Through a series of transactions, Monsanto has morphed into the world’s largest seed company. Last year, total group revenue reached $14.9bn. The seeds and licensed traits division accounted for about 70% of turnover.

Discussions on concentration in the seed industry typically centre on Monsanto, which achieved the number one position in less than a decade by capturing the markets for corn, soyabean, cotton and vegetable seed.

Monsanto scientists became the first to genetically modify a plant cell in 1982. Today, its genetically modified (GM) traits are planted on more than 80% of US corn acres and more than 90% of soybean acres.

Monsanto got to this position mainly through the acquisition of biotechnology companies. Between 1996 and 2008, it made 50 acquisitions and spent billions of dollars to secure its place at the top.

Acquisitions included DeKalb Genetics for $2.5bn, Delta & Pine Land for $1.5bn, Cargill’s international seed division for $1.4bn, Seminis for $1.4bn and Holden‘s Foundation Seeds for $1.02bn.

By acquiring Holden’s, Monsanto became the biggest American producer of foundation seed corn, the parent seed from which hybrids are made.

In 1996, it purchased Calgene, a biotechnology R&D company that at its height was at the leading edge of the biotech boom and was most famous for its work with tomatoes.

In 1998, Monsanto purchased Cargill’s seed business, a deal intended to speed up the process of penetrating overseas markets, which gave it access to sales and distribution facilities in 51 countries.

In 2004, to gain access to different types of seeds and seed traits, Monsanto formed American Seeds Inc (ASI), a holding company focused primarily on acquiring small, regional corn and soybean seed companies.

Monsanto became the world leader in the seed industry when it acquired Seminis. Following its acquisition of the Dutch-based De Ruiter Seeds, Monsanto now controls about a quarter of the global vegetable seed industry.

Seed licensing

Monsanto not only owns these seed companies, it actually owns the traits (technology). It then licenses these seed traits to approximately 200 independent seed companies.

Some of Monsanto’s recent foreign investments include seed companies in India, Brazil and China, with many of these taking the form of joint ventures.

They have also signed agreements with the other big six agro-chemical companies, such as BASF. They jointly agreed to spend up to $1.5bn on engineering stress-tolerant corn, soyabeans, cotton and oilseed rape, for which the two companies control almost half of the patents.

Monsanto holds dominant positions across most crop types. For example, in the key corn-growing regions of the world – the US, Brazil and Latin America – Monsanto holds the number one spot with 60% of the market.

In soyabean, Monsanto holds the dominant position, controlling nearly 30% of the market and 90% of US soyabean acerage has Monsanto traits.

After numerous unsuccessful attempts to enter the sugar beet industry, Monsanto turned its focus to sugar cane in Brazil which has proven more successful.

The company has also struggled with wheat, abandoning an attempt to commercialise genetically modified wheat in 2004 due to market rejection abroad. US farmers, who export a large portion of their crops, recognised the huge risks in introducing a crop derived from biotechnology, that customers did not want.

Summary

Although it has hit some regulatory hurdles along the way, Monsanto’s strategy to move into the seeds and traits market has proven very successful.

Not only has it diversified away from its main glyphosate-based herbicide at a time when it came off patent, it has taken control of the first part of the food supply chain across most crop types.

While Monsanto’s current seed and trait footprint touches corn, soyabeans and cotton on around 400m acres, deployed globally and across crops, Monsanto believes its technology platform can reach a market opportunity of greater than 1bn acres.

What this will mean for Irish farmers remains to be seen. If, one day, Europe accepts crops originating from current GM technologies will Monsanto, or any of the other big six, be at the forefront in the production of gene-based solutions for the Irish climate?

The reality is that our crops and our market are tiny in a global context and our farmers may remain disadvantaged as we become more restricted to new genetic-based technologies in the years ahead.