One Cotton-Pickin' Mess
Forbes Magazine
. . Thursday September 26,
By Brandon Copple


Monsanto has finally found some big markets abroad for its biotech crops. Too bad the seeds are either smuggled in or knocked off illegally.

When the Indian government approved the planting of Monsanto 's genetically modified Bt cotton in March, it attributed the change in policy to years of scientific study. Balderdash, says Sharad Joshi. The leader of India's farmer association believes the bureaucrats in New Delhi signed off because they had no choice: 11,000 hectares or so have been sown with a Monsanto knockoff known as Navbharat 151. "That made it physically impossible to keep Bt cotton closeted," Joshi says.

India isn't the only place where a ban on genetically modified seeds has created a booming black market. In one of Brazil's leading soybean-producing states more than half this year's $32 billion crop is expected to come from bootlegged versions of Monsanto's (NYSE:MON - News) biotech seeds.

Such is the lurching progress of new markets. There isn't much the folks in St. Louis can do about knockoffs. After a decade of bad press and global demonization, the company has grown gun-shy. Without patent protection in India, it can't go after Navbharat, and it's reluctant to attack small-fry farmers, even when they're clearly using stolen technology--namely, seeds containing the gene Monsanto developed to produce a natural pesticide lethal to the bollworm, scourge of cotton fields worldwide. "We're in this for the long haul, and the best we can do is work with local governments to protect our technology," says Gary Barton, a Monsanto spokesman.

Half a world away, in the Rio Grande do Sul province of southern Brazil, as much as 60% of this year's soybean acreage could be sown with smuggled genetically modified seeds. They are known as "Maradona" beans, after the soccer star, because they come from Argentina--where biotech is legal--and perform so well. (Compounding its woes, Monsanto, which sold $150 million of its Roundup Ready soybeans last year in Argentina, had to write down $154 million for bad receivables there.)

Farmers flock to biotech in the developing world for the same reason they have in the U.S., where genetically modified plants account for 75% of the soybean crop. Planting pest- or weed-killer-resistant seeds means less money for chemicals, less fuel to run spraying equipment and less soil compaction from dragging machinery across fields.

But that doesn't impress Europe, where Monsanto could use a black market.