MONSANTO COMPANY – DOING BUSINESS IN INDIA

Submitted by: Manimala Paul, Bharti Khurana, Ridham Gupta & Rajnandan Kumar

ABOUT THE COMPANY The Monsanto Company is a U.S company

Based on multinational agricultural biotechnology corporation.

It is a sustainable agriculture company which provides agricultural

products that supports farmers all over the world.

Founded at St. Louis, Missouri, U.S. in 1901

John F. Queeny founds the original Monsanto. The first product of

that company was saccharine.

Chairman: Hugh Grant

Headquarters are at Creve Coeur, Missouri, U.S.

CONTINUED…… Monsanto India Limited (MIL) - a subsidiary of the

Monsanto Company, USA

MIL started Indian operation in 1949

Mil focus is on Maize Cultivation and Agricultural

productivity

Two famous products of MIL are:

DEKALB (Maize Seed)

Roundup (Herbicide)

EVOLVING AGRICULTURE PRACTICE IN INDIA

-Agriculture is major occupation in India 143 HH

-13%-20% contribution in the GDP

-1950 to 1980 saw huge change in agriculture practises

-In 1988 New Seed Development Policy

Issues faced: difficulty in attracting & retaining experienced professionals

MONSANTO CORPORATE STRATEGY

Earlier Monsanto was mainly focussed on agricultural

and chemicals product [seeds, herbicides]

But in 1980’s there was a shift in the focus of the

company to biotechnology products

In 1996, company got a breakthrough in marketing

biotech seeds

Monsanto decided to emphasize more on “Sustainable

Agriculture” in the coming years

Sustainability

Planet

PeopleProfit

SUSTAINABLE AGRICULTURE

Profit• By increasing the

production People

• By educating the farmers (nutrient cycling, nitrogen fixation, renewable inputs)

Planet• By saving the soil and

crops from harmful chemicals

SustainabilityProfit + People + Planet

EXPANDING BIOTECH CAPABILITIES

CORN SOYABEAN

COTTON CANOLA

Monsanto, in June 2008, announced its 3 sustainable commitments;• Increase global food production• Efficient use of natural resources• Development of seeds according

to changing environment

• Monsanto investing 10% of sales in R&D whereas other competitors just

5% of it

• Their 65% of revenue comes from herbicides

• Two major strengths : Breeding and Genetic Engineering

• Acquired Germplasm (or seed bank) – and used modular marketing

technology to identify desirable traits

• Now, the trait of Bt was embedded into the seeds – plants uses it to

protect themselves.

MONSANTO IN INDIA

MIL• A publicly listed

company

• It manufacture and markets Roundup herbicide and DeKalb corn hybrid seeds

MMB• JV between

Mahyco & Monsanto

• It marketed the Bollgard Bt cotton trait technologies

MHPL• It manufactured

and marketed Paras Bollgard Bt cotton hybrid seeds & Seminis vegetable hybrid seeds

COTTON & CORN AGRICULTURE

Monsanto's scientist isolated a protein from a naturally occurring

soil bacterium Bt and inserted it into the cotton seed genome

Pesticides sprays were reduced from 30 times to 10 times to once

or twice per season

Bollgard-II, a superior double gene technology provided

protection from bollworms and caterpillars

Benefits: Educating the farmers, Forming PPPs, Increase crop

yields & Increase income levels

RECENT EVENTS IN INDIA

Anti- Biotech Activists:

• Some environmental activists perceived “biotech as an unwarranted interference

in the process of natural selection” and some argued that “cultivating biotech

cotton is more expensive” than organic cotton because of higher cost of seeds,

technology fees, increased use of chemicals and farmers have to buy biotech seeds

from the seed company each season. They claim that in organic agriculture, seeds are

saved and cultivated the following season.

• Industry responded by showing their studies where insecticide use had reduced by

41%, average yields had increased by 30-40% and farmers earned a mean profit

gain of 89%.

Price controls on Cotton:

Cotton was the only biotech crop where the provisional government had

set a price ceiling.

Objective was to prevent farmers from being exploited by the traders and

ensure the supply to consumers.

In the sugar industry also ,the government controlled the price by setting a

FRP at the raw material stage (sugarcane) and MSP at the finished

product stage (refined sugar).

Reversal of regulatory approval for Brinjal:

The insect protection biotech brinjal developed by Mahyco (Monsanto’s

joint venture in cotton) had secured regulatory approval in October 2009

but the Federal Ministry overruled the regulatory approval.

ISSUES CHALLENGING STEINER

Erosion of margins on cotton:

In April 2009, a price ceiling was imposed on biotech cotton seeds by local

state Government.

The government directives had transformed biotech cottonseed into a money

losing proposition as it challenged seed companies’ ability to cover the cost

of producing seeds & to earn a return on their annual investment.

Running a Marathon:

Agricultural R&D was like running a marathon

Monsanto has to maintain an active R&D to bring new products and better

and advanced technology.

It also has to reinforce with farmers the need for using good stewardship

practice to increase efficacy and usefulness of the crops.

THANK YOU….