DuPont vs. Monsanto – A Tale of Two Companies

August 24, 2009

By Jerry Glover

Over the last couple of days, Monsanto and DuPont have been in the news. So what’s this all about? Is it just some spitting match between two competitors? A complicated legal wrangling? Or is it something else entirely?

There’s a lot of history here.

Thirty years ago, Monsanto and DuPont were both chemical conglomerates, and both had agricultural divisions primarily making and selling pesticides. As the science of biotechnology began to develop, the two companies took very different paths. Monsanto bet the farm on biotech and its application in agriculture. DuPont consciously chose not to invest in agriculture biotech at that time.

For 15 years, DuPont seemed to have made the wiser decision. But in the mid-1990s, Monsanto commercialized the first Roundup Ready trait, and farming was made far easier.  DuPont and other companies made the decision to also invest heavily in biotech, but it’s hard to make up for lost years in this business.

Because the future of agricultural biotech was in seeds, both Monsanto and DuPont (and others) bought seed companies. Pioneer Hi-Bred, long the leading seed company in the U.S., was bought by DuPont in 1999. In the late 1990s, Monsanto’s research engine, fueled by outstanding work in biotech and breeding, began to roar. New products continued to be introduced for corn, soybeans and cotton farmers. Pioneer licensed the Roundup Ready trait from Monsanto, as did many other seed companies. The trait continues to be successful because of what it does for growers.

In the mid-2000s, DuPont  announced it was developing a product it eventually called Optimum GAT (OGAT). DuPont repeatedly said that OGAT would eventually replace the Roundup Ready trait they licensed from Monsanto.

That was understandable. It’s the nature of competition, and farmers need and want innovative products. Monsanto was ready for the challenge and well on the way to delivering new technology in the form of Roundup Ready 2 Yield Soybeans. If DuPont was successful with OGAT, then farmers would have a choice between the two technologies based on which one provided them with the best value.  Check out the timeline of Optimum GAT technology.

But then DuPont began changing its projected timeline for commercializing OGAT, delaying it by years.  Development of commercial biotech traits is not an easy task – especially for an alternative Roundup Ready trait.  Monsanto suspected something was up.

When DuPont went all-out to stop Monsanto’s proposed acquisition of the Delta and Pine Land cotton seed company in 2007, at first we were surprised, because DuPont was not in the cotton seed business in the United States. The bigger surprise, however, was how DuPont was mounting its opposition – hiring lobbyists; seeking to get state attorneys general to file investigations; having agents send letters to elected officials, some of which  turned out to be forged; and (as we just recently learned) funding activist organizations like the Organization for Competitive Markets.

None of this made much sense. DuPont was hiring firms to attack Monsanto and funding activist groups that oppose enforcement of a companies’ intellectual property rights (IPR). How could they not agree on the importance of patents and IPR?

It didn’t make much sense – unless you connected the dots and looked at what DuPont was saying about OGAT. The timeline for commercialization kept getting delayed and DuPont stopped talking about its product replacing Roundup Ready. Soon, they started talking about stacking OGAT with Roundup Ready which they couldn’t legally do since they had never purchased that right from Monsanto. They didn’t need to do it when they thought they had their own glyphosate tolerant alternative, but now they were stuck.

They could wait until after 2014 when the Roundup Ready trait in soy goes off-patent, pay Monsanto for the right to use its still patented technology, or create a huge smokescreen about Monsanto’s business practices and hope they’d get someone to buy into it. They chose the latter path.

It’s a scorched-earth approach they’ve undertaken. We’ll continue to compete by being an innovator who brings value to the farmer by inventing things farmers want and need. DuPont has clearly chosen another path.

Jerry has been with the company for twenty years, through Monsanto’s evolution from chemicals to seed. He is the lead of Monsanto’s Public Affairs department. When not in the office, Jerry enjoys playing golf.

One Response to “DuPont vs. Monsanto – A Tale of Two Companies”

  1. Kelly Zachgo Says:

    If memory serves me correctly, it was Pioneer who first achived stable transformation and actually inserted the RR gene for Monsanto. Too bad the marketing agreement wasn’t in place.

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