Indian agriculture is in crisis. Farmers are committing suicide and becoming poorer by the day. They are losing the battle, not with nature, which they have been in harmony with for centuries. Their battle has been with agricultural input companies. The stranglehold of agricultural input companies, across the world, on agriculture and farmers, is growing by the year. In India, in the last more than a decade, multi-national companies (MNCs) have started controlling the agriculture input companies, directly and indirectly, through patents, licensing and agreement-linked transactions over inputs. This is not a phenomena limited to India, but in fact, flowing into India from global changes.
The Big Six
Six MNCs control global industrial seed and agrochemical markets – Mayer, Monsanto, Dupont, Dow, BASF and Syngenta. They not only control markets, but also determine the priorities and future direction of agricultural research. Wherever their presence is huge, independent, farmer-oriented public sector research has gone down drastically. With collective revenues of more than Rs.4,38,427 crores world-wide in agrochemicals/seeds and biotech traits (2013 figures), these Big Six control:
• 75% of the global agrochemical market
• 63% of the commercial seed market
• More than 75% of all private sector research in seeds/pesticides.
European Union, many other governments, NGOs and activists, have raised concerns over control of markets and market shares by only these companies, scuttling competition and curtailing choices of farmers in seed selection and cropping options. Their profit-making strategies are not limited to selling only pesticides and seeds, as independent products. These companies extend their control through seed and pesticide packages. Way back in 1981, ETC Group (Action Group on Erosion, Technology and Concentration, then called RAFI) warned that the spate of crop-chemical companies taking over seed companies could lead to the development of proprietary plant varieties dependent on proprietary pesticides. By 1983, Ciba-Geigy (now Syngenta), was advertising its new seed-and chemical packages in farm publications. However, the world was introduced to herbicide-tolerant plant varieties – a proprietary seed and chemical package with the introduction of GM seeds in 1995.
Through seed and agrochemical packages, these companies try to eliminate rivals, restrict choices and in general, streamline farmer behaviour. Interestingly, the proprietary seed market is not as large as it looks. Even though it accounts for over 80% of the commercial seed supply, approximately three-quarters of the world’s farmers routinely save seeds from their harvest and grow locally-bred varieties. These MNCs are continuously working on strategies to chip away at this practice of seed saving by farmers. In its 2013 annual report, Monsanto lists seed saving farmers as an aspect of competition they are facing. They try to reduce this kind of ‘competition’ through policy lobbying, influencing domestic agricultural research and market incentives.
Packages, not only furthers their sales position, but also camouflages product failures. If a proprietary seed variety fails, they immediately bring in an agrochemical product as a saviour. Every crisis, caused by their own products, and natural disasters, are being turned to their advantage as they control research, trade and public policy debate. In 2008, as the global food crisis deepened, profits of world’s largest seed companies multiplied. Record-high commodity prices and depleted grain reserves translate to soaring demand for seeds and other farm inputs (fertilisers, pesticides, farm equipment, etc.). Monsanto’s 3rd quarter profits jumped to 42% in June 2008. The Wall Street Journal noted that the seed giant is already raising seed prices “to capitalise on the planting boom it expects next year.”
Genetically engineered seeds and increased revenues
For the top three companies, genetically engineered seeds account for a steadily growing proportion of revenues. Based on industry statistics, ETC Group estimates that Monsanto’s biotech seeds and traits (including those licensed to other companies) accounted for 87% of the total world area devoted to genetically engineered seeds in 2007. The company claims that it licenses its biotech traits to an additional 250 companies. In 2007, almost half (48%) of DuPont’s seed revenue came from products that carried a biotech trait. UK consultancy firm, Cropnosis, puts the global value of GM crops in 2007 at $6.9 billion.
For these seed and pesticide giants, it has always been a package deal – proprietary biotech seed traits depend on sales of the company’s companion chemical. Their technical achievement linked to profits is the introduction of genetically modified seeds that are tolerant towards weedicides. Today, over 80% of the worldwide area devoted to genetically engineered crops carries at least one genetic trait for herbicide tolerance.
Weedicides account for about one-third of the global pesticide market, and agro-chemical giants are increasing research and development on new herbicides and herbicide tolerant genes. Monsanto’s glyphosate-resistant (Roundup Ready) crops have brought sales and profits for over a decade – creating a near-monopoly for the company’s Roundup Ready herbicide. Furthermore, two GMO crops meant for biofuel (ethanol derived from GMO corn being the largest) boosted sales for the world’s largest pesticide companies the last few years – in large part due to the subsidy-driven boom supported by an infiltrated government.
Bayer in its 2014 annual report says, “In the area of crop protection / seeds, we research and develop chemical and biological crop protection agents and seeds for wheat, soybeans, oilseed rape / canola, rice, cotton and vegetables.” Monsanto in its 2013 annual report says, “Our biotechnology traits compete as a system with other practices, including the application of agricultural chemicals, and traits developed by other companies. Our weed-and insect-control systems compete with chemical and seed products by other agrichemical and seed marketers. Competition for the discovery of new traits based on biotechnology or genomics is likely to come from major global agrichemical companies, smaller biotechnology research companies and institutions, state-funded programmes and academic institutions.”
The mantra of agricultural productivity
These companies hang on to this package because their business runs on agricultural productivity. Yield and productivity arguments gives them the foothold in policies, and government support programmes. Decades back, it started with organo-chlorine compounds to protect crops from pests, and thus increase yields. Agri-business from then on hopped onto every ‘temporary’ solution from organo-chlorine to organo-phosphorous, synthetic pyrethroids, carbamates, and herbicides. In recent years, crop protection is now sold through genetic modification. However, so far, they could bring only two traits – herbicide tolerance and insect resistance. As long as governments are focused only on crop yield and productivity, and not on biodiversity and agro-ecological production, their business would continue.
Pest problem has never gone away, but agro-chemicals and proprietary seeds have increased the range of pest incidence on every crop. New bugs, viruses and insects are being reported across the world that were not known previously for such attacks. Super weeds and Super bugs in USA have become a menace.
As per a FICCI study, the Indian agrochemical industry is estimated to be `25,000 crores in 2014 and is expected to grow at a CAGR (Compound Annual Growth Rate) of 12% to reach `45,000 crores by 2019. Out of this, the domestic market is `13,000 crores. In India, in 2012, there were about 125 technical grade manufacturers, including about 10 multinationals, more than 800 formulators and over 145,000 distributors. Cotton and paddy are the major consumers of crop protection chemicals accounting for 50% and 18% respectively of the total domestic crop protection chemicals market. Fruits and vegetables also account for a significant share of the crop protection chemicals market. Pesticides are used variously on brinjal, okra, tomato, cabbage, cauliflower, chillies, capsicum, cucumber, green pea, bitter gourd, coriander, cardamom, fennel, black pepper, cumin, and curry leaves.
A study by FICCI (Federation of Indian Chambers of Commerce and Industry) goes on to say, “Major agrochemical companies in the world have reoriented themselves as agriculture companies, focused at chemistry and biotechnology based innovation to deliver better yield and quality of food. Companies like Bayer, Syngenta, Monsanto, DuPont and Dow Agro Sciences have both pesticides and seeds in their product portfolio. This orientation contributes to a broader perspective over the entire plant production system, because it integrates pesticide and seed technology development.”
To stamp out competition and profit from the trends, the largest seed and pesticide companies gobbled up a large number of smaller seed companies. As a result, four largest seed companies control nearly 60 percent of the global patented seed market, according to Mary Hendrickson of the University of Missouri. This fact constrains farmers’ choices.
In the US, with such control, seed companies charge excessively high prices for corn or soybean seed, and to supply pesticide-coated seeds exclusively, which contributes to those prices. David Widmar (agricultural economist) points out, using Purdue University data, corn seed prices have increased consistently since 2007. Before 2007, typically seed cost was 10 percent for farmers, it has averaged between 11 and 12 percent for the past six years, rising to almost 16 percent in 2014. Widmar believes it could account for a whopping 20 percent of farm profit in 2015.
In the US, about 80 to 100 percent of corn seed, and almost half of soybean seed, is coated with insecticides. It challenges the claim commonly made for years that Bt corn seed, which is genetically engineered to kill several types of pest insects, had dramatically reduced insecticide use. The United States Department of Agriculture (USDA), which records pesticide use, has not included seed treatments, so these pesticides were not accounted for. The amount used is likely lower, because it takes less insecticide to coat seeds than to spray onto crops, but the area covered (number of acres) is now much greater. About 30 percent of corn acres were treated with insecticides that was sprayed on or applied to the soil, now about 90 percent of corn acres are treated with coated seeds. This exposes more helpful insects like bees and other pollinators to these pesticides. The ability to patent engineered traits like Bt has also facilitated domination of the seed industry by very few companies, which facilitates the ubiquity of pesticide-coated seed. Practice of coating seeds in systemic pesticides has emerged in the past 10 years.
Bt cotton, a proprietary seed, has achieved complete domination in India, with Monsanto reaping enormous profits. On royalty alone, it has earned more than Rs. 2,000 crores in India. This year, in cotton season 2015, pink bollworm has ravaged cotton crops across India, indicating the failure of BG II proprietary seed of Monsanto. Farmers have lost their investments heavily, which is in addition to the losses they suffered due to low market prices from the previous season.
Governments all over the world need to wake up and curtail this kind of monopolies, which are destroying farming livelihoods, killing ecological diversity and degrading natural resources including land and water. Survival of life is at stake, when profits become the ultimate goal and commoditisation of life is allowed.