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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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RE: Monsanto has no future
By Ringold on 3/1/2012 7:05:21 PM , Rating: 0
Their business model is completely outdated

Rising global prosperity and changing weather patterns make GM seed more important every day. Facts are facts, and it's nearly impossible to reach the levels of yield made possible by GM seed. To rage against GM seed is illogical, Luddite, and it would condemn millions to malnourishment. There's also very little different from quickly creating GM strains to more slowly doing it via careful crossbreeding after many generations in principle.

Monsanto's stocks have taken hits year after year

Monsanto's stock has held up relatively well, roughly following the commodity boom in mid-decade and come down some as prices fell. But, if you'd bought it ten years ago, when it was around $8 a share, you'd still be pretty frakin' happy.

their revenues are declining

Looking at their annual reports going back to 2005, it resembles their stock price, and matches, again, the commodity boom pre-recession. Since the recession it bottomed, and has been rapidly increasing off that bottom, within a year or two of making new highs if current trends hold. Monsanto had 1 year of declining year-over-year revenue since 2005 and you paint it as a stark negative?

Are you allergic to fact, or just facts that dont agree with your agenda and baseless hate? I mean, how dare farmers buy seed that helps boost their yields and ultimately make their families more money. Farmers wouldn't buy it otherwise. Being dependent on MON is a known risk, but that's no different then any other industry with a "razor and blades" sort of model.

Cutting to the heart of the agenda: The hard-core left hates GM food because cheap food and cheap energy are equally evil in their world where humanity is a scourge upon sacred mother Earth, a scourge to be contained, minimized, and removed where possible. Therefore, Monsanto=Exxon.

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.

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