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Company argues it's not "out to get" America's small population of organic farmers, cites lack of lawsuits

Monsanto Comp. (MON) is a firm with a long and controversial history.  It is accused of abusing intellectual property rights to sue small farms (allowing its patented crops to blow seeds onto their properties, then suing them); trying to bribe officials in Canada and Indonesia [1][2]; and suing dairy farmers who advertise that their milk doesn't contain growth hormones.  They also were the company responsible for spraying Agent Orange all over soldiers in Vietnam, which is thought to have led to cancer and other ailments.

I. The Farmers Sue Monsanto

Those criticisms are unlikely to go away, particularly in the wake of a controversial decision by The U.S. District Court for the Southern District of New York, a federal court.  Judge Naomi Reice Buchwald moved this week to throw out a potential class action lawsuit [1][2][3], sought by small independent farmers.

In the case the farmers, led by lead plaintiff Bryce Stephens, sought relief against Monsanto in the form a prohibition on Monsanto from bringing suit against organic farmers regarding seed contamination, given the really real possibility of cross-pollination via the wind and animals.

Mr. Stephens, who received degrees from Wichita State University (Kans.) and Washburn University (Kans.), turned away from a potentially lucrative career in law to instead run an 1,000 acre family farm that has been organic since 1994.  But Mr. Stephens states that he was unable to grow organic soybeans -- a high demand crop -- for two reason both tracing to Monsanto's transgenic crops.

First, he says that his neighbors grew the transgenic strain.  When other farmers in the area took their soybeans to be genetically tested, they test positive for Monsanto's patented genes -- the Monsanto crop had spread its germ into their fields.  As bulk buyers who supply such mega-health food chains such as Whole Food Market, Inc. (WFM) test for transgenic genetics, this would have made his crop essentially worthless.  It is estimated that between 0.5 and 2 percent of "organic" corn is really genetically modified.

Whole Foods Canola oil
Pollen contamination from neighboring farmers who use Monsanto's seeds can see an organic farmer's product banned from big buyers like Whole Foods Market.
[Image Source: Getty Images]

Second, there was the implied threat that even if he did try to sell his organic crop to various small buyers that Monsanto might sue.  He writes, "I have long been aware of Monsanto's campaign of patent accusations against farmers.  This has been well publicized in news reports and documentaries about the farming industry that I have read and seen.  I have also personally contributed support through certain organizations to help a specific farmer that was sued by Monsanto for patent infringement."

Now Mr. Stephens and his fellow organic farmers had several legal options at their disposal -- for example, they could have sent a legal cease and desist letter Monsanto to try to prevent future suits.  Instead, their attorney Dan Ravicher (the lead attorney) of the Public Patent Foundation opted for a novel approach -- file a class action suit looking to put in place a "laws of nature" based preliminary injunction that would prohibit Monsanto from suing small farmers for seed contamination, or at least put restrictions on the practice.

The class was expected to grow to at least 3,000 organic farmers, had it been authorized.

II. But Were the Tables Really Turned?

However, things were killed before they even took off.  The judge apparently took issue with the fact that none of the farmers had been personally threatened by Monsanto, and the fact that Monsanto only brought a small number of patent infringement suits last year.

The company successfully argued that the suit was pointless as its policy was not sue if "trace" amounts of patented seed were found on an organic farmer's land.

Wrote the judge, "[the allegations] are unsubstantiated ... given that not one single plaintiff claims to have been so threatened."  She also complained that the farmers had "overstate[d] the magnitude of [Monsanto's] patent enforcement", which documents indicated entailed 13 cases last year, which she opined "is hardly significant when compared to the number of farms in the United States, approximately two million."

Of course, that ruling does overlook the fact there are only 13,000 organic farmers in the U.S., out of those 2 million [source].

Dan Ravicher, executive director of the Public Patent Foundation and lead lawyer for the plaintiffs said the ruling will allow Monsanto to continue "patent bullying" and called it "gravely disappointing."  

Soybean farm
Farmers were unable to convince a federal judge that their farms were endangered by Monsanto. [Image Source: Katherine Leigh Photography]

It appears Monsanto has been tentative in terms of probing suits towards organic farmers whose fields contain small amounts of "Round Up Ready" soybeans (which produce their own pesticides) or other patented corn, soy, canola and cotton crops.  Most of the farmers sued in the U.S. have been traditional farmers who refused to pay Monsanto's seed fees, but were found with substantial amounts of Monsanto seed growing on their land.  These farmers have traditionally argued foul play, but it's a murkier situation as -- unlike the organic farmers -- they could potentially gain financially by illicitly using Monsanto's crop (as their buyers don't care about GMO content).

Monsanto did try one high profile organic farm suit in Canada, and won.  It scored a $400,000 USD damages payout.  However, Percy Schmeiser took Monsanto to the Canadian Supreme Court.  The highest court in Canada ruled that Monsanto's patents are valid (in Canada), but that it could not enforce the damages due to the ambiguity.  Mr. Schmeiser tells his side of the story in an audio recording on his homepage.  Monsanto, meanwhile, paints the farmer as a liar and villain here [press statement].

III. Future Uncertain

The company insists that it doesn't see itself as an aggressor towards organic farmers.  Writes Monsanto executive VP David F. Snively, "This decision is a win for all farmers as it underscores that agricultural practices such as biotechnology, organic and conventional systems do and will continue to effectively coexist in the agricultural marketplace."

While both sides have very different views, the U.S. Department of Agriculture's Advisory Committee on Biotechnology in the 21st Century is taking the organic farmers' concerns seriously in recent hearings, where they're discussing how to handle these tricky patent issues.

USDA sticker
The USDA that certifies (and stickers) organic produce, is concerned about the issue of pollen contamination. [Image Source: The Healing Kitchen]

Doug Gurian-Sherman, a senior scientist with the Union of Concerned Scientists, told NPR's food and agriculture blog The Salt, "Beyond whatever happens with this suit, there are some very legitimate issues behind it.  There is already a significant burden to organic food production, and there is more coming. It raises the question: Is it possible for organic agriculture to survive in the face of GM crops?"

Dan Ravicher is considering whether to appeal the dismissal, on behalf of the farmers.

Sources: Public Patent Foundation [1], [2], Monsanto

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Monsanto has no future
By Amedean on 3/1/2012 5:04:58 PM , Rating: 2
Their business model is completely outdated and their product image has declined to that of the tobacco companies. Monsanto's stocks have taken hits year after year and their revenues are declining as many other countries continue to ban their products so any aspiring farmer would hesitate to invest any form of reliance on their strings attached products.

RE: Monsanto has no future
By ClownPuncher on 3/1/2012 5:43:15 PM , Rating: 5
It couldn't have happened to a nicer group!


RE: Monsanto has no future
By Samus on 3/2/2012 12:27:10 AM , Rating: 5
Isn't this the company that invented Agent Orange?

They're fucking assholes.

RE: Monsanto has no future
By Mark Shapiro on 3/2/2012 4:53:03 AM , Rating: 3
Spot on Samus! Couldn't agree with you more!

RE: Monsanto has no future
By Ringold on 3/2/2012 10:37:57 AM , Rating: 2
Right, guys. It was Monsanto employees that ordered its mass production, over the concerns of some of its inventors, transported it to Vietnam and loaded it in to Monsanto aircraft where Monsanto pilots dumped it over the countryside.

That's like blaming Mikhail Kalashnikov for people being shot, at least in my mind. I don't see how it's any different at least; the government gets and does what it wants.

RE: Monsanto has no future
By TSS on 3/1/2012 5:45:23 PM , Rating: 4
Heh if you go watch the new documentairy from alex jones blueprint of madmen, tobbaco companies look like saints. Monsanto is basically the scourge of the earth. His documentairies are overtly dramatic though.

Even so, i don't think monsanto is finished anytime soon. With bill gates backing it and the US government pushing it, they'll have quite some time left in them yet.

Which is a shame. Ohwell. Ima go watch another documentairy, about how farmland is being restored in india from something called the first green revolution? Guess it'll be explained later. One man one cow one planet it's called.

I really do wish they'd make those documentairies a bit more... rational. Less melodramatic. I can reject/accept ideas without being screamed at.

RE: Monsanto has no future
By Reclaimer77 on 3/1/2012 6:05:51 PM , Rating: 2
I really do wish they'd make those documentairies a bit more... rational. Less melodramatic. I can reject/accept ideas without being screamed at.

Agree. I pretty much don't watch documentaries anymore because they all lack integrity. The point of them seems to convince you to agree with the writers/directors premise. Not actually be presented all the facts so you can make your own opinion.

RE: Monsanto has no future
By kattanna on 3/2/2012 11:11:47 AM , Rating: 4
The point of them seems to convince you to agree with the writers/directors premise. Not actually be presented all the facts so you can make your own opinion.

whether its documentaries or the news, that comment sadly applies all to often nowadays.

RE: Monsanto has no future
By tigz1218 on 3/2/2012 10:38:02 AM , Rating: 1
I don't understand why you two got voted down...Suggesting people watch documentaries isn't a bad idea at all.

Maybe Monsanto pays people to monitor these boards!

RE: Monsanto has no future
By KaTaR on 3/1/2012 6:47:13 PM , Rating: 4
The facts in your statement are completely wrong.

Monsanto revenues hit an all time high in 2011 ($11.8bn) and are expected to grow a futher 10% in 2012 ($12.9bn). Monsanto's market capitalization ($43bn) is up over 700% since its initial listing on Oct 18, 2000. The S&P 500, on the other hand, is within a percent of where it was on Oct 18, 2000.

Blurting out wildly incorrect information just makes you look like an idiot. Try spending two minutes checking your infor next time.

RE: Monsanto has no future
By Amedean on 3/2/2012 9:54:34 AM , Rating: 3
I have to appologize because my facts were based from early 2011, but we are both misleading, however you are more misleading.

Click on the max projection to view the IPO shares from initial listing. Due to the bettering economy many companies are doing better including Monsanto. However, the dramatic decrease in the recession is slowly being recovered and will take further hits when oil climbs again as their petro products will become more costly.

All time high is in 2008, not 2011.

Click on 10Y for more accurate projection as you can see they have gone down from 63 billion capital markets in 2008 to 43 in 2011. 20 billion loss is no small loss.

My facts are mostly proven other than my mistake but I have references, though you have a higher rating in this thread my facts have references and are concrete.

RE: Monsanto has no future
By KaTaR on 3/2/2012 12:25:00 PM , Rating: 2
My figures are correct. The first day Monsanto traded was Oct 18 2000 and the price closed at $8.48, as of this moment it is trading at $80.9, that is a 850% return. The S&P 500, a broad gague of US listed companies, is basically trading at the same price as the day Monsanto listed close to 11 years ago.

Just because the market cap is below its pre-Lehman high does not mean the business is in decline. Microsoft's market cap hit its all-time high in 2000 during the tech bubble, revenues and profits have more than doubled since then but under your flawed logic that would have been a 'decline'.
You said their revenues are 'declining' and that is plain incorrect. Like I said, Monsanto revenues hit an all-time high in 2011 and are projected to hit a 10% higher all time high in 2012. That is not 'declining' by any stretch if the imagination, its called 'growth'. If people werent buying their products their sales would not be growing. Your post is wrong and if you need further explanation as to why you need to go back to elementary school.

RE: Monsanto has no future
By Amedean on 3/2/2012 2:13:42 PM , Rating: 2
I originally projected the trend and you countered with Monsanto's initial IPO in comparison to last more recent IPO without understanding or reflecting on historical aspects relating to the industry, culture or even recent events.

RE: Monsanto has no future
By DarkUltra on 3/2/2012 5:02:48 PM , Rating: 4
You have good points, but calling people idiots or telling them to go back to elementary school sours the mood. Be courteus and professional. Thank you.

RE: Monsanto has no future
By DT_Reader on 3/1/2012 6:54:45 PM , Rating: 3
It's not Monsanto's customers who have the problem, it's their customer's neighbors.

What I can't understand is how a farmer who is not a Monsanto customer, but whose neighbor is, can be held liable when Monsanto seed is found on their land. If they're not a Monsanto customer, how else did that seed get in their field, other than it simply blowing over the fence? When these farmers are found liable for royalty payments to Monsanto, are they also charged with criminal theft of the seed in the first place? I mean, either they bought it (Monsanto says they didn't), or they stole it (lack of criminal prosecution would indicate they did not), or it blew over the fence. Occam's razor. You may as well find the Wind an accessory to the "crime."

RE: Monsanto has no future
By Ringold on 3/1/12, Rating: 0
RE: Monsanto has no future
By Ringold on 3/1/12, Rating: 0
RE: Monsanto has no future
By Amedean on 3/2/2012 10:11:17 AM , Rating: 2
hard-core left hates GM

The most telling detail saved for last. Clearly explains the source of bias - bigotry.....

If you studied soil science or poly culture farming, you will understand why GM products are not the solution but a patch. Its a myth that the food crisis right now is a matter of lack in supply - it is really lack of distribution and inefficiencies.

Other than that, your market analysys is not to far from the truth but a bit selective due to your bias. To be fair I have my own but I am also a bit more of an expert opinion in the market.

RE: Monsanto has no future
By Ringold on 3/2/12, Rating: 0
RE: Monsanto has no future
By Amedean on 3/2/2012 1:59:59 PM , Rating: 5
There is a reason why we as farmers and food advocates do not like GM crops and Monsanto.

Biodiversity - The extinction of tens of thousands of apples, oranges, tomatoes, many you have never tasted are thanks to the lack of seed saving by individual farmers depleting our food resource to a few cultivars. Study genetic engineering (my brother did) and you will understand what happens next in ecosystems.

Patents on life - against my religion (christianity). Too deep to discuss.

Untested safety - study biochemistry and you can better understand how a GM corn that kills caterpillars in no way can have no effect at all in humans with prolonged use in a lifetime. Very summarized but deep discussion....

Lack of sustainability - I am surprised home many people think sustainability is a bunch of hippie fairy dust - lack of education. Look up Bill Mollison and his works.

There is more to add but I dont have the space or time to summarize my years of research and growing experience on the issue to any degree of justice, but it is in books, research papers or on the internet if you look hard enough. If you want healthy children and value your family I would suck in your pride a bit more and open your ears to the people you normally do not listen to.

RE: Monsanto has no future
By The Raven on 3/2/2012 2:34:07 PM , Rating: 2
anti-GM fervor
I think much of this is misinterpreted like when people who are against illegal immigration are essentially personified as anti legal immigration.

It is not that these people are necessarily all opposed to GM in general, but when other small independent (probably organic) farms have to deal with such legal issues when they want nothing to do with it, it becomes a problem. Especially when these smaller players in the market are already looking at a difficult climb to success compared to the big boys like Monsanto's customers. (as mentioned in the article)

And yeah pretty much all famine in the world is political.

RE: Monsanto has no future
By Starcub on 3/2/2012 2:44:50 PM , Rating: 2
when the bastion of anti-GM fervor is the same Europe that hates nuclear with an illogical passion, it doesn't give me much confidence

Just so you know, nuclear was about on par with solar in terms of cost viability in the US mass market, at least this was the case a few years ago when I last looked in to it. Namely, it wouldn't be a viable energy alternative without massive govt subsidy. In the US at least, the technology currently being employed reached state of the art status decades ago, however, waste storeage is still a problem in the US due to govt regulatory requirements and inability to effectively implement solutions themselves. As a result this cost, in addition to capitol costs is also subsidized. I know that they use newer tech in European plants, but they also have less regulatory requirements.

The only reason we are getting new nuclear here in FL is because our state legislature allowed the power company to pre-charge current customers for future development. Otherwise, they would have had to have gone to the 'free market' to fund development where nobody wanted to touch it with a 10' pole.

RE: Monsanto has no future
By KaTaR on 3/2/12, Rating: 0
RE: Monsanto has no future
By Amedean on 3/2/2012 1:44:34 PM , Rating: 3
What you CHOOSE to believe is your personal choice and I cannot force my experience and expertise onto you - God bless our freedom! By the way, I am a farmer/engineer.

RE: Monsanto has no future
By Starcub on 3/2/2012 2:20:04 PM , Rating: 2
The most telling detail saved for last. Clearly explains the source of bias - bigotry.....

Bigotry on whose behalf? People who are knowledgeable know that GM food is inferior in quality to organic. One reason this is so is because, counter to what the article suggests, round up ready products don't produce their own pesticides, they are engineered to be resistant to certain pesticides. This means that more pesticides can be used, which consequently increases yields, but also makes the product more dangerous to consume.

People need to learn more about the food they eat. If they knew just how bad Monsanto is, and how cozy their ag departments were with these companies, they would demand more from their elected officials and penalize GM and traditional growers who incorporate GM products into their food.

2%? Organic farmers should be having a field day in the courts against GM companies.

RE: Monsanto has no future
By rwagen on 3/1/2012 9:55:59 PM , Rating: 3
Which business model is that? That of using our knowledge of science to produce plants naturally resistant to the pests that plague mono-cultures?

GMO is here to stay. It works and get this, it cuts down on the use of pesticides (see Bt-corn).

RE: Monsanto has no future
By bennyg on 3/2/2012 6:53:45 AM , Rating: 2
pfffttt... marketing line chalks up another victim.

You'd think with all their money that Monsanto would invest a bit more in using transgenic crops for the betterment of mankind... instead the golden rice project goes broke and they can pay for lawyers good enough to prove both that
a) farmers on nearby farms infringe IP by having wind blow pollen on their crops
b) farmers on nearby farms don't suffer loss by having wind blow pollen on their crops and not being able to pass "100% GMO free organic" tests


RE: Monsanto has no future
By Ringold on 3/2/2012 10:47:06 AM , Rating: 1
The article points out that "a)" doesn't seem to be an issue as they don't sue for trace amounts.

As for "b)", what is the neighboring farmer supposed to do, erect massive sails that stop all airflow? Is it that farmers fault his neighbor tries to cash in on the 'organic' craze? Just seems an unreasonable attack on people that aren't doing anything other than go about their business in a way that, the vast majority of neighbors, wouldn't be an issue to at all.

RE: Monsanto has no future
By Firebat5 on 3/2/2012 12:03:51 PM , Rating: 1

as a young farmer in the midwest, everything I have heard and seen backs up this post.

RE: Monsanto has no future
By connor4312 on 3/2/2012 6:50:41 AM , Rating: 2
Dunno, it seems to work well for Apple.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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