12 December 2002

MONSANTO WANTS TO "HELP" ARGENTINA

Interesting piece below reflecting Monsanto pressure on Argentina to hang in with GMOs. What's clear from the article is that Argentina's enthusiasm for GM crops has more than waned. Previously Monsanto's put economic pressure on Argentina by saying it would close down facilities, hitting employment in Argentina, if the government did not maintain a pro-GM policy.

Here the claim is that Argentina needs the help of GMOs to compete economically. Curious, then, that examination of the US's own Department of Agriculture, the USDA, governmental data released in June shows:

*GM crops do not increase yield potential and may reduce yields
*Bt insecticide GM corn has had a negative economic impact on farms
*GM herbicide-tolerant crops have produced no reduction in herbicide active ingredient applied
*For herbicide-tolerant soya, active ingredient of herbicide applied has increased
*"The adoption of herbicide-tolerant soybeans does not have a statistically significant effect on net returns"

The report also comments that "the soybean results appear to be inconsistent with the rapid adoption of this technology" and that "An analysis using broader financial performance measures... did not show GE crops to have a significant impact."

It concludes that: "Perhaps the biggest issue raised by these results is how to explain the rapid adoption of GE crops when farm financial impacts appear to be mixed or even negative." The report does not refer to the hype and pressure from the likes of Monsanto affecting governments and producers.

More on the report at:
http://www.btinternet.com/~nlpwessex/Documents/usdagmeconomics.htm

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GMOs help Argentina fight subsidies, Monsanto

Reuters, 12.11.02
By Damian Wroclavsky
http://www.forbes.com/markets/newswire/2002/12/11/rtr820698.html

BUENOS AIRES, Argentina, Dec 11 (Reuters) - Argentina must rely on genetically modified seeds that reduce production costs if it hopes to compete against major farm exporters that subsidize their farmers, Monsanto (nyse: MON - news - people) Argentina's No. 1 official said in a recent interview.

"If (Argentina) is a big grain exporter, with many buyers and without subsidies, it has to be very efficient with very low costs," said Jorge Ghergo, director of Monsanto's local unit.

Argentina is the second-biggest user of GM products after the United States and St. Louis-based Monsanto is a biotechnology giant.

About 90 percent of Argentina's soy crop, which covers an area about half the size of Britain and is the world's third largest, is genetically modified.

But after an explosion in approvals for the use of GMOs between 1996 and 1998, government authorizations for new products have fallen to virtually zero.

Argentina, a top grain and oilseed exporter, expects to harvest a total of 70 million tonnes of grains, oilseeds and cotton in 2002/03.

The country is also part of a group of farm goods exporters critical of the U.S., European and Japanese subsidy policies.

"A system of farming in which costs are steadily falling needs to be developed. Argentina needs an agriculture strategy (and) that doesn't mean approving just one GM product," Ghergo said.

Argentina is the world's No. 1 soyoil and soymeal exporter and farm goods made up around half of the roughly $26.5 million worth of goods the country shipped last year.

"Those of us in this business have a clear idea of where Argentina must go technologically (and) where, as an exporter, we can get the maximum benefit. We need for Argentina's leadership and the agriculture department to make decisions that make the rules of the game clearer," Ghergo said.

Monsanto, which dominates the soy business in Argentina with its Roundup weedkiller and its genetically-modified Roundup Ready soy seeds, is a main target of environmental groups critical of GM products.

Environmental and consumer groups have raised questions about the long-term impact of GM products on human health and on the environment, while biotech firms point out the products have not been scientifically proven to be harmful to health.

STRATEGY VS POLICY

Roundup Ready corn was introduced in 1998 but has yet to receive approval for use in Argentina -- a sign that authorizations have slowed considerably.

The corn variety is approved for sale in the United States but not in Europe where Argentina has two big clients -- Spain and Portugal.

In the past four years, six different agriculture secretaries have upheld the decision not to approve the herbicide resistant corn in order to protect sales of 800,000 tonnes of the grain a year to Spain and 400,000 tonnes to Portugal.

Argentina exports a total of about 9.5 million tonnes of corn a year.

"Sometimes for (fear of) losing a customer that represents 3 percent of sales decisions have been made that have a negative impact on 97 percent of our exports," Ghergo said.

The 2002 fiscal year was a bad one for Monsanto's Argentine unit, which lost $154 million.

The collapse of the Argentine economy dealt a heavy blow to the unit, which has annual sales of about $550 million.

A deepening recession forced the government to default on most of its public debt and devalue the peso in January.

The government also converted what was a dollar economy into a peso economy, converting assets and liabilities at mismatched rates. As a result, Monsanto received devalued pesos for products it had sold in dollars, slashing its sales revenues.