that China has seen been explosions in pest numbers around farms growing modified strains of cotton. These pests don't just attack cotton but also fruit, vegetables and corn, and are having a devastating effect on 10m small-scale farmers who cultivate 26m hectares of vulnerable crops in the region studied.41


Not unique to GM.

Another argument commonly put forward is that, in the words of the Observer editorial "trying to tie customers to monopoly deals is common business practice" and "not confined to GM crops",42 and therefore, by implication we should not be objecting to them.

True, the problem is not confined to GM technology: hybrid seed, for instance, can be obtained through conventional plant breeding, but 'naturally' operates like the notorious terminator technology - the seeds its plants produce are sterile and cannot be replanted for the next season.

Unsurprisingly, hybrid seed is also popular with many of the companies that also produce GM seed (for example, see the South African case study below). Companies are also finding other ways to collect royalties: for instance in France, farmers must pay a levy before having their wheat processed unless they can produce a receipt to show they have bought certified seed.43 Thus they are penalised even if they have been saving the seed from varieties for which intellectual property rights do not apply. The concentrated ownership of the food chain is not restricted to GM either - a huge proportion of the food eaten in the UK has passed through the hands of a small number of supermarkets, manufacturers of processed foods, grain traders, as well as the seed and chemical companies that are producing GM.44 Above all the move towards concentrated land ownership is not unique to GM, but has been the 'Green Revolution' model for many years, with the consequence that while yields have increased many more people have gone hungry and lost their land.45

Case study: Massive Food Production Programme (MFPP)46

This project was backed by the South African government in 'partnership' with various seed companies including Monsanto, and was billed as a poverty reduction scheme. It offers the perfect example of how GM works alongside other farming methods to disadvantage small farmers, even in what are ostensibly aid programmes.

The project was launched in the Eastern Cape in 2002, with the professed aim of making rural households more self-sufficient in food. It involved small farmers being sold packages of hybrid seed, GM seed, chemical fertilisers and herbicides. In the first year this was financed by the government and farmers did not have to pay, however this subsidy took the form of a loan, and in subsequent years they were asked to pay it back. The full cost of the packages comes to somewhere over a third of an average local monthly income, which meant that the farmers who got involved quickly became indebted. In return for this they got negligible increases in the yield of their main crops, but were unable to grow companion crops such as beans, because these would be killed by the herbicides.

The company's promises that the farmers would have such an increase in profits that they would be able to buy their own seed proved unfounded: even if the yield increases had been significant they did not have access to the sort of markets that could provide major cash profits. However, farmers were also quickly locked into dependency on bought seed because entire areas were transferred at once to the MFPP system, and so saved seed quickly became unavailable.

The lack of substance behind the claims that this was a poverty reduction scheme became more and more apparent. Even from the beginning only certain farms were allowed to participate: those with a certain water supply and depth of topsoil, and very limited slope.

Even more prohibitively, the funding was only available for plots of over 50 hectares. This meant that small plots had to be agglomerated into much larger ones, with the effect that an entire community became dependent on the same monocrop, and had neither the security nor the nutritional variety provided by traditional inter-cropping.

After a few years, as it became clear that farmers would never be able to repay their debts, the government started to demand a deposit before anyone could become involved, completely giving the lie to the claims that the project was intended to target the poorest in society.

It is important to consider the motivation of a company like Monsanto when it gets involved in projects aimed at small farmers who never, realistically, will be able to afford their seed or their pesticides. One obvious explanation is that this is part of a PR campaign, that allows them to publicly 'do good' at minimal cost to themselves, and no doubt this accounts for a substantial part of their motivation.

However, without making accusations of intent, it seems obvious as well, that a project like this could only serve to make things harder for small farmers, and it seems only a matter of time before the debts incurred, along with other barriers to returning to traditional agriculture such as the lack of available saved seed, drives people off the land altogether.

The analysis offered by GRAIN47 suggests that replacing thousands of subsistence farmers with a handful of wealthy landowners would be extremely helpful for a company like Monsanto. Wealthy landowners, on large, monocropped plantations can afford expensive seed and will need to purchase hefty doses of fertiliser and pesticides to counter-balance the disadvantages of such an ineffective and unnatural way of growing things. To spell things out even further, concentrated land-ownership provides profits for seed and agro-chemical companies while small-scale, subsistence farming does not, and while South African people are struggling to put right the land inequalities left to them by apartheid, projects like these do their best to undermine any gains made.


Read more



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2: The International Assessment of Knowledge, Science and Technology for Development, Issues in Brief 'Business as usual is not an option: The role of institutions', p4

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13: 'Farmers' guides to GM contracts', Rafi USA, , www.rafiusa.org/docs/gmobrochure.pdf last viewed 17.05.09

14: Farmer's Guide to GMOs, Farmer's Legal Action Group, Rural Advancement Foundation International - USA, November 2004, p10

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http://www.centerforfoodsafety.org/pubs/CFSMOnsantovsFarmerReport1.13.05.pdf, p23

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24: Transcontainer website, http://www.transcontainer.wur.nl/UK/questionsanswers/, last viewed 29.04.09

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26: Transcontainer website, http://www.transcontainer.wur.nl/UK/questionsanswers/, last viewed 29.04.09

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34: Pschorn-Strauss, Elfrieda'BT cotton in South Africa: the case of the Makhathini farmers', Seedling, April 2005, available at http://www.grain.org/seedling/?id=330, last viewed 02.05.09

35: Qayum, A and Sakkhari K, Bt Cotton in Ana6_imagelargedhra Pradesh: a three year assessment, 2005

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