Monsanto’s Response to the Associated Press Article on It’s Unfair Trade Practices

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A week or so ago we posted an AP article criticizing agricultural giant Monsanto, and exposing the unfair business practices they used to gain market share as part of our series on antitrust investigations into the practices of Monsanto and other seed giants. In the interest of, well, openness, we present the following post – Monsanto’s response to the AP article from their WEBSITE

A recent Associated Press article on Monsanto’s licensing agreements with companies missed the mark on the real facts behind our business and our licensing approach, including:

• Our business has grown tremendously over the years thanks to an early investment in biotechnology, adding new approaches to historic breeding, and a decision to broadly license the results of those investments to anyone who wanted them, including our biggest direct competitors. We understand this scale of success brings scrutiny.
• The growth of our business cannot be attributed to any forced use by customers or to blocking any competitors.  Our licenses enable the use of our traits; they do not require the use of our traits.  Seed companies and farmers are free to move completely away from Monsanto traits at any time. It’s a choice they make every single season. If competitors invented a more attractive option, the industry could move to it immediately.  Monsanto works hard to offer better and more valuable products because that is the only way we keep anyone’s business.
• A depiction that somehow our actions are hurting small companies is just plain wrong. The facts are no seed company has invested more in the last ten years to bring new seed products to farmers than Monsanto, and no company has done more to broadly license those inventions than Monsanto. This includes licensing both seed genetics and trait technologies. Monsanto led the way in making its inventions broadly available to other seed companies, while DuPont’s Pioneer Hi-Bred seed company historically followed a path of keeping all of their inventions to themselves and distributing them though dealers who are contractually prohibited from selling any competitive products.
• No company has done more to enable stacked trait product offerings than Monsanto. That includes licensing competitive traits as well. You can review our position on stacking here. For a complete list of current corn and soybean trait offerings click here. In visiting this link, you’ll see we’ve worked with a number of globally integrated companies to develop stacked trait products and offer them to growers.  We were also recently able to highlight the specific stacking rights Pioneer Hi-Bred has with our business.
• We do treat small local companies differently and for good reason. That said, if they wanted to make a stack, we are open to those discussions. Thus far, these discussions have occurred with integrated trait developers – not with small local seed companies because none have asked. Why do we do it differently? Because unless that small local company can gain regulatory approvals globally, every farmer growing corn or beans could be impacted by lower commodity prices due to the loss of export markets. Technologies that don’t have U.S. regulatory clearance and/or clearance in certain markets can disrupt trade, and you’ve seen a couple of examples of this over the last decade. It’s sad the quoted experts failed to point this obvious fact out.
• Our licensing agreements, which have been used to support the development of and availability of these products, are pro-competitive and have enabled literally hundreds of seed companies – including all of our major direct competitors – to offer thousands of new seed products to farmers. We do not believe there is any merit to these allegations about our licensing agreements.
• The comments of Neil Harl, which suggest that Monsanto controls 90 percent of seed genetics, don’t reflect reality. Monsanto does not control nor supply the underlying seed genetics at anywhere near this level. In fact, Pioneer Hi-Bred holds the leading position in the U.S. soybean industry with about one quarter of the seed market.  In corn, Monsanto’s brands are slightly larger than Pioneer with each of us supporting about one-third of the seed market.  Beyond these brands, hundreds of companies sell corn and soybean seed genetics in the United States. Today, some of our traits are widely used, including the Roundup Ready® soybean technology currently planted on 9 out of 10 soybean acres, only because we licensed the technology to hundreds of seed companies, including our major competitors, and no one has offered a better product to these seed companies or to growers.
• The comments from one of DuPont’s attorneys, David Boies, which suggest there is a requirement of licensees to destroy seed if there is a change of ownership, are absolutely false. Our standard agreements with licensed seed companies specifically provide them with an opportunity to sell out their inventory over a period of time, if they are acquired by another company. Our agreements would also not require a seed company to pay for a product they don’t sell.  Furthermore, the article fails to point out most of the companies we purchased were already using Monsanto’s proprietary breeding lines and traits.
• Importantly, while we are proud to serve farmers and seed companies alike, we recognize there are many choices for them to do business with – including hundreds of seed companies and multiple trait providers. Just take a look at the investor presentations of our competitors if you don’t believe us.