Issue 186

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"GMO's Are Dead"

"GMOs Are Dead" by Brewster Kneen

The biotech corporations that just three years ago started calling themselves the "life sciences" companies are in the midst of a major makeover, as the promised synergies between pharmaceuticals and agricultural biotechnology have not panned out. At the same time, they continue their deliberate strategy of fatalization: to induce public fatalism and despair so that we will believe that the onward march of GE cannot be stopped.

DNA OR TNC?A year and a half ago (12/7/99), the Deutsche Bank issued a report to investors titled "DuPont - Ag Biotech: Thanks, But No Thanks." Without a crystal ball it is hard to tell whether that was just sound analysis or if it was a self-fulfilling prophecy. In any case, it was a sound prediction. The report contained an appendix dated May 21 entitled "GMOs Are Dead." Among other things, it said, "GMOs have just crossed the line. Thirty days ago, the investment community accorded only positive attributes . . . to GMO corn and soybeans. . . Today, the term GMO has become a liability. We predict that GMOs . . . will now be perceived as a pariah. . . Increasingly, GMOs are, in our opinion, becoming a liability to farmers. . . 'Don't expect us to take a bullet for your GMO products.' So said a representative of Nestl³."

Today it seems that only die-hards like the Canola Council will say that GMO crops have not become a pariah. All the major corporations, with the apparent exception of Bayer, are restructuring and refocusing their businesses and trying, as politely as possible, to usher agbiotech and ag chemicals out the door or into the back room so the companies can concentrate on pharmaceuticals, where the real money (double-digit return on investment) is.

"People today want to have a pure pharma focus, which is why Novartis and Aventis are getting out of chemicals," said a Scottish fund manager. He was commenting on the future of Bayer, which has stuck to a conglomerate model while other European chemical-pharmaceutical firms have broken themselves up. -GM, 9/12/00

The attempt of the biotech industry to clothe itself in the mantle of "life sciences" began in March, 1997, when Novartis ran a series of full-page ads in major media promoting its skills and products in "the science of life". In January, 1998, Monsanto announced in full-page ads, "Life begins at 97" and explained, "After a 97-year history of success, we have a new business focus: life sciences." The same ads introduced its nifty little vine logo and its blasphemous motto, "Food.Health.Hope."

By the summer of 1999, Monsanto was on the ropes, with a debt of $8.1 billion. It tried to sell itself to American Home Products, which owned Cyanamid (agrotoxins) at the time but that foundered, apparently on the rocks of big egos. Finally, at the very end of 1999, Pharmacia rescued Monsanto, sort of. What Pharmacia was after, however, was not the ag biotech for which Monsanto is notorious, but rather its drug division, Searle, with its blockbuster arthritis drug Celebrex - notwithstanding the very serious "side effects" of the drug. This became apparent when Pharmacia announced that it would set Monsanto up as a public company while retaining ('for now', in fine print) 80% ownership.

By this time, Searle had been absorbed by Pharmacia and Monsanto was a stripped down business consisting of seeds, ag biotech and Roundup. Part of the stripping down was the disposal of its CEO, Robert Shapiro, who was replaced by long-time Monsanto executive Henry Verfaillie. In mid November, Pharmacia made an initial public offering (IPO) of Monsanto stock. Apparently it did not go over very well with investors. Pharmacia still owns 85% of the company, and the other 15% went entirely to senior Monsanto employees on some kind of stock option deal. (Verfaillie himself bought $7 million worth.) In other words, Deutsche Bank's analysis remains sound. And if you go to the totally revamped website you will find the vine, but not "Food.Health.Hope."

"Monsanto manages its business in two segments: Agricultural Productivity, and Seeds and Genomics. The Agricultural Productivity segment consists primarily of crop protection products and animal agriculture businesses. The Seeds and Genomics segment is comprised of global seeds and related biotechnology traits businesses, and genetic technology platforms."

"Year-to-date, sales in the Agricultural Productivity segment increased by 8% to $3.1 billion compared with sales in the first nine months of 1999. The increase was led by a 5% increase in the sales of Roundup and other glyphosate products to $2.1 billion. . . Worldwide volumes of Roundup have grown 18 % year-to-date."

"The company continues to strategically shift more of its seed offerings to those with biotechnology traits."

- Monsanto third quarter 2000 report, 30/10/00

The Pharmacia-Monsanto split off is not unique. In fact, it typifies what is taking place across the board with the big "life sciences" corporations.

The giants Novartis and AstraZeneca have gotten together to create Syngenta, to carry on Novartis' agrotoxin and seeds businesses and AstraZeneca's agrotoxin business (a 61%-39% partnership) while the mother companies focus on drugs and human 'health' activities. (Advanta's seed business was already a 50/50 partnership with Dutch co-op Cosun so it was not included in Syngenta.)

Aventis, so much in the news over StarLink corn, is the product of the merger of Hoechst and Rhªne-Poulenc in 1998, but it also included, in some way, the Hoechst-Schering partnership, AgrEvo. Now the agbiotech and agrotoxin activites of Aventis and AgrEvo are being hived off as Agreva.

"I welcome the move. We don't want to buy conglomerates anymore," said Eric Bernhardt, a fund manager with Clariden private bank in Zurich. . . "Agriculture is a low growth area and has been dragging down the rest of the company. The market growing only 2% to 3% a year against the 11% or so revenue growth expected from pharmaceuticals." -Reuters, 15/11/00

The right-wing business weekly The Economist (18/11/00) described recent events candidly:

"Aventis announced it will sell its agricultural business by the end of next year. . . Other nervous companies include AstraZeneca and Novartis, which agreed to merge their agribusiness last year. Their bio-tech baby Syngenta was a stock market flop, capitalising at just over half of the expected $10 billion when it was floated on November. GE drug company Pharmacia bought the infamous bio-tech food group Monsanto, and is now expected to sell it within two years. Smaller company DuPont is also expected to sell its GE drug-making business, as is German company BASF whose drug division is small and unsuccessful. Bayer is the only company soldiering on with both GE agricultural and drug divisions, as the farm side is more profitable than its pharmaceuticals."

Since Aventis has been much in the news, here are more details about the company to illustrate the troubled history of biotechnology:

Aventis was launched in December 1999 through the merger of Hoechst AG of Germany and Rhªne-Poulenc SA of France.

Rhªne Poulenc was founded in 1858 as an apothecary shop in Paris. By the early 1900s the company had developed a synthetic drug to combat previously untreatable syphilis. Hoechst also traces its roots to the mid-19th century, when it started making chemicals in Germany. In 1925, it joined with drugmaker Bayer A.G. and chemical manufacturer BASF to become part of I.G. Farbenindustrie A.G. I.G. Farben, as that company was known, was broken up by Allied forces after World War II because of its involvement in producing gases used in Hitler's death camps. Its 'gases' were the forerunners of modern-day agro-toxins. Neither Hoechst, Bayer nor BASF were held responsible for I.G. Farben's wartime activities and the three were allowed to maintain their businesses.

75% of Aventis' $17 billion in sales in 1999 came from its drugs business. The rest was from its agrotoxins sector. Kuwait's government-run petroleum company is the largest single shareholder of Aventis.

-Agribusiness Examiner # 95, from a profile of Aventis by S.P. Dinen in the Des Moines (Iowa) Register, 5/11/00

"Aventis CropScience (the crop protection and crop production unit of Aventis), brought together the crop protection business of Rhªne-Poulenc with the crop protection, seeds and crop improvement activities of Hoechst Schering AgrEvo. Schering AG, Hoechst's partner in AgrEvo, owns a 24 percent interest."

The Aventis website also provides the following insights into its current - ambitious, can we say? - corporate philosophy:

"Our challenge is life."

"We've developed innovative pharmaceuticals for the treatment of allergies - so that everyone can have pleasant feelings about nature." [photo of boy and girl smirking against leafy background]

"We develop innovative crop protection and improved plants - so tomorrow we can all live better." [photo of woman in wheat field]

"As we begin the new millennium, dramatic advances in science and technology are unravelling the very secrets of the processes of life. Important scientific discoveries are being made, and the potential gain in knowledge is our key to massive advancements in the quality of everyday living."

"Our extensive commitment to R&D, powerful global marketing network and comprehensive product portfolio, are providing us with the necessary tools to skillfully confront and alleviate the complex problems facing biological life today."

Meanwhile, the company is being taken apart, according to an Aventis press release (15/11/00 ) also on their website. Could this have anything to do with the still-to-be-concluded StarLink episode?

"The Supervisory Board of Aventis approved a strategic focus on pharmaceuticals on 15 November. The agricultural business unit, Aventis CropScience, which has been operating as an independent legal entity since Aventis was founded a year ago, is to be divested . . . under the name "Agreva". The divestment process is expected to be implemented by the end of 2001."

"Since the creation of Aventis, market consolidation in both the pharma and agriculture sector has accelerated. By effecting the separation, Aventis will achieve strategic flexibility, clarity and enhanced performance focus for both businesses."

"The Animal Nutrition business is also in the process of being sold. The 50 percent stake in the animal health joint venture Merial will be retained. The divestments of the remaining industrial activities, namely the interests in Messer and Wacker, are expected to progress as previously communicated."

Our family doctor, Warren Bell, reports that he perused the list of advertisers in a recent issue of the Canadian Family Physician, and found: AstraZeneca, Aventis, Bayer Inc., and Novartis Pharma Canada Inc. Then he looked on the inside cover of the brochure of the Crop Protection Institute, which he had just received. The names seemed familiar: Zeneca Agro, Aventis CropScience Canada Co., Bayer Inc. and Novartis Crop Protection Inc./Novartis Seeds Inc.

How do we interpret all this?

First of all, one has to ask serious questions about the intelligence of the drug/biotech/agrotoxin industry. They apparently fell for their own line of wishful thinking that combining pharmaceuticals and agbiotech, and christening them "life sciences," would produce magical synergies and fantastic profits. Perhaps they were overly influenced by the apparent nonchalance with which the public appears to accept high-tech drugs. They failed to take notice (as Deutsche Bank did) of the changing public consciousness against GE foods - and, indeed, the "medical model" of high-tech and drug-dependent therapies for treatment of illness - in favour of organic food and alternate therapies which emphasise health promotion.

Second, if these companies seem all-powerful, look at the changes taking place in the past three years. Consider carefully the case of Monsanto. It is not dead and buried - unfortunately; but it is taking a great deal more public money to keep all this going than the capitalists are willing to provide by way of public investment. One has to ask, where would agbiotech be without the Rockefeller Foundation?

Third, observe the current corporate strategy of shifting both business activity and public appeal away from GE foods to the human 'health' business. The corporate emphasis now is on selling the public on the personal, individual 'benefits' of tailor-made drugs, selected and improved human embryos, and organ transplants from GE pigs (zenotransplants). This appeal to individual 'benefit' has its obvious corollary in the ethic of capitalist greed: more for me. Hence the hiving off of the agbiotech and agrotoxin subsidiaries.

Fourth, the pernicious and anti-social character of the corporate strategy should not be underestimated. It is deliberate, and it is accompanied by a parallel government strategy of gaining support for the drug and biotech industry by appealing to individual and special interest group benefits, while building the appearance of public support through a highly manipulative process of 'consultation' with 'stakeholder' groups and carefully selected individuals-who may have a tendency to be flattered by being fingered by the government as 'important' people to be consulted. The way the Canadian Biotechnology Advisory Committee was formed more than a year ago is a good example, as is its current manoeuver to form an advisory body to the advisory committee. In other words, what we are witnessing is another dimension of privatization, accompanied by the further marginalization of Parliament and other institutions that are supposed to serve the public, in the interests of increasing corporate control and profit, or 'shareholder value.'

Fifth, we need to recognize the strategy of fatalization: the attempt by the biotech industry to convince us all that it is too late to halt the advance of biotechnology. This has been an important aspect of the industry strategy for years. As I wrote in Farmageddon, senior AgrEvo and Monsanto executives confirmed this for me in 1997; and if you think about the StarLink episode, one can be sure that Aventis knew exactly what it was doing in 1998 when StarLink was grown on 10,000 acres in the U.S. No one was looking for contamination that year, nor the next when 250,000 acres of StarLink were grown without approval for human food use. Clearly Aventis was hoping to pollute the food system so significantly that by the time it was discovered it would be impossible to clean it out of the system. Then Aventis could just say, 'sorry about that folks, but it's too late to turn back.' When it did become public, Aventis' first move was to ask EPA to declare the presence of StarLink corn an "unavoidable contaminant" - just as Aventis intended it to be. (The suspicious mind also has to wonder whether USDA and EPA officials did not know about it or were willing participants in Aventis' scheme all along.)

Yes, what I am suggesting is that there has been a conspiracy between the biotech industry and government agencies in Canada and the US to fatalize the public into throwing up our hands in despair. That is why the industry and its government agents have been adamantly opposed to labelling. That is why AgCanada and the CFIA pushed the GE crops through the regulatory process as fast as possible. That is why AgCanada ten years ago decided to base biotech regulation on the existing legislation rather than setting up a proper regulatory regime. They did not want one.

I am suggesting that Monsanto and everyone else knew GE corn pollen would wander and that buffer zones were inadequate. They knew there would be transgenic canola everywhere - and they wanted it to be everywhere.

It has all been part of a carefully thought out plot to engender public fatalism.

But it didn't work.

Why would anyone want to be impressed with an industry that has such a poor grasp of reality that all the major players have to make a radical course change after less that three years of proclaiming themselves the source of life? Little wonder that Deutsche Bank said, two years ago, "GMOs are dead."

So let's carry on with the burial.


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