GENTECH archive


Monsanto's expanding monopolies into water supply - THE HINDU, May 1, 1999

[Thanks - Lynette]

THE HINDU, Saturday, May 01, 1999
By Vandana Shiva
(The writer is Director of the Research Foundation for Science, Technology
and Ecology, New Delhi.)

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

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
Agrocerus 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

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

 "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. 

*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this material
is distributed without profit to those who have expressed a prior interest
in receiving the included information for research and educational
purposes. ***