Since word leaked this fall that the U.S. Justice Department was investigating Monsanto in connection with possible anti-trust violations, there has been much discussion about the seed and chemical giant's business practices.
An investigation by The Associated Press, published last week in the Capital Press, explained how in the last decade the company's Roundup Ready gene trait came to dominate the corn and soybean seed industry. It also revealed how, through aggressive protection of its patents in its marketing and licensing agreements, the company has maintained that dominance.
Our own reporting chronicled how the Roundup Ready gene is now in 95 percent of all sugar beet seeds, and how the company will potentially benefit from the USDA's finding that Roundup Ready alfalfa does not pose an environmental threat.
By way of full disclosure, Monsanto rarely advertises in the Capital Press.
We can only judge Monsanto by what is on the public record. Based on that, we would be hard pressed to say the company has done anything illegal or necessarily unethical to grow its business.
It has not foisted upon its partners, vendors or customers an inferior product. Far from it. One of the reasons Roundup Ready has become the standard for Midwestern corn and soybean growers is because it works. Farmers like it, and have chosen it.
It has not prevented its competitors from producing a better product using their own innovations. Though it now enjoys an extensive production and distribution system, Monsanto began in the seed business with only the Roundup Ready gene. Its competitors, large and small, employ talented researchers who are working on the next breakthrough product that could displace Monsanto in the marketplace.
It has not forced independent seed companies to produce seed with its patented traits. They have voluntarily signed licensing agreements, with full knowledge of the restrictions and responsibilities those contracts carried, in order to meet the demands of their customers. We have to believe that the seed companies found those contracts to be profitable, or they would not have signed.
It has bought several of these independent seed companies. Critics argue that Monsanto's licensing agreements made it virtually impossible for the companies to accept bids from other firms. If that is true, the seed companies signed those agreements with that knowledge. There is no indication that these companies could not have chosen to continue to operate independently.
It has aggressively protected its intellectual property rights. Any company that spends the money to successfully research and develop a new technology has the right to receive a patent and to control how that technology is used. Without those protections, private research and development would cease. Those who assume risks should also reap rewards.
It has become a dominate player in the corn, soybean and sugar beet markets, and is poised to become big in the alfalfa seed business. That is no doubt troubling to Monsanto's competitors, but is not in itself a crime or unfair. Big can be just as good as it can be bad.
But big does bear watching.
Having attained the dominate position, Monsanto has much greater clout than it once had to impact competition and to fix prices. If evidence can be found that it has done these things, or engaged in unfair practices, or is guilty of anything more than being shrewd and aggressive, state and federal officials should act.
Until the Department of Justice finishes its investigation, we will reserve further comment.