Published on November 18th, 2009 | by Steve Savage4
The Ethics of Selling Crop Seed: Part 2 – GMO Seed
This is a followup post that will attempt to address some additional, wide-spread myths about the commercial sale of seed. In this case the topic with be “GMO” seed improved through genetic engineering (an industry that is now 13 years old and which has been planted on well over 2 billion acres cumulatively, much of it in the developing world). As someone with substantial direct experience with this industry over the years, I’d like to try to speak to some distorted perspectives on this technology.
The First Biotech Crops
The four earliest commercial biotech crops commercialized in 1995/1996 were squash (virus resistant), corn (insect resistant), potatoes (insect resistant), and soybeans (herbicide tolerant). For the squash, corn and potatoes, commercialization was straight forward because it was already standard practice for farmers to buy new seed (tuber seed pieces in the case of potatoes) each year.
For soybeans there was a major commercialization challenge. There was no question that the new technology was valuable — it would displace millions of pounds and hundreds of millions of dollars of herbicide sales. It would also greatly increase the efficiency and convenience of producing soybeans. The challenge was that it was standard practice at the time for farmers to save-back some of their crop to use as seed the next year – more in some geographies than others. If this practice were to continue with the new herbicide tolerant soybeans, it would have been very difficult for the company to recover its high risk investment in the new technology. Growers would simply buy seeds the first year, and then be set until they wanted to buy a new variety. This is not so different from the challenge that record labels with illegal file sharing via the internet.
The two standard solutions that most expected were either (a) charge enough upfront to make up for pervasive seed savings, or (b) raise the price of the herbicide to recover the genetic investment in that way. The first would have discouraged adoption; the second would have disrupted other crops and uses that also depended on the product. Instead, Monsanto tried something completely new (at least to the seed industry). They decided to charge a “technology fee” (“Tech Fee”) of a few $/bag and ask the farmers to sign a license agreement saying they would not save seed. This was a pretty radical step at the time. Monsanto also licensed the technology to many other seed companies and they too had to get growers to sign the licenses.
Farmer’s Defied the “Conventional Wisdom”
The conventional wisdom in the Ag industry was that farmers, a very independent bunch, would never go for these licenses and Tech Fees. Within a very few years all of this concern melted away. The technology was so attractive for the growers that they adopted “Roundup Ready” beans rapidly and Extensively. The acreage of no-till soybeans exploded and that enabled many environmental advantages (far less erosion, less fuel use…). Growers also found that planting soybeans specifically grown and stored for use as seed had yield and logistical advantages. Since then, the “Tech Fee” has all been shifted to “royalties” by the seed companies.
Yes, there were a few lawsuits in the early years. Monsanto and others really had no other choice. Just as with the music companies today, things can get out of control quickly. If Monsanto and other seed companies had not firmly addressed clear-cut cases of license violation, the entire mechanism would have collapsed, creating a perverse outcome in which only the honest farmers (the vast majority) would have been disadvantaged.
In the “green website and blogsphere,” this whole phenomenon is treated as if it represents a fundamental ethical breach. In fact, the “technology fee” is now just a royalty that is part of a mutually beneficial business-to-business sale. This works great in the parts of the world with a well developed system of farm credit and yield insurance combined with strong enforcement of contract law. In areas where not all of these elements exist, things were historically more complex and problematic.
Issues that Arose in Other Parts of the World
Things didn’t go so well in Brazil and Argentina where the technology was also jumped on by farmers, but in this case on an under-the-table basis. They simply began to use the technology for free in a way that is analogous to music file-sharing. This situation has since been mainly resolved so that the major farm production areas now compete on a more level playing field.
The other narrative that often appears in a not-so-accurate form is the story of suicides by Indian farmers. When Bt-cotton (resistant to certain caterpillar pests) was introduced into India, many growers were talked into buying more seed and other inputs then they could really afford by a local “industry” that we would describe as “loan sharks” of the Mafia school. If things went badly (as happens in any farming setting) the growers were highly pressured to pay-off their debt with threats of violence. It also didn’t help that the Indian government would pay the family a good deal of money if the death looked like a pesticide poisoning. Some desperate farmers committed suicide and biotechnology is blamed as if the corrupt lenders that created the debt traps and government program had no role. In fact Indian cotton growers still use the technology widely because it is to their advantage to do so.
What If Poor Farmers Don’t Want to Stay Poor?
It is difficult to transition a society from subsistence, very low input (and thus low yield) systems because so many supporting elements are needed. This is true for any input – fertilizer, seed, chemical or even biological controls, and equipment. That does not mean that this transition should not be made, as some believe. These well intentioned people are effectively saying to poor people, “you don’t deserve to get the benefits that can come with modern technology. You should stay poor and hungry.” I can’t accept that answer.
My next post will address the issue of the mythical “terminator” seed technology.
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Soybean seed image from forestryimages.org.