The Ethics of Selling Crop Seed: Part 2 – GMO Seed

Picture of Soybean Seeds


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.

You are welcome to comment on this post or you can email me at [email protected].  I try to answer comments both on the site and by email so you don’t have to check back (If you don’t want me to email you just just don’t enter your address into the system).

I don’t know what is going on with this site, but there is not the normal way for folks to comment.  I’ve written to the guys in charge, but no response so far.  If you would like to comment just send me an email at [email protected] and I will both answer and edit it into this post until the issue is fixed.

Thanks, Steve

Soybean seed image from forestryimages.org.

  1. rich EE

    Hi Steve ,

    I appreciate your attempt at explaining this difficult and potentially troubling field in layman’s language .

    I would like to state my concerns about 2 potential problems with GMO crops .

    1] The lack of labeling presents some potential dangers to some individuals with allergies .
    Eg . when someone developed a GMO brazilnut years back , they did it by combining genes from the peanut plant with the brazilnut . The idea
    was to add N2 fixing to the nuts . The problem showed itself when some people with peanut allergies reacted to the GMO brazilnuts .

    2] Years ago some government body gave the GMO industry very limited liability against damages caused by their products . This is an economic largesse that very few industries get . Not surprisingly , other industries and the public
    at large are suspicious of that “free ride” given to the industry .
    Why was such an exemption necessary ?

  2. Steve Savage

    Rich EE

    Thanks for the feedback.

    Actually the Brazil nut example is a big positive for GMO, but that is not the way it is portrayed in the anti-GMO space.

    The original goal was to increase the lysine content of corn. The reason that the corn/bean diet was successful for native Americans for centuries is that the beans made up for the lysine deficiency in corn protein (Lysine is an “essential amino acid” meaning it is one that we have to eat because we can’t make it ourselves. Corn is low in Lysine).

    Researchers knew that Brazil nuts were very high in lysine so it was logical to use the seed storage protein from that plant to increase the lysine content of corn. These researchers also knew that some people were allergic to Brazil nuts, but no one knew exactly what was the allergen. Once they had isolated the gene for the high lysine seed storage protein and expressed it in a model system they were able to check to see if it was the allergen. It turned out that it was and the corn project was stopped -many years before it would have been commercial.

    In the blogosphere this is represented as some sort of “close call” or something that actually happened and is hurting people. It is actually a great example of how rational genetic modification can work safely.

    As for the limited liability, I’m not sure what you are referring to. As for the “damages” caused by GMOs I also don’t know of any documented cases.

  3. suyash

    it seems like you are part of the GM lobby or are employed by a GM company. GM food and cash crops are bad for farmers, consumers, and the environment due to the following reasons:
    1. Most GE crops being grown in the world today (more than 80%) are engineered to tolerate the application of broad spectrum herbicides like glyphosate or glufosinate. Due to this the use of chemicals in agriculture has increased, as evidence from the USA and other countries shows.
    2. In 2007, GM Maize was ready to be introduced in Europe. The EU authorities had already declared it as safe for human consumption. An independent research org, CRIIGEN carried out an experiment where a group of rats was fed GM Maize for 90 days, where another group was fed regular Maize. 60 significant differences were shown in the 1st group – in their kidney, brain, heart and liver measurements, and weight differences.
    3. Research has shown that many GM crops like Bt. Cotton in India, requires much more irrigation than regular crops.
    4. Many others cross-breed with other plants to destroy the ecosystem of the surrounding areas.
    5. IN India, costs of GM cotton seeds is 230% that of regular seeds, but the increase in output has been only about 2%, much less than promised. This has been a significant cause of suicides. To suggest that govt compensation to families after a suicide is the cause of suicide is ridiculous.
    6. Monsanto, the world’s largest GM seed manufacturer and also manufacturer of pesticides & herbicides, spent $8.8 million for lobbying in 2008. Monsanto gave $186,250 to federal candidates in the 2008 election cycle through its political action committee (PAC). Besides,
    Justice Clarence Thomas worked as an attorney for Monsanto in the 1970s. Former Secretary of Defense Donald Rumsfeld was chairman and chief executive officer of G. D. Searle & Co., which Monsanto purchased in 1985. Rumsfeld personally made at least $12 million USD from the transaction. Dr. Michael A. Friedman was a deputy commissioner of the FDA before he was hired as a senior vice president of Monsanto. There’s a term for this – its called conflict of interest. If GM technology was actually “good”, why all this bribery and corruption???

    Awaiting your reply..

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