Inside the Greenhouses of Monsanto

Satan or saviour, sinner or saint?

There are few companies that polarise opinion more than Monsanto, the US genetically modified seeds group.

For the company’s opponents, it is a ruthless agricultural monolith, using technology to dominate the food chain with its genetically modified seeds, while keeping a tight grip on farmers over its seed patents and licensing agreements.

Its supporters, however, point to the company’s role in promoting agricultural productivity, and see it at the forefront of pushing up agricultural yields in the face of a growing global population.

Hugh Grant, Monsanto’s chief executive, is acutely aware of the dichotomy. Hardly the mould of a Bond villain, the down-to-earth Scot from Larkhall, southeast of Glasgow, acknowledges that the company should have engaged with a wider audience in the past.

“I think in hindsight that was wrong,” says Mr Grant, who adds that the difficulty in any conversation with the consumer was that few people know much about agriculture to start with.

However, he quickly admits that this in itself was an excuse. “You can’t frame this from a perspective of ‘you don’t know much about the subject’ because everybody has a visceral reaction to food,” he says.

In London to speak at a conference about ‘Feeding the world’ held by The Financial Times’ sister publication, The Economist, the 55-year-old adds that the company’s distance from the consumer was also an issue: “People buy brands and we literally don’t touch the consumer: there’s so much work to be done to demystify what GM is.”

Mr Grant’s comments reflect a growing awareness among large agribusinesses and food companies about the intensified consumer debate over the food we eat. GMOs and Monsanto, the largest seed company in the world, have been at the sharp end of those concerns, with heightened anxiety over the combination of food and technology.

Stacy Malkan of Friends of the Earth, says the dominance of Monsanto and other agribusinesses raises serious questions about the safety of the global food supply.

“People are concerned about corporate control of the food system and a few companies owning the DNA of the seeds for our most important food crops,” she says.

GM food labelling is set to be the next focal point of attack for the company’s opponents.

But if anti-GM groups, environmental activists and some in the farming community are harsh critics, there are probably as many supporters among shareholders and analysts.

In the decade since Mr Grant took over in 2003, net profits have ballooned from $267m to $2.5bn. Shares in Monsanto have risen more than 10-fold to $109, although they are about a third lower than its all-time high hit during the food crisis of 2008.

Having started in 1901 as the producer of saccharine, Monsanto was a producer of defoliant Agent Orange during the Vietnam war.

It commercialised the herbicide Roundup in 1976, and six years later, the company’s scientists were the first to genetically modify a plant cell. The company’s plant biotechnology segment grew through a series of acquisitions, culminating in the 1996 introduction of soyabean seeds resistant to Roundup.

By 2000, Monsanto’s last Roundup patent had expired, and as chief operating officer, Mr Grant turned the company’s focus more firmly toward seeds. The shift has paid off: in the business year to August 2013, the seed and genomics division generated nearly 70 per cent of the company’s $14.9bn in sales.

Mr Grant joined the company as a salesman in Scotland in 1981, spending 10 years in sales, product development and management before relocating to the group’s headquarters in St Louis, Missouri, as global strategy director of the agriculture division.

Last year, the company stepped up its efforts into so-called “precision agriculture” – the application of advanced GPS, data analytics and remote sensing to farming – with the near $1bn acquisition of Climate Corporation, a San Francisco-based data company.

Mr Grant becomes more animated when describing the new areas Monsanto is moving into, noting that its investments in research in enzymes and genetic information transmissions, as well as data analytics will help its core aim of increasing yields. “The end point is augmenting yield which I think is going to be desperately needed,” he says.

Bill O’Connor at asset managers Capital Innovations says Mr Grant had set the company up for future growth. “He’s really laid the foundation to grow the company because he’s reinvested in technology and science, and has enhanced their pipeline of products,” he says.

However, Doug Gurian-Sherman, senior scientist at the environmental group Union of Concerned Scientists, says large seed companies have helped to create an unsustainable system of agriculture that promotes soil degradation, increases the use of herbicides as weeds develop resistance and wider use of pesticides.

“The nature of what we need in agriculture may not support a business model like Monsanto’s in five to 10 years,” he says.

Monsanto’s critics have not deterred some members of the development community working with the company. Having seen the mistakes of the pharmaceutical industry, holding back drugs from the developing world, Monsanto is offering its innovations to regions such as Africa.

It has formed partnerships with the likes of the charitable foundations of Bill Gates and Howard Buffett – the son of Warren Buffett – the UN’s World Food Programme as well as US Agency for International Development.

Mr Grant is heartened by the number of smallholder farmers who are now using Monsanto’s seeds – about half of its 17m customers are small farmers. “I think that’s a cause for tremendous, tremendous optimism [for agricultural yields],” he says.

In spite of the controversy surrounding the company and its role in agriculture, it is clear that Mr Grant relishes his role.

“A lot of what we do in agriculture has meaning – there’s a relevance and applicability and it makes a difference,” he says, adding: “The corollary of that is that it puts us at the centre stage. There’s always a seat at the table and everybody has an opinion, but I would much rather be there than in something that was innocuous or irrelevant or cosmetic.”

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