Greenpeace warns investors Monsanto a risk

By Carey Gillam

KANSAS CITY, Mo., April 16 (Reuters) - Anti-biotech forces opened a new line of attack on agrochemical producer Monsanto Co (NYSE:MON - News) on Wednesday, warning investors that the company's increasing focus on development of genetically modified crops was destined for disaster.

"Monsanto appears to be digging its own grave with its GE strategy," Greenpeace spokeswoman Lindsay Keenan said in a statement.

In a report commissioned by Greenpeace, Innovest Strategic Value Advisors told investors that Monsanto had "above average risk exposure" for investors.

The report says Monsanto's genetically modified crops face widespread consumer opposition around the world, lack regulatory approval in many countries, and are likely to suffer a contamination event similar to the StarLink corn problem three years ago that cost Monsanto competitor Aventis about $1 billion when biotech corn not approved for food use showed up in food products.

Monsanto, which has just released its latest genetically modified offering in the form of an insect-protected corn technology called YieldGard Rootworm, criticized the report as biased and lacking a clear view of the company's strategy.

"Our take on the Innovest report is that it is highly biased and cherry-picked information about Monsanto and biotech in order to further a political agenda," said Monsanto spokeswoman Lori Fisher.

R.T. Jones analyst Juli Niemann said Monsanto's cautious approach to its biotech offerings was keeping it in line with market demand and helping it avoid potential pitfalls.

"Monsanto has always been very, very careful," said Niemann. "I don't think they're headed for any disasters."

While Monsanto does not expect large sales this year of its newest biotech corn, which is being sold in the U.S. and Canada, and has import approval in Japan, the company has said it sees significant demand for the rootworm corn in the future.

Monsanto announced Tuesday that is was extending its marketing reach for the new corn through a licensing agreement with DuPont and its subsidiary, Pioneer Hi-Bred International Inc., that offers the Monsanto technology in Pioneer hybrids.

The National Corn Growers Association is supportive of Monsanto's efforts and said that to date its products have been beneficial to farmers and consumers.

"The technology has brought us positive environmental impacts, reductions in labor costs and a higher quality product," said association spokesman Tom Slunecka.

Monsanto has been working to refocus its revenue growth on the sales of biotech seeds and traits as competition steadily eats away at profits in the herbicide business, which traditionally gave Monsanto the bulk of revenues.

But the company has struggled financially of late, losing $1.7 billion in 2002, and capping the year with the unexpected resignation of Chief Executive Hendrik Verfaillie.

Monsanto stock has lost about half its value in the last year and was down .04 cents at $15.96 in afternoon trading on the New York Stock Exchange (News - Websites).