Over the past few years, Monsanto, a chemical company, 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 Calagene, 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, Monsanto
purchased Cargill’s seed operations for $1.4 billion. It bought Delta and Pine
land for $1.82 billion and Dekalb for $2.3 billion. It bought Unilever’s
European wheat breeding business for $525 million. In India Monsanto has bought
Mahyco, Maharashtra Hybrid Company, E.I.D. Parry and Rallis. Mr.Jack Kennedy of
Monsanto has stated "We propose to penetrate the Indian Agricultural sector
in a big way. MAHYCO is a good vehicle." According to Robert Farley of
Monsanto "what you are seeing is not just a consolidation of seed
companies, it is really a consolidation of the entire food chain. Since water is
an 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 in water 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 business to profit even more significantly
when these discontinuities occur. Second, we are exploring the potential of
non-conventional financing (NGO’s, 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 net income of $63 million by 2008 from its water
business in India and Mexico. By the year 2010 about 2.5 billion people in the
world are projected to lack access to safe drinking water. At least 30% of the
population in China, India, Mexico and US is expected to face severe water
stress. By the year 2025 the supply of water in India will be 700 cubic
kilometers per year while the demand is expected to rise to 1050 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 stated "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 – 30% in rural communities and is
estimated to be $300 million by the year 2000 in India and Mexico. This is the
amount currently spent by NGO’s 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 market.
The Indian Government spent over $ 1.2 billion between 1992-97 for various water
projects whicle the World Bank spent $900 million. Monsanto would like to divert
this public money from public supply of water to establishing Monsanto’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 NGO’s as well as through innovative financing 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% 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. Monsanto will also buy a Japanese company which has developed
electrolysis technology. 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 in
aquaculture. The aquaculture business 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 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 of India had banned
industrial shrimp farming because of it’s catastrophic consequences. However,
the government, under pressure of the aquaculture industry, is attempting to
change the laws, to undo the Supreme 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 new Water
Business and Aquaculture business. The World 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 Business, like it’s seed business, is aimed
at controlling 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. The right to water is the right to
life. The privatisation and commodification of water is a threat to the right to
life. India has had major water movements to conserve and share water. The Pani
Panchayat and the water conservation movement in Maharashtra and Tarun Bharat
Sangh in Alwar, have regenerated and equitably shared water as a commons. This
is the only way that 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.