When you think of Monsanto, the phrase genetically modified likely comes to mind.
There are two questions relating this case. It can be 1 page for both answers.
Introduction
When you think of Monsanto, the phrase genetically modified
likely comes to mind. The Monsanto Company is the world’s largest seed
company, with sales of $13.5 billion. It specializes in biotechnology,
or the genetic manipulation of organisms. Monsanto scientists have spent
the last few decades modifying crops—often by inserting new genes or
adapting existing genes within plant seeds—to meet certain aims, such as
higher crop yields or insect resistance. Monsanto develops genetically
engineered seeds of plants that can survive weeks of drought, ward off
weeds, and kill invasive insects. Monsanto’s genetically modified (GM)
seeds have increased the quantity and availability of crops, helping
farmers worldwide increase food production and revenues.
Today, 90 percent of the world’s GM seeds are sold by Monsanto or
companies that use Monsanto genes. Yet Monsanto has met its share of
criticism from sources as diverse as governments, farmers, activists,
and advocacy groups. Monsanto supporters say the company creates
solutions to world hunger by generating higher crop yields and hardier
plants. Critics accuse the multinational giant of attempting to take
over the world’s food supply and destroying biodiversity. The
announcement that Bayer AG is acquiring Monsanto for $66 billion has
intensified these concerns because the acquisition would create a
company that would command over one-fourth of the world’s seeds and
pesticides market. Since biotechnology is relatively new, critics also
express concerns about the possibility of negative health and
environmental effects from biotech food. These criticisms have not kept
Monsanto from becoming one of the world’s most successful businesses.
This analysis first looks at the history of Monsanto as it progressed
from a chemical company to an organization focused on biotechnology. It
then examines Monsanto’s current focus on developing GM seeds,
including stakeholder concerns regarding the safety and environmental
effects of these seeds. Next, we discuss key ethical concerns, including
organizational misconduct and patent issues. We also look at Monsanto’s
corporate responsibility initiatives. We conclude by examining the
challenges and opportunities that Monsanto may face in the future.
History: From Chemicals to Food
Monsanto was founded by John E. Queeny in 1901 in St. Louis,
Missouri. He named the company after his wife, Olga Monsanto Queeny. The
company’s first product was the artificial sweetener saccharine, which
it sold to Coca-Cola. Monsanto also sold Coca-Cola caffeine extract and
vanillin, an artificial vanilla flavoring. At the start of World War I,
company leaders realized the growth opportunities in the industrial
chemicals industry and renamed the company The Monsanto Chemical
Company. The company began specializing in plastics, its own
agricultural chemicals, and synthetic rubbers.
Due to its expanding product lines, the company’s name was changed
back to the Monsanto Company in 1964. By this time, Monsanto was
producing such diverse products as petroleum, fibers, and packaging. A
few years later, Monsanto created its first Roundup herbicide, a
successful product that propelled the company even more into the
spotlight.
However, during the 1970s Monsanto encountered a major legal
obstacle. The company had produced a chemical known as Agent Orange,
which was used during the Vietnam War to quickly deforest the thick
Vietnamese jungles. Agent Orange contained dioxin, a chemical that
caused a legal nightmare for Monsanto. Dioxin was found to be extremely
carcinogenic, and in 1979 a lawsuit was filed against Monsanto on behalf
of hundreds of veterans who claimed they were harmed by the chemical.
Monsanto and several other manufacturers agreed to settle for $180
million.
In 1981 Monsanto leaders determined that biotechnology would be the
company’s new strategic focus. In 1986 Monsanto successfully spliced
bacterium DNA into a seed. The bacterium was lethal to certain types of
insects that feed on corn, potatoes, and cotton. The quest for
biotechnology was on, and in 1994 Monsanto introduced the first
biotechnology product to win regulatory approval. Soon the company was
selling soybean, cotton, and canola seeds engineered to be tolerant to
Monsanto’s Roundup herbicide. Many other herbicides killed good plants
as well as the bad ones. Roundup Ready seeds allowed farmers to use the
herbicide to eliminate weeds while sparing the crop.
In 1997 Monsanto spun off its chemical business as Solutia, and in
2000 the company entered into a merger and changed its name to the
Pharmacia Corporation. Two years later, a new Monsanto, focused entirely
on agriculture, broke off from Pharmacia, and the companies became two
legally separate entities.
The emergence of new Monsanto was tainted by disturbing news about
the company’s conduct. For nearly 40 years the Monsanto Company had
released toxic waste into a creek in the Alabama town of Anniston. The
company had also disposed of polychlorinated biphenyls (PCBs), a highly
toxic chemical, in open-pit landfills in the area. The results were
catastrophic. Fish from the creek were deformed, and the population had
highly elevated PCB levels. A paper trail showed that Monsanto leaders
had known about the pollution since the 1960s but had not stopped the
dumping. Once the cover-up was discovered, thousands of plaintiffs from
the city filed a lawsuit against the company. In 2003 Monsanto and
Solutia agreed to pay a settlement of $700 million to more than 20,000
Anniston residents.
When CEO Hugh Grant took over in 2003, scandals and stakeholder
uncertainty over Monsanto’s GM products had tarnished the company’s
reputation. The price of Monsanto’s stock had fallen by almost 50
percent, down to $8 a share. Grant knew the company was fragile and
decided to shift its strategic focus. Through a strong strategic focus
on GM foods, the company has recovered and is now prospering.
In spite of their controversial nature, GM foods have become popular
in developed and developing countries. Monsanto became so successful
with its GM seeds that it acquired Seminis Inc., a leader in the fruit
and vegetable seed industry. The acquisition transformed Monsanto into a
global leader in the seed industry. Today, Monsanto employs over 20,000
people worldwide. It is recognized as one of the 100 best corporate
citizens by Corporate Responsibility Magazine and has made Fortune magazine’s World’s Most Admired Companies list.
5-3Monsanto’s Emphasis on Biotechnology
While the original Monsanto made a name for itself through the
manufacturing of chemicals, the new Monsanto changed its emphasis from
chemicals to food. Today’s Monsanto owes its $13.5 billion in sales to
biotechnology, specifically to its sales of GM plant seeds. These seeds
have revolutionized the agriculture industry. Not content with resting
on its laurels, Monsanto continues to use its research budget to
investigate new methods of farming at its 1.5-million-square-foot
complex in Missouri.
Throughout history, weeds, insects, and drought have been the bane of
the farmer’s existence. In the twentieth century, synthetic chemical
herbicides and pesticides were invented to ward off pests. Yet applying
these chemicals to an entire crop was both costly and time consuming.
Then Monsanto scientists, through their work in biotechnology, were able
to implant seeds with genes that make the plants themselves kill bugs.
They also created seeds containing the herbicide Roundup, an herbicide
that kills weeds but spares the crops. Since then Monsanto has used
technology to create many innovative products, such as drought-tolerant
seeds for dry areas like Africa.
The company utilizes its technological prowess to gain the support of
stakeholders. For example, Monsanto has a laboratory in St. Louis that
gives tours to farmers. One of the technologies the company shows
farmers is a machine known as the corn chipper, which picks up seeds and
removes genetic material from them. That material is analyzed to see
how well the seed will grow if planted. The “best” seeds are the ones
Monsanto sells for planting. Monsanto is extending its reach into the
computing industry as well. The company offers software and hardware
that use big data to yield important information to help farmers in the
field. It even provides recommendations on when and where to plant.
Monsanto also arranges tours for its critics to help them understand the
process of GM crops and their implications.
However, GM crops are not without critics. Opponents believe
influencing the gene pools of the plants we eat could result in negative
health consequences. Others worry about the health effects on
beneficial insects and plants, fearing that pollinating GM plants could
affect nearby insects and non-GM plants. CEO Hugh Grant decided to
curtail the tide of criticism by focusing biotechnology on products not
directly placed on the dinner plate but on seeds that produce goods like
animal feed and corn syrup. In this way, Grant reduced some of the
opposition. The company invests largely in four crops: corn, cotton,
soybeans, and canola. Monsanto owes much of its revenue to its work on
GM seeds, and today more than half of U.S. crops, including most
soybeans and 90 percent of corn, are genetically modified.
Farmers who purchase GM seeds can grow more crops on less land and
with less left to chance. GM crops have saved farmers billions by
preventing loss and increasing crop yields. For example, in 1970 the
average corn harvest yielded approximately 70 bushels an acre. With the
introduction of biotech crops, the average corn harvest increased to
roughly 150 bushels an acre. Monsanto predicts even higher yields in the
future. According to Monsanto CEO Hugh Grant, this increase in
productivity will increase crop yields without taking up more land,
helping to meet the world’s growing agricultural needs.
Monsanto’s GM seeds have not been accepted everywhere. Attempts to
introduce them into Europe met with consumer backlash. Consumers have
gone so far as to destroy fields of GM crops and arrange sit-ins.
Greenpeace has fought Monsanto for years, especially in the company’s
efforts to promote GM crops in developing countries. Even China placed
bans on certain GM corn imports, although it has since relaxed the ban
and appears to be encouraging more acceptance of GM crops among its
citizens. This animosity toward Monsanto’s products is generated by two
main concerns: the safety of GM food and the environmental effects of
genetic modification.
5-3aConcerns about the Safety of GM Food
Of great concern to many stakeholders are the moral and safety
implications of GM food. Many skeptics see biotech crops as unnatural,
with the Monsanto scientist essentially “playing God” by controlling
what goes into the seed. Critics contend that effective standards have
not been created to determine the safety of biotech crops. Some
geneticists believe the splicing of these genes into seeds could create
small changes that might negatively impact the health of humans and
animals that eat them. Also, even though the Food and Drug
Administration (FDA) has declared biotech crops safe, critics say they
have not been around long enough to gauge their long-term effects. In
2013 protestors began an annual protest called March against Monsanto.
One concern is toxicity, particularly considering that many Monsanto
seeds are equipped with a gene to allow them to produce their own
Roundup herbicide. Could ingesting this herbicide, even in small
amounts, cause detrimental effects on consumers? Some stakeholders say
yes, and point to statistics on glyphosate, Roundup’s chief ingredient,
for support. According to an ecology center fact sheet, glyphosate
exposure is the third most commonly reported illness among California
agriculture workers, and glyphosate residues can last for a year. Yet
the Environmental Protection Agency (EPA) lists glyphosate as having low
skin and oral toxicity, and a study from the New York Medical College
states that Roundup does not create a health risk for humans. Since its
inception, glyphosate has become the most widely used herbicide. An
estimated 18.9 billion pounds of glyphosate have been used across the
world.
In 2013 over 250,000 people signed a petition in response to
President Barack Obama’s signing of H.R. 933 into law. The new law,
called the Agricultural Appropriations Bill of 2013, contains a
provision that protects GM organisms and genetically engineered seeds
from litigation concerning their health risks. In other words, courts
cannot bar the sale of GM food even if future health risks are revealed.
Critics of the provision claim the provision was slipped in at the last
moment and that many members of Congress were not aware of it. For
consumers, questions pertaining to the health risks associated with GM
crops have gone unanswered and are the primary reason the petition was
started. Many people have called this bill the “Monsanto Protection Act”
and believe it will help protect the survival of biotech corporations.
More controversy ensued in 2015 when the House of Representatives
added an addition to a chemical safety bill intended to replace the
outdated Toxic Substances Control Act. The additional paragraph was
interpreted as protecting chemical firms from legal liability for
chemical spills if they were the only company that manufactured the
chemical. Because Monsanto was largely the only manufacturer of the
now-banned PCBs, state attorneys general and environmental regulators
believe the law might protect Monsanto against lawsuits involving
chemical spills or dumping of PCBs. This controversy has occurred in the
midst of a number of lawsuits from individuals, cities, and school
systems accusing Monsanto of selling a dangerous chemical. Although
Congress claimed the bill does not favor Monsanto, the addition
immediately sparked protest and demands for Congress to change the bill.
Despite consumer concerns, the FDA and the American Association for
the Advancement of Science have proclaimed that GM food is safe to
consume. The European Commission examined more than 130 studies and
concluded that GM food does not appear to be riskier than crops grown by
conventional methods. As a result of its research, the FDA determined
that Americans did not need to know when they were consuming GM
products. Therefore, this information was not placed on labels in most
states, although 64 other countries, notably those in the European
Union, require GM food products to state this fact in their labeling.
However, there are signs that labeling laws are changing in the
United States. President Obama signed a bill that will require foods
containing GM ingredients to be labeled as such. According to the bill,
food manufacturers could choose to use digital QR codes or 1-800 numbers
as a form of labeling. Some have criticized these methods, however,
saying that lower-income consumers do not have the technology to scan QR
codes. Vermont Senator Bernie Sanders believes the bill is a weak form
of legislation and not nearly as strong as a law Vermont passed to
require GM labeling. GM labeling will take a few years to implement, and
decisions must be made about the best course to take. Food
manufacturers continue to argue that this type of food labeling is too
burdensome.
5-3bConcerns about Environmental Effects of Monsanto Products
Some studies have supported the premise that Roundup herbicide, used
in conjunction with the GM seeds called “Roundup Ready,” can be harmful
to birds, insects, and particularly amphibians. Such studies revealed
that small concentrations of Roundup may be deadly to tadpoles. Other
studies suggest that Roundup might have a detrimental effect on human
cells, especially embryonic, umbilical, and placental cells. Research
has also suggested that the chemical could contribute to antibiotic
resistance in humans and hormone disruption. Monsanto has countered
these claims by questioning the methodology used in the studies. The EPA
maintains glyphosate is not dangerous at recommended doses. On the
other hand, the World Health Organization (WHO) ruled that glyphosate
probably does have the potential to cause cancer in humans. Monsanto
challenged this assertion and wants to meet with WHO officials to
discuss the findings. A California judge has already ruled that the
state can require Monsanto to put a cancer warning on its Roundup
products.
A group of individuals have filed a lawsuit against Monsanto claiming
that Roundup contributed to their illnesses of non-Hodgkin lymphoma.
They claim that former EPA Deputy Director Jess Rowland may have
concealed evidence regarding the weed killer’s harmful impact. Rowland
worked with the Cancer Assessment Review Committee to develop a report
combating the findings that glyphosate contributes to cancer. A federal
court has unsealed documents of internal emails between Monsanto
officials and federal regulators that may hint at collusion. Other
emails suggest Monsanto may have manipulated academic research regarding
the toxicity of glyphosate. The courts must decide whether Monsanto is
innocent of wrongdoing or if it manipulated research and regulators into
ignoring potential health concerns.
As honeybees have begun to die off, critics are blaming companies
like Monsanto and Bayer. They believe the companies’ pesticides are
killing off the good insects as well as the bad ones. While there is no
definitive evidence that the honeybees are dying off due to pesticide
use, opposition against Monsanto is rising as the honeybee population
continues to decline. Another concern with GM seeds is the threat of
environmental contamination. Bees, other insects, and wind can carry a
crop’s seeds to other areas, sometimes to fields containing non-GM
crops. These seeds and pollens might then mix with the farmer’s crops.
Organic farmers have complained that GM seeds from nearby farms have
“contaminated” their crops. This environmental contamination could pose a
serious threat. Some scientists fear that GM seeds spread to native
plants may cause those plants to adopt the GM trait, thus creating new
genetic variations of those plants that could negatively influence the
surrounding ecosystem.
Another controversy involved the discovery of a field in Oregon
filled with an experimental form of Monsanto’s GM wheat. The wheat was
not approved by the United States Department of Agriculture. The
discovery of this wheat raised concern over whether it could have
contaminated U.S. wheat supplies. As a result, Japan temporarily
instituted a ban on U.S. wheat. Initial investigations revealed that the
wheat had been stored in a Colorado facility but were unable to provide
an explanation for how it showed up in an Oregon field. Monsanto denied
involvement and stated that it suspected someone had covertly obtained
the GM wheat and planted it. The altered wheat is not believed to have
caused any damage, and Japan lifted the ban. However, some farmers filed
lawsuits against Monsanto seeking class-action status.
Monsanto has taken action in addressing environmental and health
concerns. The company maintains that the environmental impact of
everything it creates has been studied by the EPA and approved. Monsanto
officials claim that glyphosate in Roundup rarely ends up in ground
water, and when it does contaminate ground water, it is soluble and will
not have much effect on aquatic species. Monsanto has also partnered
with Conservation International in an effort to conserve biodiversity.
Stakeholders are left to make their own decisions regarding GM crops.
Resistance to Pesticides and Herbicides
Another environmental problem that has emerged is weed and insect
resistance to the herbicides and pesticides in Monsanto crops. On the
one hand, it is estimated that GM crops have prevented the use of more
than $1.5 billion of pesticide use. On the other hand, critics fear that
continual use of the chemicals could result in “super weeds” and “super
bugs,” much like the overuse of antibiotics in humans has resulted in
drug-resistant bacteria. The company’s Roundup line, in particular, has
come under attack. GM seeds labeled Roundup Ready are engineered to
withstand large doses of the herbicide Roundup. Because Roundup is used
more frequently, weeds have started to develop a resistance to this
popular herbicide. Significant numbers of Roundup resistant weeds have
been found in the United States and Australia.
To combat “super bugs,” the government requires farmers using
Monsanto’s GM products to create “refuges,” in which they plant 20
percent of their fields with a non-GM crop. The theory is that this
allows nonresistant bugs to mate with those that are resistant,
preventing a new race of super bugs. To prevent resistance to the
Roundup herbicide, farmers are required to vary herbicide use and
practice crop rotations. However, since Roundup is so easy to use,
particularly in conjunction with Roundup Ready seeds, some farmers do
not take the time to institute these preventative measures. When they do
rotate their crops, some will rotate one Roundup Ready crop with
another. As a result, agricultural pests such as rootworm are becoming
resistant to genes in GM crops intended to kill them. For the first
time, regulators in the United States are encouraging limits on certain
kinds of GM corn to prevent the spread of resistant bugs. The EPA
acknowledges that farmers and seed companies have not done enough to
curb resistance. It began recommending that 35 percent of fields be
planted with another crop other than biotech corn. Resistance is of
particular concern in Latin America, Africa, and Asia, where farmers may
not be as informed of the risks of herbicide and pesticide overuse.
Dealing with Organizational Ethical Issues
In addition to concerns over the safety of GM seeds and environmental
issues, Monsanto has dealt with concerns about organizational conduct.
Organizations face significant risks from strategies and employees
striving for high performance standards. Such pressure sometimes
encourages employees to engage in illegal or unethical conduct. All
firms have these concerns. In the case of Monsanto, patents and other
legal issues have resulted in legal, ethical, and reputational
consequences.
5-4aPatent Issues
As bioengineered creations of the Monsanto Company, Monsanto’s seeds
are protected under patent law. Under the terms of the patent, farmers
using Monsanto seeds are not allowed to harvest seeds from the plants
for use in upcoming seasons. Instead, they must purchase new Monsanto
seeds each season. By issuing new seeds each year, Monsanto ensures it
secures a profit as well as maintains control over its property. This
patent protection has become a controversial subject among farmers and
has led to numerous litigation battles for Monsanto.
Throughout agricultural history, farmers have collected and saved
seeds from previous harvests to plant the following year’s crops.
Critics argue that requiring farmers to suddenly purchase new seeds each
year puts an undue financial burden on them and gives Monsanto too much
power. However, the law protects Monsanto’s right to have exclusive
control over its creations, and farmers must abide by these laws. When
they are found guilty of using Monsanto seeds from previous seasons,
either deliberately or out of ignorance, they are often fined.
Since it is fairly easy for farmers to violate the patent, Monsanto
has found it necessary to employ investigators from law firms to
investigate suspected violations. The resulting investigations are a
source of contention between Monsanto and farmers. According to
Monsanto, investigators deal with farmers in a respectful manner. They
approach the farmers suspected of patent infringement and ask them
questions. The company claims that investigators practice transparency
with the farmers and tell them why they are there and who they
represent. If after the initial interview is completed and suspicions
still exist, the investigators may pull the farmer’s records. They may
bring in a sampling team, with the farmer’s permission, to test the
farmer’s fields. If found guilty, the farmer often pays fines. However,
some farmers tell a different story about Monsanto and its seed
investigators. They claim that Monsanto investigators have used
unethical practices to get them to cooperate. They call the
investigators the “seed police” and say they behave like a “Gestapo” or
“mafia.”
In 2007 Monsanto sued Vernon Bowman, an Indiana farmer who Monsanto
claims used second-generation Monsanto seeds to plant soybeans. Monsanto
claimed its patent protection reaches past first-generation seeds and
Mr. Bowman infringed upon its patent. In 2009 the court ruled in favor
of Monsanto and ordered Bowman to pay $84,000 in damages. Mr. Bowman did
not accept defeat, and in 2013 brought his case before the Supreme
Court. The Supreme Court ruled in favor of Monsanto, representing a
great victory for biotechnology companies.
Monsanto does not limit its investigations to farmers. It filed a
lawsuit against DuPont, the world’s second-largest seed maker, for
combining DuPont technology with Roundup Ready. Monsanto won that
lawsuit, but was countersued by DuPont for anticompetitive practices.
These accusations of anticompetitive practices garnered the attention of
federal antitrust lawyers. With increased pressure coming from
different areas, Monsanto agreed to allow patents to expire on its seeds
starting in 2014. This will allow other companies to create less
expensive versions of Monsanto seeds. However, Monsanto announced it
would continue to strictly enforce patents for new versions of its
products, such as Roundup Ready 2 soybeans.
5-4bLegal Issues
Many major companies face occasional conflicts with government and
legal forces, and Monsanto is no exception. The government has begun to
examine Monsanto’s practices more closely. In early 2013 Monsanto
settled with local residents in Nitro, West Virginia, after claims of
health problems became persistent in a now-closed Agent Orange plant.
The company agreed to spend up to $93 million on medical testing and
local cleanup of as many as 4,500 homes. It also agreed to establish a
medical monitoring program and will make additional money available to
continue the program’s operation for 30 years.
In 1980 the Supreme Court allowed living organisms to be patented for
the first time, giving Monsanto the ability to patent its seeds.
Despite this victory, Monsanto came to the attention of the American
Antitrust Institute for alleged anticompetitive activities. The
institute suggested that Monsanto hinders competition, exerting too much
power over the transgenic seed industry and limiting seed innovation.
When Monsanto acquired DeKalb and Delta Land and Pine, it had to obtain
the approval of antitrust authorities and gained that approval after
agreeing to certain concessions. As a result of complaints, the
Department of Justice (DOJ) began a civil investigation into Monsanto’s
practices. Although the DOJ eventually dropped the antitrust probe,
concerns over Monsanto’s acquisitions continue.
The announcement that chemical, pharmaceutical, and life sciences
firm Bayer AG would acquire Monsanto for $66 billion drew scrutiny from
both U.S. and European authorities (Bayer is a German company). Such a
merger would create a “one-stop shop” for seeds, pesticides and
herbicides, and farmer services. Regulators are concerned that the
merger might give the combined firm too much power over the seed and
pesticide industry. During his presidential campaign, Vermont Senator
Bernie Sanders claimed the deal threatened Americans because it would
increase prices. Regulators in the European Union have asked for Bayer
to provide them with more information before they make a decision on
whether to approve—actions which might potentially delay the proposed
merger. Bayer and Monsanto deny that their merger would reduce
competition. In a meeting with President Trump, Bayer said it would
spend $8 billion for research and development in the United States and
keep Monsanto’s workforce intact. However, the companies will have to
convince the U.S. Justice Department, the Federal Trade Commission, and
European regulators that its merger will not restrict competition for it
to receive approval.
5-5Corporate Responsibility at Monsanto
Despite criticisms levied against Monsanto, a study has provided
evidence that GM crops have greatly benefited farming. The study
estimated that farmers who adopted GM crops have seen their profits
increase to 69 percent higher than those who did not. Today, the public
generally expects multinational corporations to advance the interests
and well-being of the people in the countries where they do business.
Monsanto has given millions of dollars in programs to improve
communities in developing countries.
Monsanto created a Code of Business Conduct to provide guidance on
the firm’s ethical expectations and is concerned with maintaining
integrity among its many different stakeholders. In 2003 the company
adopted an additional Code of Conduct for its chief executives and
financial officers and a Human Rights Policy in 2006 to ensure the
rights of Monsanto employees and those in its supply chain. The
company’s Business Conduct Office is responsible for investigating cases
of alleged misconduct as well as maintaining the company’s anonymous
hotline.
As part of Monsanto’s culture, the company wrote a pledge informing
stakeholders about what it sees as its ethical commitments. According to
Monsanto, the pledge “helps us to convert our values into actions, and
to make clear who we are and what we champion.” Table 1 provides the
values Monsanto pledges to uphold, including integrity, dialogue,
transparency, sharing, benefits, respect, acting as owners to achieve
results, and creating a great place to work.
As an agricultural company, Monsanto must address the grim reality
that the world’s population is increasing fast and the amount of land
and water available for agriculture is decreasing. Some experts believe
our planet must produce more food in the next 50 years to feed the
world’s population than what has grown in the past 10,000 years,
requiring us to double our food output. As a multinational corporation
dedicated to agriculture, Monsanto is expected to address these
problems. The company developed a three-tiered commitment policy:
- (1)produce more yield in crops,
- (2)conserve more resources, and
- (3)improve the lives of farmers.
The company hopes to achieve these goals through initiatives in sustainable agriculture.
5-5aSustainable Agriculture
Monsanto’s CEO Hugh Grant has said, “Agriculture intersects the
toughest challenges we all face on the planet. Together, we must meet
the needs for increased food, fiber, and energy while protecting the
environment. In short, the world needs to produce more and conserve
smarter.” Monsanto is quick to point out that its biotech products added
more than 100 million tons to worldwide agricultural production in a
10-year period, and the company estimates that this has increased
farmers’ incomes by $33.8 billion. Monsanto also created partnerships
between nonprofit organizations across the world to enrich the lives of
farmers in developing countries. The company’s goal is to double its
core crop yields by 2030. Monsanto intends to achieve this goal through
new product innovations such as drought-tolerant seeds and better
technology. Two regions Monsanto is now focusing on are India and
Africa.
The need for better agriculture is apparent in India, with a
population of nearly 1.3 billion people. Biotech crops have helped
improve the size of yields in India, and Monsanto has estimated that
Indian cotton farmers using biotech crops earn approximately $176 more
in revenues per acre than their non-biotech contemporaries. Monsanto
launched Project SHARE, a sustainable yield initiative created in
conjunction with the nonprofit Indian Society of Agribusiness, to
improve the lives of 10,000 cotton farmers in 1,050 villages.
In Africa Monsanto partnered with organizations, scientists, and
philanthropists to develop and introduce drought-tolerant and
virus-resistant seeds for African farmers. For instance, the Monsanto
Fund is working with scientists to develop cassava plants that are
resistant to two common types of viruses. The cassava is an important
food product for many African communities. As CEO Hugh Grant writes,
“This initiative isn’t simply altruistic; we see it as a unique business
proposition that rewards farmers and shareowners.”
But not all view Monsanto’s presence in Africa as an outreach in
corporate responsibility. Some consider it as another way for Monsanto
to improve its bottom line. Opponents see the company as trying to take
control of African agriculture and destroy African agricultural
practices that have lasted for thousands of years.
5-5bCharitable Giving
In 1964 the Monsanto Company established the Monsanto Fund. This fund
contributes to educational opportunities and the needs of communities
across the world. One recipient of the Monsanto Fund is Nanmeng Village
in China. The company is helping to train farmers in the area about ways
to improve agricultural methods and infrastructure development. The
Monsanto Fund also provides $1,500 scholarships to students who are
interested in agriculture. Each applicant must be endorsed by three
farmers in their communities to be eligible for the grant.
Another program implemented by the company is the Matching Gifts
Program. This program matches employee contributions to charitable and
educational organizations, dollar-for-dollar, by the Monsanto Fund. The
program matches a maximum of $5,000 per employee every year and includes
organizations supporting the environment, arts and culture, and
disaster relief, among many others.
In the first decade of the twenty-first century, Monsanto supported
youth programs and donated nearly $1.5 million in scholarships to
students wanting to pursue agriculture-related degrees. The company
supports 4-H programs and the program Farm Safety 4 Just Kids, a program
that teaches rural children about safety while working on farms.
Monsanto also partnered with the organization Agriculture Future of
America (AFA), providing more than $100,000 in scholarships to youth in
eight states who want to pursue agricultural careers. In St. Louis,
where its headquarters are located, Monsanto offers grants to schools
who develop innovative approaches to teaching students math and science.
5-6Conclusion
Monsanto faces challenges that it must address, including lingering
concerns over the safety and the environmental impact of its products.
The company needs to enforce its code of conduct effectively to avoid
organizational misconduct. Monsanto also faces scrutiny from antitrust
authorities who are concerned that the firm is too large, especially in
light of Monsanto’s proposed merger with German firm Bayer AG.
Yet despite the onslaught of criticism from Monsanto detractors,
Monsanto has numerous opportunities to thrive in the future. The company
is currently working on new innovations that could increase its
competitive edge as well as benefit farmers worldwide. Monsanto has
teamed up with a Danish biotechnology firm to develop microscopic
organisms that could be used to aid plant growth and ward off pests. The
company is also taking advantage of big data and its potential uses for
farming. Monsanto’s inroads into the computing industry are likely to
grow in the coming years.
Although Monsanto has made ethical errors in the past, it is trying
to portray itself as a socially responsible company dedicated to
improving agriculture. As noted, the company still has problems. The
predictions from Monsanto critics about biotech food have not yet come
true, but that has not eradicated the fears among stakeholders. Non-GM
food products are becoming more popular, despite their higher costs.
Faced with the increasing popularity of organic food and staunch
criticism from opponents, Monsanto needs to continue working with
stakeholders to promote its technological innovations and eliminate
fears concerning its industry.
Question 1:
Does Monsanto maintain an ethical culture that effectively responds to various stakeholders?
Question 2:
Compare the benefits of growing GM seeds for crops with the potential negative consequences of using them?
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