US: Monsanto's Dominance Draws Antitrust Inquiry

- Peter Whoriskey , Nov, 29, 2009

The vast majority of the nation's two primary crops grow from seeds genetically altered according to Monsanto company patents. Ninety-three percent of soybeans. Eighty percent of corn. The seeds represent "probably the most revolutionary event in grain crops over the last 30 years," said Geno Lowe, a Salisbury, Md., soybean farmer.

But for farmers such as Lowe, prices of the Monsanto-patented seeds have steadily increased, roughly doubling during the past decade, to about $50 for a 50-pound bag of soybean seed, according to seed dealers. The revolution, and Monsanto's dominant role in the nation's agriculture, has not unfolded without complaint. Farmers have decried the price increases, and competitors say the company has ruthlessly stifled competition.

Now Monsanto -- like IBM and Google -- has drawn scrutiny from U.S. antitrust investigators, who under the Obama administration have looked more skeptically at the actions of dominant firms. During the Bush administration, the Justice Department did not file a single case under antimonopoly laws regulating a dominant firm. But that stretch seems unlikely to continue. This year, the Obama Justice Department tossed out the antitrust guidelines of its predecessor because they advocated "extreme hesitancy in the face of potential abuses by monopoly firms."

Monsanto says it has done nothing wrong. "Farmers choose these products because of the value they deliver on farm," Mon santo said in a statement. "Given the phenomenally broad adoption of these technologies by farmers, such questions are normal and to be expected." "During the same period, our competitors . . . largely ignored biotech," the company said in a statement. "Monsanto took risks our competition chose not to take."
Although farmers have grumbled about Monsanto's regular price increases for Roundup Ready technology for seeds, it is DuPont, a Monsanto rival, that has pressed the antitrust case.

Farmers and seed companies "are afraid to speak in public, worried that they will become victims of retaliation," Thomas L. Sager, DuPont senior vice president and general counsel, said in a statement. "That's why it's so important that antitrust investigators move quickly -- to learn the truth before even more harm is done to America's farmers."

In court papers, DuPont argues that Monsanto has used the dominance of the Roundup Ready brand to prevent competitors from bringing innovations to market. Several farmers said the cost of Roundup Ready seeds seemed to rise faster than their own margins. But that doesn't mean, at least just yet, that they'll stop using them. "Everybody likes Roundup Ready," said William Layton, a grain farmer on the Eastern Shore. "Maybe it costs a little more than we like. But everybody's going to keep using it."