Agriculture Reference
In-Depth Information
By the end of the 1990s' multibillion-dollar spending spree, the company was also very cognizant of
its liabilities, and it spun off its chemical operations as a separate company, Solutia. The chemical arm of
Monsanto faced tremendous legal liabilities related to the manufacturing of PCBs, and it declared bank-
ruptcy in 2003.
As Monsanto continued to transform itself into a biotech giant, it merged with Pharmacia & Upjohn
and went through a confusing reorganization that included name changes, spin-offs, acquisitions, and di-
vestments, including selling its artificial sweetener, NutraSweet, to a Boston investment group. Another
game changer for Monsanto was coming up because Roundup's main ingredient, glyphosate, lost its patent
protection in 2000. This opened the floodgates for other companies to manufacture similar herbicides and,
along with the large amount of money that Monsanto had spent in the race to acquire companies, meant
that the company was temporarily short of cash.
In the meantime, the race for humankind's genetic material was charging forward, and DuPont was
eager to take on Monsanto. In the late 1990s rumors flew around Wall Street about a possible merger
between the two giants. Longtime agricultural journalist Al Krebs noted the companies were competing to
be transformed into the biotech equivalent of Coke and Pepsi. He went on to say: “In the three years since
the first transgenic seeds were introduced, crop biotechnology has grown from a young science to a hot
business. . . . Now in a stunningly swift concentration of power, much of the design, harvest and processing
of genetically engineered crops is coming under these two companies' influence.”
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Long before John Queeny established Monsanto, the French Huguenot E.I. du Pont had established
DuPont, the second-largest holder of agricultural patents, with 565. A company that has benefited enorm-
ously from war, it was founded in Delaware by an immigrant who had left France to escape the French
Revolution. The DuPonts went on to become American aristocracy—one of our country's richest and most
prominent families. As a wealthy man trained as a chemist, DuPont saw the opportunity for establishing a
company in America that made high-quality gunpowder. The company expanded quickly, and by the time
of the Civil War it was able to provide half of the gunpowder used by the Union armies and moved into the
production of dynamite and newer types of gunpowder. In the early years of the twentieth century, under
the leadership of the founder's great-grandsons, the company bought several smaller chemical companies
and reinvented itself as a chemical company; it went on to develop a range of products, including nylon,
Teflon, and Lycra. DuPont emerged as a leader in biotechnology a century and a half after it was founded.
In 1997 DuPont acquired an interest in Pioneer Hi-Bred, the world's largest seed company. Although
it was first established in 1926 as Hi-Bred Corn Company by Henry Wallace and a group of Iowa busi-
nessmen as a way to commercialize the hybridization of corn, the company added the word Pioneer in
1935 to distinguish it from other corn seed companies. Wallace probably would be shocked and appalled
that the company he founded was purchased for $10 billion by DuPont in 1998. Wallace, who as a young
man helped develop hybrid corn varieties with high yields, was secretary of agriculture during Franklin
Roosevelt's first two terms and vice president during his third. A strong and vocal advocate for farmers, he
lost his bid for the presidency on the Progressive ticket in 1948.
The company Wallace founded went on to be a giant in the seed business that invested in research. It
went public in 1973 and merged with a number of companies. By 1981 it dominated sales of corn seed, and
by 1991was the number one brand of soy seeds. It partnered with Mycogen Seeds to develop Bt insect res-
istance in corn, soy, canola, sunflower, and other seeds. Bt is an abbreviation for the name of a bacterium
that is toxic to insects but nontoxic to humans. Widely used by organic farmers, there is significant concern
that the use of this genetic material will lead to the emergence of pests that are resistant to the Bt toxin,
making it worthless for organic cultivation.
Pioneer went on to purchase the rights to Roundup soybean seeds from Monsanto in 1992 and the rights
to Bt corn that is resistant to European corn borers in 1993. With its full acquisition of Pioneer in 1999,
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