WATERWATCH-L Monsanto and water privatization
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 life.=A0 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 ustainability
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,=A0
"Water is the last infrastructure frontier for private investors."=A0 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=20 evelopment
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 million.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 feedand 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 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 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.=A0 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.
Kathleen Cooper, Researcher
Canadian Environmental Law Association
517 College Street, Suite 401, Toronto, Ontario M6G 4A2 tel: 416-960-2284 fax:416-960-9392
email: cela@web.net internet: www.web.net/cela
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