- 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.
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- 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.
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- 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."
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- 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
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."
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- 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."
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- 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.
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- 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."
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- Another new business that Monsanto started in 1999 in
Asia is aquaculture.
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- 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.
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- 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 pa 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.
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- 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. http://www.transnationale.org/anglais/sources/envi
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- http://www.sustain.org/biotech/News/news.cfm?News_ID=3202
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