Monsanto's Expanding Monopolies

[MORTARDUDE]

Monsanto Moves to Control Water Resources & Fish Farming
in India & the Third World--Vandana Shiva
Date: 03 Jun 1999
From: Tula Tsalis {ttsalis@igc.org}

MONSANTO'S EXPANDING MONOPOLIES

By Vandana Shiva

Over the past few years, Monsanto, a chemical firm, has positioned
itself as an agricultural company through control over seed - the
first link in the food chain. Monsanto now wants to control water, the
very basis of life.

In 1996, Monsanto bought the biotechnology assets of Agracetus, a
subsidiary of W. R. Grace, for $150 million and Calgene, a
California-based plant biotechnology company for $340 million. In
1997, Monsanto acquired Holden seeds, the Brazilian seed company,
Sementes Agrocerus and Asgrow. In 1998, it purchased Cargill's seed
operations for $1.4 billion and bought Delta and Pine land for $1.82
billion and Dekalb for $2.3 billion.

In India, Monsanto has bought MAHYCO, Maharashtra Hybrid Company, EID
Parry and Rallis. Mr. Jack Kennedy of Monsanto has said, "we propose
to penetrate the Indian agricultural sector in a big way. MAHYCO is a
good vehicle." According to Mr. Robert Farley of Monsanto, "what you
are seeing is not just a consolidation of seed companies, it's really
a consolidation of the entire food chain. Since water is as central to
food production as seed is, and without water life is not possible,
Monsanto is now trying to establish its control over water. During
1999, Monsanto plans to launch a new water business, starting with
India and Mexico since both these countries are facing water
shortages."

Monsanto is seeing a new business opportunity because of the emerging
water crisis and the funding available to make this vital resource
available to people. As it states in its strategy paper, "first, we
believe that discontinuities (either major policy changes or major
trendline breaks in resource quality or quantity) are likely,
particularly in the area of water and we will be well-positioned via
these businesses to profit even more significantly when these
discontinuities occur. Second, we are exploring the potential of
non-conventional financing (NGOs, World Bank, USDA, etc.) that may
lower our investment or provide local country business-building
resources." Thus, the crisis of pollution and depletion of water
resources is viewed by Monsanto as a business opportunity. For
Monsanto, "sustainable development" means the conversion of an
ecological crisis into a market of scarce resources. "The business
logic of sustainable development is that population growth and
economic development will apply increasing pressure on natural
resource markets. These pressures and the world's desire to prevent
the consequences of these pressures, if unabated, will create vast
economic opportunity - when we look at the world through the lens of
sustainability, we are in a position to see current and foresee
impending-resource market trends and imbalances that create market
needs. We have further focussed this lens on the resource market of
water and land. These are the markets that are most relevant to us as
a life sciences company committed to delivering food, health and hope
to the world, and there are markets in which there are predictable
sustainability challenges and therefore opportunities to create
business value."

Monsanto plans to earn revenues of $420 million and a net income of
$63 million by 2008 from its water business in India and Mexico. By
2010, about 2.5 billion people in the world are projected to lack
access to safe drinking water. At least 30 per cent of the population
in China, India, Mexico and the U.S. is expected to face severe water
stress. By 2025, the supply of water in India will be 700 cubic km per
year, while the demand is expected to rise to 1,050 units. Control
over this scarce and vital resource will, of course, be a source of
guaranteed profits. As John Bastin of the European Bank of
Reconstruction and Development has said, "Water is the last
infrastructure frontier for private investors."

Monsanto estimates that providing safe water is a several billion
dollar market. It is growing at 25 to 30 per cent in rural communities
and is estimated to rise to $300 million by 2000 in India and Mexico.
This is the amount currently spent by NGOs for water development
projects and local government water supply schemes and Monsanto hopes
to tap these public finances for providing water to rural communities
and convert water supply into a market. The Indian Government spent
over $1.2 billion between 1992 and 1997 for various water projects,
while the World Bank spent $900 million. Monsanto would like to divert
this public money from public supply of water to establishing the
company's water monopoly. Since in rural areas the poor cannot pay, in
Monsanto's view capturing a piece of the value created for this
segment will require the creation of a non-traditional mechanism
targeted at building relationships with local government and NGOs as
well as through mechanisms such as microcredit.

Monsanto also plans to penetrate the Indian market for safe water by
establishing a joint venture with Eureka Forbes/Tata, which controls
70 per cent of the UV Technologies. To enter the water business,
Monsanto has acquired an equity stake in Water Health International
(WHI) with an option to buy the rest of the business. The joint
venture with Tata/Eureka Forbes is supposed to provide market access
and fabricate, distribute, service water systems; Monsanto will
leverage their brand equity in the Indian market. The joint venture
route has been chosen so that "Monsanto can achieve management control
over local operations but not have legal consequences due to local
issues."

***** Another new business that Monsanto is starting in 1999 in Asia is
aquaculture. It will build on the foundation of Monsanto's
agricultural biotechnology and capabilities for fish feed and fish
breeding. By 2008, Monsanto expects to earn revenues of $1.6 billion
and a net income of $266 million from its aquaculture business. While
Monsanto's entry into aquaculture is through its sustainable
development activity, industrial aquaculture has been established to
be highly non-sustainable. The Supreme Court has banned industrial
shrimp farming because of its catastrophic consequences. However, the
Government, under pressure from the aquaculture industry, is
attempting to change the laws to undo the court order. At the same
time, attempts are being made by the World Bank to privatise water
resources and establish trade in water rights. These trends will suit
Monsanto well in establishing its water and aquaculture businesses.
The Bank has already offered to help. As the Monsanto strategy paper
states: "We are particularly enthusiastic about the potential of
partnering with the International Finance Corporation (IFC) of the
World Bank to joint venture projects in developing markets. The IFC is
eager to work with Monsanto to commercialise sustainability
opportunities and would bring both investment capital and
on-the-ground capabilities to our efforts."

Monsanto's water and aquaculture businesses, like its seed business,
aimed at controlling the vital resources necessary for survival,
converting them into a market and using public finances to underwrite
the investments. A more efficient conversion of public goods into
private profit would be difficult to find. Water is, however, too
basic for life and survival and the right to it is the right to life.
Privatisation and commodification of water are a threat to the right
to life. India has had major movements to conserve and share water.
The pani panchayat and the water conservation movement in Maharashtra
and the Tarun Bharat Sangh in Alwar have regenerated and equitably
shared water as a commons property. This is the only way everyone will
have the right to water and nobody will have the right to abuse and
overuse water. Water is a commons and must be managed as a commons. It
cannot be controlled and sold by a life sciences corporation that
peddles in death.

(The writer is Director of the Research Foundation for Science,
Technology and Ecology, New Delhi.)


--------------------------------------------------------------------------------