Remember those farmers in Food Inc. who got sued by Monsanto for saving seeds and using them from year to year? They’d been saving their seeds for decades, picking the best ones to save each year and replant the next, to end up with the best possible corn crop.
But some of Monsanto’s genetically modified seeds drifted over to their farm from neighboring crops, and because those seeds became mixed with the seeds the farmers had bred for decades, and because it was impossible to separate those seeds from their own, they had to stop using their seeds.
Why? Because Monsanto’s patent on its seeds not only prevents others from making and selling similar seeds, but also prevents farmers from saving seeds produced by the crops they grow with the seeds they initially purchased from Monsanto. The idea is that Monsanto can sell these seeds to farmers year after year. If the farmers were allowed to save the seeds their genetically modified crops produced, then Monsanto would only be able to sell these seeds once. In following years, farmers could simply grow their crops with saved seeds.
The Supreme Court will decide whether Monsanto will continue to be allowed to prevent farmers from saving their seeds, in a case focusing on its soybeans specifically.
For Monsanto, the stakes are high. The company sold $1.77 billion worth of its genetically modified soybeans. Gross profits from the soybeans, which reached 1.16 billion last year, made up 16% of its revenues.
But in reality, the stakes are even higher than that. The GMO business may survive even if Monsanto is ruled against; sales to customers who’ve already bought the seeds in prior years are enormous but not necessarily imperative, as Monsanto could still sell new seeds to farmers who haven’t bought in the past, and even to those who have in the event that Monsanto from time to time adds a meaningful new innovation. This would very significant blunt Monsant’s revenues and profits from year to year, but it could still leave Monsanto with a very profitable business.
But if the shock to Monsanto’s business model is significant enough, an adverse Supreme Court ruling could go some ways to dulling biotech firms’ interest in creating new GMO strains. Certainly, their new creations would have less potential for profits than the ones they’ve created up until now. Biotech firms may not invest the same time and resources into future products that they have in the past.
It’ll be interesting how it all plays out. I’ll keep you posted when the case is heard and ultimately decided upon. But this will be some time down the road.