http://www.hinduonline.com/today/stories/05012524.htm
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.
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 sustainability 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, "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 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 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 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 feed and 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.
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.
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