Monsanto facing uncertain futures:

1. Sietze Vellema, Agribusiness and Society: Corporate Response to Environmentalism, Market Opportunities and Public Regulation Monsanto facing uncertain futures: Immobile artefacts, financial constraints and public acceptance of technological change ETH Zürich, Science, Technology and Public Policy Lea Herzig, 23.1.2007

2. Ambiguous role of technology • Solution and source of environmental problems • Agribusiness has the potential to bring environmental progress and produce harm to the environment • Around 1990 a number of agrochemical industries adopted a strategy to transform their enterprises into life science industries How do agribusiness firms manage the many-sided process of technical change?

3. Monsantos ambition • Contribute to a sufficient food production for the world’s rapidly growing population • Limit resource consumption by the use of new technologies • Improve yield and quality of food using advanced biotechnology

4. Proactive Management • Come up with better technologies • Create financial and political alliances • Find an acceptable institutional modality to introduce and diffuse its new technological products into society

5. Linear model of innovation Gather information Crack the code Develop products Serve the market Deliver to consumers Food: global processing and trade Roundup: channel and grower access (Ag-chem companies) Seed: elite germplasm and production (Seed companies) R&D: genomics and trait pipeling (Biotech companies)

6. Rise of Monsanto The patent of glyphosate (ingredient of the herbicide Roundup Ready) was due to expire in 2000 1996/97 Introduction of Roundup varieties: soybeans, canola, cotton… Introduction of insect protected crop seeds Monsanto became number one in the field of agricultural biotechnologies!

7. Fall of Monsanto • Roundup varieties produced lower yields • Charges and restrictions to farmers • Technology fee • Application of only Roundup formulation of glyphosate • Inspection of farms by Monsanto representatives • Controversy about possible risks of Bt crops • Terminator technology (GURT): sterile seeds

8. Regulation and responsibility « Monsanto should not have to vouchsave the safety of Biotech food. Our interest is in selling as much as possible. Assuring its safety is the FDA’s job » Phil Angell, Director of communication, New York Times

9. Technological immobility • Need to deliver short-term profits • Need to pursue its high-profile investment strategy • Controversies over benefits and risks of new plant varieties • Control the use and distribution of their products which induced criticism among political actors

10. The bottom line Monsanto spent billions of dollars on acquisitions, millions on R&D and on publicity and became the world’s second largest seed company, but this expansion was only made possible by external financial resources. Fully dependent on shareholders and investors Way out: Merge with a pharmaceutical firm (2000) and make a new start as a company exclusively devoted to agriculture (2002)

11. Acknowledgements « We thought it was our job to persuade, too often we’ve forgotten to listen. » CEO Robert Shapiro, (1995-1999) « The company – my company, Monsanto – had focused so much attention on getting the technology right for our customer – the grower – that we didn’t fully take into account the issues and concerns it raised for other people. » CEO Hendrik Verfaille, (2000-2002)

12. Conclusion • Monsanto overestimated its ability to develop and introduce a new set of biotechnologies creating a sustainable future • Financial pressures did not allow to experiment in niche markets • Increasingly, biotechnology and genetic engineering became a compelling social and environmental concern and occupied a central place in public controversies • Monsanto’s straightforward view on technology development left little or no space for feedback loops from society and end-use markets