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November 26, 2009

Gates Foundation and Monsanto to develop genetically modified seeds for small farmers in Kenya

by Rachel Keeler

Many of the emotionally charged headlines that drive Africa’s food security debate are intricately connected to the critical and complex Kenyan seed industry: Kenya is the second largest seed consumer in sub-Saharan Africa, and a key driver of agricultural research on the continent. For decades, donors and private interests have been funneling millions of dollars into the Kenya Agricultural Research Institute (KARI), in an effort to develop new plant varieties that can repel pests, withstand disease and produce higher yields.

KARI is now one of the main partners in a new programme funded by the Gates Foundation that will attempt to develop genetically modified (GM) maize that can withstand drought. The plan is to distribute the seeds to small farmers in Kenya, Mozambique, South Africa, Tanzania and Uganda. The technology is coming from Monsanto, the American corporate seed giant that does a lot of work for the Gates Foundation in Africa. Normally Monsanto’s patented seeds come at a high price, which has inspired an endless stream of vitriol from activists who accuse the company of exploiting poor farmers for obscene profits. This time, farmers will receive the seeds royalty free – indefinitely – as part of Gates’ push for a “green revolution” in Africa.

But that has not stopped the critics from questioning the wisdom (and motives behind) introducing expensive farming technology to poor African countries. They also question the implications for human health and the environmental safety of GM food. Anytime you cross poverty, aid, science, and big business, the debates are bound to be endless, and indeed they have been. But what is often missing amidst all the rhetoric is a basic look at how the markets might respond to these developments.

GM seeds are not yet legally available in East Africa. Regulations for Kenya’s Bio-Safety Act are still being developed. Nonetheless, Monsanto has been testing GM cotton with KARI for three years already, and plans to launch trials for GM corn next year. Kinyua M’Mbijjewe, the company’s corporate affairs director for Africa, says he expects legislation to be functional soon, and expects the commercial cotton and corn varieties to hit markets even before Gates’ drought resistance maize is ready – probably within the next five years.
Market Outlook

Is there a substantial demand for GM seeds in East Africa? Hugo Wood, chairman of the Cereal Growers Association (CGA) in Kenya, is convinced that GM would make life easier for both commercial and small scale farmers here. “GM is what we need,” he says.

Most farmers are concerned about two things: high yields and the reduction of chemical usage. GM promises both. The Bt gene would help small-scale farmers enormously, Wood says, by reducing the amount of insecticide they have to buy. Other genes have been proven to boost yields, and Monsanto is working on developing seeds that require less fertilizer, which could reduce one of the highest input costs for small farmers.

“Farmers are ready to accept technology if it’s beneficial and available, and user friendly,” says Rogers Mugambi, head of sales and marketing at the East African Seed Company based in Nairobi. Good seeds are especially valuable to farmers because while seeds account for only about 10% of total production costs, they have a multiplier effect on eventual yields and therefore profits. “If it’s superior seed, we as farmers don’t mind paying more to Monsanto if we get more out of it,” says Wood. “But if it doesn’t benefit me, I won’t buy it again – I’ll go somewhere else. If farmers aren’t getting what they need, they won’t buy it next year.”

GM cotton and corn have already been successful in South Africa and Egypt. And Monsanto is projecting African markets for its products to grow as climate change, population growth and land and water scarcity increase food insecurity. Burkina Faso is the latest African country to jump into GM – small cotton farmers there are now planting thousands of hectares with insect resistant seeds. That’s important to note because unlike farmers in Egypt and South Africa, Burkinabe producers are much poorer than most East Africans. They can spend an entire year farming cotton to make just a few hundred dollars in profit.

“How we price our product takes cognizance of the farmer’s ability to pay,” M’Mbijjewe explains. The farmers in Burkina Faso are paying patent royalties, but not until after they harvest their crops. At that point, farmers take home at least 50% of the extra profits generated by higher yields driven by the GM technology. The rest is divided between seed distributers and Monsanto. M’Mbijjewe says a similar arrangement will be available to small farmers in East Africa.


A recent Reuters report on African agriculture cites Mariam Myatt of the Johannesburg-based African Centre for Biosafety, as saying: “If India's experience is anything to go by, a Green Revolution would leave Africa's farmers as dependent on banks and seed and fertilizer companies as they are now on seasonal rains.” Myatt makes a valid point, but still: which would farmers rather be reliant on? Farmers in East Africa are constantly complaining about a lack of access to credit, with which they would want to buy fertilizer and good seeds. That would lead to predictable production and profits, rather than the region-wide starvation caused when dependence on rain is interrupted by drought.

Monsanto is the largest seed seller in the world, and although they haven’t lately (due largely to competition from China), usually they make rather hefty profits. But the company also sells a product that many African farmers seem to want. And if the seeds they end up promoting in markets in Africa do not work well, there is nothing compelling farmers to buy them. Since the agricultural sector in East Africa was liberalized, Kenya especially has developed an active seed industry. Monsanto has competition here.

EA Seeds’ Mugambi also says a lot more research will have to be carried out to assure farmers that GM crops are safe and reliable, especially as they continue to see reticence in Europe where consumers and governments have yet to accept the safety of GM food. The company will also have to pick and choose the GM varieties it invests in. Farmers who sell vegetables to Europe will simply refuse to grow any modified crops. Promotion of GM cotton seeds will also face market challenges as the US continues to subsidize its cotton farmers and drive global cotton prices down despite multiple rulings against this by the WTO. But farmers who do want to compete with cash crops like cotton on international markets will want access to the same edge that their counterparts in West Africa and South Africa have.

Still, there are serious problems to consider with the Gates-Monsanto model. Farmers in East Africa retain the power of choice at the shop-front level, but they have very little say over the direction of agricultural research here. Farmers groups say they have not been consulted by researchers, and ask how they can attempt to retain bio-diversity and promote local knowledge in the face of Gates’ highly capitalized funding machine that has taken a keen interest in promoting the bio-technology solution.

While Gates has publicly acknowledged that GM technology is only a fraction of the solution to food insecurity in Africa, critics point out that 30% of his foundation’s grants in 2008 went to bio-tech funding, while 79% of the money spent in Kenya went to the same. When foreign philanthropists have such a large say over policy direction at high levels, it greatly limits the choices for consumers down the line, even if market distortions like this and the perverse consequences of aid are of course nothing new. This is all the more frustrating in a country like Kenya, where industry development depends on government action, and the government so often fails to act or be held accountable when it acts badly.

It is important to note that Monsanto has been accused, by multiple sources and respected research institutions, of limiting innovation in seed technology because it controls such a huge share of the global seed market. The Economist speculates that the company could be one of the next targets for anti-trust authorities at the US Department of Justice – an experience Bill Gates’ Microsoft is all too familiar with.

Ratio Magazine

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