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dam-l Monsanto invests in water/LS
>From a colleague in South Africa:
MONSANTO'S WATER AND AQUACULTURE BUSINESSES
>Date: 03 Jun 1999
>
>
>MONSANTO'S EXPANDING MONOPOLIES
>
>By Vandana Shiva
>
>Over the past few years, Monsanto, a chemical firm, has positioned
>itself as an agricultural company through control over seed - the
>first link in the food chain. Monsanto now wants to control water, the
>very basis of life.
>
>In 1996, Monsanto bought the biotechnology assets of Agracetus, a
>subsidiary of W. R. Grace, for $150 million and Calgene, a
>California-based plant biotechnology company for $340 million. In
>1997, Monsanto acquired Holden seeds, the Brazilian seed company,
>Sementes Agroceres and Asgrow. In 1998, it purchased Cargill's seed
>operations for $1.4 billion and bought Delta and Pine land for $1.82
>billion and Dekalb for $2.3 billion.
>
>In India, Monsanto has bought MAHYCO, Maharashtra Hybrid Company, EID
>Parry and Rallis. Mr. Jack Kennedy of Monsanto has said, "we propose
>to penetrate the Indian agricultural sector in a big way. MAHYCO is a
>good vehicle." According to Mr. Robert Farley of Monsanto, "what you
>are seeing is not just a consolidation of seed companies, it's really
>a consolidation of the entire food chain. Since water is as central to
>food production as seed is, and without water life is not possible,
>Monsanto is now trying to establish its control over water. During
>1999, Monsanto plans to launch a new water business, starting with
>India and Mexico since both these countries are facing water
>shortages."
>
>Monsanto is seeing a new business opportunity because of the emerging
>water crisis and the funding available to make this vital resource
>available to people. As it states in its strategy paper, "first, we
>believe that discontinuities (either major policy changes or major
>trendline breaks in resource quality or quantity) are likely,
>particularly in the area of water and we will be well-positioned via
>these businesses to profit even more significantly when these
>discontinuities occur. Second, we are exploring the potential of
>non-conventional financing (NGOs, World Bank, USDA, etc.) that may
>lower our investment or provide local country business-building
>resources." Thus, the crisis of pollution and depletion of water
>resources is viewed by Monsanto as a business opportunity.
>
>For Monsanto, "sustainable development" means the conversion of an
>ecological crisis into a market of scarce resources. "The business
>logic of sustainable development is that population growth and
>economic development will apply increasing pressure on natural
>resource markets. These pressures and the world's desire to prevent
>the consequences of these pressures, if unabated, will create vast
>economic opportunity. When we look at the world through the lens of
>sustainability, we are in a position to see current - and foresee
>impending - resource market trends and imbalances that create market
>needs. We have further focussed this lens on the resource market of
>water and land. These are the markets that are most relevant to us as
>a life sciences company committed to delivering food, health and hope
>to the world, and there are markets in which there are predictable
>sustainability challenges and therefore opportunities to create
>business value."
>
>Monsanto plans to earn revenues of $420 million and a net income of
>$63 million by 2008 from its water business in India and Mexico. By
>2010, about 2.5 billion people in the world are projected to lack
>access to safe drinking water. At least 30 per cent of the population
>in China, India, Mexico and the U.S. is expected to face severe water
>stress. By 2025, the supply of water in India will be 700 cubic km per
>year, while the demand is expected to rise to 1,050 units. Control
>over this scarce and vital resource will, of course, be a source of
>guaranteed profits. As John Bastin of the European Bank of
>Reconstruction and Development has said, "Water is the last
>infrastructure frontier for private investors."
>
>Monsanto estimates that providing safe water is a several billion
>dollar market. It is growing at 25 to 30 per cent in rural communities
>and is estimated to rise to $300 million by 2000 in India and Mexico.
>This is the amount currently spent by NGOs for water development
>projects and local government water supply schemes and Monsanto hopes
>to tap these public finances for providing water to rural communities
>and convert water supply into a market. The Indian Government spent
>over $1.2 billion between 1992 and 1997 for various water projects,
>while the World Bank spent $900 million. Monsanto would like to divert
>this public money from public supply of water to establishing the
>company's water monopoly. Since in rural areas the poor cannot pay, in
>Monsanto's view capturing a piece of the value created for this
>segment will require the creation of a non-traditional mechanism
>targeted at building relationships with local government and NGOs as
>well as through mechanisms such as microcredit.
>
>Monsanto also plans to penetrate the Indian market for safe water by
>establishing a joint venture with Eureka Forbes/Tata, which controls
>70 per cent of the UV Technologies. To enter the water business,
>Monsanto has acquired an equity stake in Water Health International
>(WHI) with an option to buy the rest of the business. The joint
>venture with Tata/Eureka Forbes is supposed to provide market access
>and fabricate, distribute, service water systems; Monsanto will
>leverage their brand equity in the Indian market. The joint venture
>route has been chosen so that "Monsanto can achieve management control
>over local operations but not have legal consequences due to local
>issues."
>
>***** Another new business that Monsanto is starting in 1999 in Asia is
>aquaculture. It will build on the foundation of Monsanto's
>agricultural biotechnology and capabilities for fish feed and fish
>breeding. By 2008, Monsanto expects to earn revenues of $1.6 billion
>and a net income of $266 million from its aquaculture business. While
>Monsanto's entry into aquaculture is through its "sustainable
>development" activity, industrial aquaculture has been established to
>be highly non-sustainable. The Supreme Court has banned industrial
>shrimp farming because of its catastrophic consequences. However, the
>Government, under pressure from the aquaculture industry, is
>attempting to change the laws to undo the court order. At the same
>time, attempts are being made by the World Bank to privatise water
>resources and establish trade in water rights. These trends will suit
>Monsanto well in establishing its water and aquaculture businesses.
>The Bank has already offered to help. As the Monsanto strategy paper
>states: "We are particularly enthusiastic about the potential of
>partnering with the International Finance Corporation (IFC) of the
>World Bank to joint venture projects in developing markets. The IFC is
>eager to work with Monsanto to commercialise sustainability
>opportunities and would bring both investment capital and
>on-the-ground capabilities to our efforts."
>
>Monsanto's water and aquaculture businesses, like its seed business,
>aimed at controlling the vital resources necessary for survival,
>converting them into a market and using public finances to underwrite
>the investments. A more efficient conversion of public goods into
>private profit would be difficult to find. Water is, however, too
>basic for life and survival and the right to it is the right to life.
>Privatisation and commodification of water are a threat to the right
>to life. India has had major movements to conserve and share water.
>The pani panchayat and the water conservation movement in Maharashtra
>and the Tarun Bharat Sangh in Alwar have regenerated and equitably
>shared water as a commons property. This is the only way everyone will
>have the right to water and nobody will have the right to abuse and
>overuse water. Water is a commons and must be managed as a commons. It
>cannot be controlled and sold by a life sciences corporation that
>peddles in death.
>
>(Vandana Shiva is Director of the Research Foundation for Science,
>Technology and Ecology, New Delhi. She can be reached at
>vshiva@giasdl01.vsnl.net.in)
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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