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<nettime> Monsanto aims to control water
nettime's_roving_reporter on Wed, 15 Dec 1999 18:10:52 +0100 (CET)

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<nettime> Monsanto aims to control water


by Dr. Vandana Shiva

ZNet article Fri, Jul 30, 1999

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

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 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 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 which 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 its 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 its 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.

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