In the City: Monsanto risks playing villain again in Grant’s drive to feed the world

Bron: http://www.telegraph.co.uk/finance/comment/11718136/Rainmaker-Monsanto-risks-playing-villain-again-in-Grants-drive-to-feed-the-world.html

$45bn bid by Monsanto, the world’s largest seed maker by sales, for Syngenta, the biggest producer of crop pesticides and chemicals

Monsanto is an American farming giant

Monsanto is an American seed producing giant Photo: Getty Images

Is Monsanto the world’s most evil company? Its detractors certainly think so. On its way to becoming the world’s biggest seed-maker and supplier of crop chemicals, the American giant seems to have upset a lot of people.

And now, with its attempts to take over Syngenta, a Swiss rival, the St Louis-based agrochemical producer has generated fresh controversy among critics.

The face of this divisive corporation is Hugh Grant, a 57-year-old Scot who has been with Monsanto for more than three decades and at the helm for the last nine years.

Hugh Grant, chief executive of Monsanto

Grant has proposed a complex merger with Syngenta which would unlock billions in tax savings for shareholders by shifting the combined company’s headquarters to the UK.

This type of tax-driven takeover, known as a corporate “inversion”, soared last year as many companies rushed to beat an anticipated clampdown by the Obama administration.

Yet, it isn’t Monsanto’s attempts at tax avoidance that has sparked the greatest concern. The US company is already the world’s largest seed-maker by sales while Syngenta is the biggest producer of crop pesticides and chemicals. The $45bn tie-up would create a new agricultural titan with a disproportionate grip on the farming industry and the global food chain.

Today, Monsanto, for many opponents, represents all that is wrong with the modern food industry, a dystopian mix of industrial agriculture and biotechnology. However, the company’s controversial practices stretch back nearly 100 years to its previous incarnation as a producer of industrial chemicals, some of which – such as saccharine, aspartame, and dioxin, the primary poison found in Agent Orange – are among the most contentious potions ever concocted.

Monsanto moved away from chemicals into seed production and biotechnology in the 1980s and ultimately reinvented itself as an agricultural company, a move that opened the door to a wave of fresh controversy when it produced the world’s first genetically modified crop.

In 1996, the US giant invented a soybean resistant to glyphosate – the active ingredient in its “Roundup” weedkiller, the best-selling herbicide on the planet. The bean had been approved by the US Department of Agriculture but when Monsanto tried to introduce it to Europe, it grossly underestimated public concerns over genetically modified food.

Although there has never been any compelling evidence to suggest that genetically modified crops are any more harmful than conventionally grown food, the company found itself at the centre of an almighty public backlash. In the UK, where mad cow disease had led to heightened anxiety about modern farming, the storm over GM products was particularly fierce and a rebellion ensued. Big high-street chains including Marks & Spencer refused to stock GM foods, campaigners such as Greenpeace and Friends of the Earth accused Monsanto of trying to sneak ingredients into people’s mouths, and the British tabloids printed stories about “Frankenfoods” and “mutant crops”. Even Prince Charles described genetic engineering as akin to playing God.

Speaking to The Independent earlier this year, Grant conceded that Monsanto had misread public sentiment over GM technology when it was introduced two decades ago.

The company had made “the wrong call” by failing to rebrand itself in the aftermath of the botched launch of GM in Europe and had suffered as a result, he said.

Understandably for a company of Monsanto’s size and scale, it has sometimes found itself at loggerheads with the farming industry. The company’s advances in genetic engineering help farmers produce bigger crops of everything from corn to soybeans, potatoes and squash, varieties that are often resistant to herbicides, insects and drought. But some farmers complain these benefits come with high costs, including strict rules about how Monsanto’s products can and can’t be used, sometimes resulting in lawsuits against customers who fall foul of the company’s policies.

Now, there are growing concerns that a merger with Syngenta, a big competitor, will push up prices of seeds and pesticides even further.

Yet, perhaps the biggest obstacle to a deal between the two is Syngenta itself, which has emphatically rejected Monsanto’s overtures on the basis that its offer is too low.

Grant is unlikely to be deterred, maintaining a fervent belief in the role that companies like Monsanto must play in feeding the world’s growing population. “When you go from six to nine billion over the next 30 to 40 years there is no new land,” he told The Independent. “Can you do it without biotech? I don’t think so.”

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