Thursday, November 16, 2006

Growing Dominance

This year marked the tenth anniversary of the first field-testing of biotech crops (better known as "genetically modified") with an arbitrary, though still impressive, milestone: almost 100 million hectares (ha) of approved biotech crops are currently growing around the world. According to its report, Global Status of Commercialized Biotech/GM Crops: 2005, the International Service for the Acquisition of Agri-Biotechnology Applications views almost all current trends in biotech crops as bullish.

Here are a few highlights:

The areal growth rate of biotech crops is currently at 11% per annum.

Twenty-one countries, spanning all continents but Antarctica, host 8.5 million farmers who engage in commercial biotech agriculture.

The champion growing countries (in decreasing order by area planted) are the United States (49.8 million ha), Argentina (17.1 million ha), Brazil (9.4 million ha), Canada (5.8 million ha), and China (3.3 million ha).

Soybean is the dominant biotech crop (54.4 million ha), then maize (21.2 million ha), cotton (9.8 million ha), and canola (4.6 million ha).

Herbicide tolerance is the most popular genetically engineered trait (63.7 million ha), followed by insect resistance (16.2 million ha), and "stacked" genes for both traits (10.1 million ha). Of these categories, gene stacking is growing most rapidly.

Though the science of biotech crops is often complex, the landscape of commercial control is quite simple: Monsanto bestrides the world of biotech crops like a colossus.

From Roundup Ready to Bt to "Terminator" seeds, Monsanto develops it, patents it, and then grows it around the world. Biotech crops engineered by Monsanto grow on more than 90% of the world's biotech crop fields. Syngenta, Monsanto's nearest rival, occupies just 4%. Monsanto possesses market power in biotech agriculture to rival Microsoft's dominance in operating systems.

Monsanto works hard to protect its investments in biotech crops. It is an enthusiastic patent applicant. In the United States alone, Monsanto holds at least 3,872 patents and 281 published patent applications. By comparison, "rival", Syngenta, holds only about one tenth the patents and 104 published patent applications.

Antitrust concerns about Monsanto's dominance of biotech crops should be quite severe if the relevant market is considered to be biotech crops alone. However, the current preference is to view the relevant market as including all crops, biotech or otherwise. Given the current rapid growth in adoption of biotech crops, Monsanto's days as big fish in a small pond will probably soon given way to the new role of very big fish in a large pond.


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