How the Ag Industry Got to Now
A Brief Look at the Workings of Agribusiness
I firmly believe in two things; empathy and agriculture. Believing in them simultaneously isn’t easy, because the industry that fulfills one of our most basic needs has also been, at times, one of the most complex, convoluted, and corrupt. The US agribusiness world, populated by those companies that serve farmers by selling them inputs; machinery, seeds, chemicals, and advice, is almost as old as farming itself, and its history is as mired by controversy and screw-ups as any.
So the question is, which came first? Was the agribusiness industry perverted at the moment it came into being (perhaps at the moment the cotton gin was first invented, or the gas-powered tractor, or nitrogen fertilizers, or RoundUp), or is the current state of the industry really just the crooked but natural growth of savvy entrepreneurs around the barriers that already existed? Did something go wrong, or were we destined to end up here?
An Honest Attempt to be Fair to Monsanto
The portrait of Monsanto is a good one to illustrate how we got to now in agribusiness (it also happens to be a company that most people have an opinion about, informed or otherwise). Dissimilar to the likes of John Deere, Mosaic, or ADM, Monsanto did not get its start in agriculture. Monsanto was, from 1901 until the mid-1980s, just a chemical company. The history of pre-agricultural Monsanto swings wildly from admirable to despicable; company scientists assisted the US government with the Manhattan Project, helped in the fight against Malaria with DDT (but then again, also produced DDT), won Nobel prizes, produced Agent Orange, and supported ground-breaking Harvard cancer research.
To me, this context explains a lot about the Monsanto we know today, the company’s intimate, century-long relationship with the US government and the power they wield over universities and research institutions makes more sense. Monsanto spent a good part of its life basically as part of the military, and when it wasn’t helping the US government reach it’s security goals, it was focused on the science- on developing the future of chemistry with applications ranging from medicine to LED lights. Neither of these things is wrong, on the contrary, we celebrate a lot of companies that are doing these exact things. Boeing supports our government’s current wartime efforts without too much backlash, and Silicon Valley is chock full of companies who are focusing on the science and technology while ignoring any other potential implications (Uber comes to mind).
And then in 1983, Monsanto scientists were among the first to genetically modify a plant cell, and the entire trajectory of the company began to change. In fact, after many spin-offs, mergers, and a complete divestiture from all non-agricultural businesses, Monsanto literally became a new company in 2000. The competencies they mastered in the chemical industry; a dedication to the science, to keeping desired results from contaminating the actual results, and to pushing the envelope in terms of achieving important outcomes, made them a cutting-edge ag company right out of the gate, but the rules that they had always followed were now different, and this reality is at the core of a lot their issues.
What Monsanto lacked was adequate caution and perspective. In many cases, pushing the envelope is important, but when you’re talking about putting plants and chemicals on huge swaths of the total surface of the Earth, the risk of doing so rises astronomically. Monsanto is not the first company or organization to put progress before prudence, and they certainly won’t be the last. (In fact, the Nobel Prize exists as a reminder and warning of our tendency to do so.) I’m not saying that excuses them, but it is, at least, understandable.
One way that Monsanto got around knowing the rules of the agricultural world is by rewriting them. Monsanto’s relationship with the US government has only grown since they refocused on agriculture, it spent $6.3 million in lobbying in 2011. One of the more unscrupulous examples of how this plays out was reported in the NYTimes by Mark Bittman in 2013:
That corporation… recently managed to have an outrageous rider slipped into the 587-page funding bill Congress sent to President Obama. The rider essentially prohibits the Department of Agriculture from stopping production of any genetically engineered crop once it’s in the ground, even if there is evidence that it is harmful. That’s a pre-emptive Congressional override of the judicial system, since it is the courts that are most likely to ask the U.S.D.A. to halt planting or harvest of a particular crop. President Obama signed the bill last week…”
Is this fair? No. Should this be legal? No. But is it? Yes. At this point, that’s on us. Lobbying in the US is completely out of control, and at some level, companies (in and out of the ag industry) have begun to see lobbying as a necessary part of doing business. This is corruption in it’s purest form.
But the other side of the lobbying story is about science. Federal funding for agricultural research has not increased in the past 30 years. That means that in real terms, the US is spending less on ag science today then they were in the 1980s. Contrast that with the amount of research the US government funds or supports on human health, energy, security, environmental quality, and even industry, that constitutes shameful neglect on the part of our government in supporting the people that keep us fed.
This lack of support for basic research means companies like Monsanto are left to do this research themselves. Research in pharmaceuticals is similar; companies spend decades and millions of dollars developing a single drug. The problem is, they need to recoup all that time and money they made producing it before the patent runs out (after about 7 years), which means that branded (read: patented) drugs (like patented seeds and chemicals) tend be very expensive.
This is one of the biggest factors that goes in to how we got to now. Because the government has failed to support agricultural research, agribusiness has been required to incur massive costs to power new technologies and products, and Monsanto (and others) needs to charge a premium on seeds and chemicals to farmers who are making only razor thin margins on commodity goods.
This is inevitably the part of the conversation where someone asks, “why do farmers even buy Monsanto seeds and Roundup then?” I feel like the appropriate response is, “Why do you own a smartphone when pencils and paper exist? Why would you ever take a prescription medication when there’s Tylenol? Why would you ever drive a Tesla when you can drive a Hummer, or for that matter, a bicycle?” Since when did we start disdaining the adoption of new technology, particularly technology that makes you better at your job or (in the case of insect-resistant GM seeds) allows you to be more environmentally friendly.
Companies like Monsanto have also, at the very least, failed to empathize with their farmers. On the one hand, the cost of doing research does not change with commodity prices, so in some ways, Monsanto doesn’t have the luxury of lowering their prices when farmers simply aren’t making what they were. But on the other hand, they haven’t tried very hard to find better solutions. The main solution they’ve had is financing- but by letting farmers put off paying to a better year, they are in reality magnifying what the farmers owe and trapping them in a cycle of unwilling customer-hood.
Monsanto is now a biotech company, and they do good research. They’ve nailed the biotech half of the description. Now it’s time for them to remember what being a company means, mainly, being responsive to the wants and needs of their customers, farmers. The path that the company is on, towards a relationship with their customers based mostly on extracting rents is an unsustainable business model ripe for disruption.
The Bottom Line
At the end of the day, it might feel like the answer to this question doesn’t really matter. Whether or not agribusinesses like Monsanto are evil or just reacted to existing conditions seems irrelevant to the fact that today, right now, they tend to take advantage of farmers, policymakers, and maybe even consumers.
But it does matter. It matters because Monsanto employs more than 25,000 humans who (hopefully, for their own sakes) believe that they are doing right by farmers. Who care about doing right by farmers. Who care about doing good science and about the future of the planet and about feeding people. They are good people. And with good people at the helm, we can believe that they can find more creative, more positive solutions for the challenges they face, and that they will be candid about past missteps.
Farmers have an important role to play here too- and it’s not to walk away. It’s to keep agribusiness honest. Keeping someone honest means staying informed and questioning any information that you find on the products you buy and the companies you do business with. Ag is a loyal industry, but loyalty is a two-way street, the cost of hanging a branded sign up in your shop, wearing a branded cap, driving a colored tractor, or planting a seed should be a square deal, and the only way to know you’re getting a good deal is to shop around, to communicate openly yourself (and demand that others do the same), and to collaborate as often as you can with other farmers.
There’s always two sides to a story. I find that farmers tend to get this narrative more than the average millennial I bump into on the street, but that’s because the average millennial has never met a Monsanto employee. It’s harder to believe a company is pure evil when one of their employees farms down the road from you and came to your kids’ graduation. It’s easier to believe when you see a picture of the CEO who is, I’m sorry to say, the most comic-book-villian-looking person I’ve ever seen.
I always feel obligated to end with a plea for technology. Mostly because there is so much good stuff out there just waiting to reach its full potential on US farms. Sharing information, collaborating, being part of a wider conversation that gives farmers a real voice in a conversation that’s too often dominated by agribusiness people, policy-makers, and frankly, fringe coast-dwellers like myself who should not be the voice of the future of farming. Staying open and curious about new ways of doing things, staying skeptical about the status quo and about anyone promising to “feed the world” or to “change the way you farm”, and staying humble enough to know that we could always be doing better- that’s the way forward.
Thanks for reading. If you enjoyed this, a click on the green heart below would be wonderful. Looking forward to comments from disagreers! Then, you might enjoy exploring the intersection (or lack thereof) of farming and the Food Movement. @Sarah Mock
