Love, and Hate

"Show me that better plan for improving yields and doubling production to meet demand for food, and we'll probably be doing research on it."

So said Robert Fraley, the Monsanto Corporation's Chief Technology Officer, no doubt thinking of the company's legion of critics. These are groups who hate the company to the extent that, in cities worldwide, they now stage a "March Against Monsanto" once a year (the second annual of which was in late May). With slogans like "Monsanto is the seed of our destruction", and "Monsanto Kills", and against the backdrop of widespread public suspicion of genetically modified organisms (GMOs), the protestors latest complaints are that Monsanto researchers have developed a "terminator" gene that makes crops sterile, that it is aggressively resisting efforts in many states to require the labeling of GM foods, that organic crops are being polluted by airborne GM pollen, and that it continues to bully and even sue farmers - on the grounds of intellectual-property theft - who violate technology agreements by using seeds for which they haven't paid. Given these and other alleged practices, the company is regarded strongly negatively - in a recent Harris poll ranking companies' "reputation quotient", Monsanto was third from the bottom (just above BP and Bank of America).

There is, however, a significant portion of society that has nothing short of love and respect for the company - its investors. The stock market value of the company is up massively since 2000 (when it was spun off from Pharmacia Upjohn) - nearly 1000%, from some $7 billion to more than $66 billion, with much of that increase coming  from the biotechnology unit that develops GM seeds. Such seeds (not all of which are from Monsanto) have been broadly accepted, and paid for by farmers at a premium to others: according to USDA data, GM cotton accounted for 94 percent of all cotton planted, GM soybeans accounted for 93 percent of soybeans planted, and GM corn accounted for 88 percent of corn planted; nearly 95 percent of the U.S. sugar beets are GMO, and more than 50% of the US domestic sugar production comes from sugar beets; GM corn, soybean and cotton plants are used extensively to produce food ingredients such as corn starch and syrup, and cottonseed and soybean oil; over 90% of canola oil production in the US is GMO. Investors are not unaware of the demand shift to non-GMO foods, but feel the impact will be small. They are aware that the considerable research literature (from, among others, the American Medical Association, the World Health Organization, and the American Association for the Advancement of Science) concludes that GMO foods are safe. And, in any case, they point to Monsanto's current laser focus on traditional plant breeding, on the targeted use of bacteria, fungi, and other living organisms to strengthen seed properties, and on the company's move into computing, supplying software and hardware to farmers to collect and analyze crop data, as clear evidence that the company continues to evolve.

So, from the early days in the mid-1980's when Monsanto's researchers spliced a bacterium that makes a protein lethal to insect larvae into corn, potato, and cotton seeds, to the current state of development, which includes a $400 million expansion to the 1.5 million-square-foot research facility in Chesterfield, Missouri, Monsanto will proceed relentlessly with one overall objective - to steepen crop yield curves through scientific research - in order to feed an ever-expanding world population. Hating the company may be popular, but hardly rational.