What exactly is Monsanto as a company which refused USD62 billion from Bayer

Publish time:6/2/2016 12:00:00 AM      Source: CCM
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John Francis Queeny would never expect that Monsanto could become such a genetically modified giant with the market value of USD50 billion when he founded Monsanto in the last century. What’s more unexpected to John Francis Queeny is that the company named after his wife’s family name-Monsanto, received so much revilement from the public in the future.


Monsanto’s founder: John Francis Queeny


There were few companies like Monsanto, towards which the public had extremely different attitudes. Both reviling and admiring were full of its long way development. On the bright side, the agrochemical products from Monsanto can greatly improve the output of crops and kill pests. However, Monsanto always got involved in significant environmental events, such as when the American forces applied “Agent Orange” in Vietnam War, which caused birth defects; and when the rice bran oil poisoning incident happened in Japan.


In the past twenty years, Monsanto was even facing demonizing from the public when it is expanding its business of genetically modified crops (GMC).


On the contrary, Monsanto also has quite a lot of admirers. They believe that Monsanto’s innovation on seeds was good news for human beings to deal with food crisis.


In 2013, the Oscars in agriculture - Prize for World Food Safety awarded the senior officials in Monsanto and two industry-related scientists for their efforts in promoting GMC.


Though the controversies keep on and on, Monsanto has been coveted by quite a few giants, thanks to its patents and potential development in the agricultural field.


Recently, Bayer intended to acquire Monsanto with USD62 billion; however, Monsanto refused Bayer and claimed that the offer was too low.


So, what is inside Monsanto? Does it really worth USD62 billion?


From saccharine supplier for Coca-Cola to chemical and agrochemical giant


In 1901, John Francis Queeny founded Monsanto in St. Louis, Missouri and named it after his wife’s family name. In the first three years, saccharine, the major product from Queeny’s father in law, Emmanuel Monsanto’s company, became the only product in Monsanto.


Bottles of Coca-Cola in the early twentieth century


With the rise of Coca-Cola, Monsanto earned its “first bucket of gold” for providing saccharine for Coca-Cola. Later, the products from Monsanto expanded to caffeine and vanilla additives from saccharine.


In 1928, John Francis Queeny’s son Edgar Queeny inherited Monsanto and Monsanto began to develop towards the chemical field. In the second half of the twentieth century, Monsanto become a giant in producing chemical products like chemical fertilizers and plastics. And the notorious chemical and biological weapon “Agent Orange” was produced in the period.


Vietnam War, American forces spraying “Agent Orange”


Monsanto together with other companies produced “Agent Orange” for the American forces in Vietnam War. During the war, the American forces applied this kind of defoliant to fight against the Vietnamese soldiers and it had polluted most of the forests in Vietnam. Due to the high toxicity and stability of 2, 4, 5-trichlorophenoxyacetic acid in “Agent Orange”, a great deal of soldiers and Vietnamese people are still suffering from the sequel of the application of “Agent Orange” till now.


During the time Monsanto was handled by Edgar Queeny, the high toxic products produced by Monsanto like DDT, BGH (Bovine growth hormone) and PCBs were all controversy. In the meanwhile, Monsanto’s key product “Roundup” was produced. Currently, the “Roundup” products have been popular for over 30 years and became the herbicide which captures the most market share in the globe.


It was another turning period for Monsanto from 1996 to 2000. In 1996, Monsanto first GMC entered the market. In 2000, Monsanto merged with Pharmacia & Upjohn Inc., a pharmaceutical producer. Two years later, the group’s agricultural activities were spun off into a new Monsanto. Till that time, Monsanto turned into an agricultural biological breeding company from pharmaceutical and chemical enterprises.


Since 1996, Monsanto has had around 20 times of acquisitions and most of them were about seed companies. The GM seeds owned by Monsanto have expanded to corn, cotton, wheat from soybean. Since 2005, Monsanto even spent over USD2 billion buying two vegetable-seed companies, including Seminis, the world’s largest vegetable supplier.


In fact, it is exactly the GM that made Monsanto more resented. Together with the previous high toxic products, Monsanto was beyond notorious in the public.


The Harris Poll about Corporate Reputation Quotient in 2014 showed that Monsanto was listed in the third from the bottom after Halliburton, with the score just a little bit higher that British Petroleum (BP) which spilled petrol in the Mexican Gulf and Bank of America. 


Since 2013, every year around May 20, the “Anti-Monsanto Parade” was held in over 400 cities in over 40 countries, from America, Africa to Europe. Thousands of people were on the street to protest against Monsanto’s GMO, herbicides and other chemical products.


Debate on GM


The commercialization of GM has become one of the biggest trends in the world’s agriculture development, though part of the public was protesting GMO.


U.S. Department of Agriculture stated in 2013 that 90% of corn and cotton and 93% of soybean were genetically modified in US in 2013.


In April 2016, International Service for the Acquisition of Agri-biotech Applications (ISAAA) stated that it had been 20 years for the commercialization of GM since 1996. During these 20 years, the cultivation land used for GMC in the world reached to 2 billion ha and the total income for the farmers was over USD150 billion. Currently, 11 GMCs were cultivated in 28 countries.


Although debates on GM go on and on, there are no controversies on whether GM is harmful for people’s health. US National Academy of Sciences, American Medical Association, World Health Organization, Royal Society, European Commission, American Association for the Advancement of Science and other institutes all once conducted literature survey on GM and found no evidence to prove that there were safety problems about the GM foods in the market.


For public outreach, different authorities keep publishing reports on GM food safety. According to the brochure published by Royal Society recently, GMC would not do harm to the environment and GMC is safe for people to eat.


To tackle food crisis, agriculture would cooperate more and more with biology and chemistry to improve the output of crops in the future.


Currently, Monsanto’s innovations fall into two categories. The first is breeding; the second is genetic modification. Monsanto has 30 R&D centers and over 250 breeding areas all over the world.


As the first company to promote GMC, Monsanto captures the most market share – about 80% of the corn and over 90% of the soybeans in US were cultivated with Monsanto’s seeds. In addition, Monsanto owns about 1,700 patents. According to its 2015 financial report, Monsanto’s sales volume was USD15 billion. Among this, the sales volume in its seed and genetic departments reached around USD10.2 billion.


The value of GM also lies in the control on weeds and insects. All of the seeds in Monsanto are resistant to Roundup products. That’s to say, when Roundup products are applied on the field to kill weeds, the crop itself would not be affected. In addition, recently, Monsanto are promoting two kinds of GM seeds, which are Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans. Both of the seeds could help improve yields by 8% per year while in the past several decades, the yields of soybean only improved 1% annually.


Nowadays, the world is facing the problem of water shortage. Monsanto plans to promote “drought tolerant” products, which could be cultivated in dry areas.


*This article is sorted, edited and translated by CCM.

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