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.














