(Beyond Pesticides, January 3, 2008) The US Department of Agriculture (USDA) has struck an arrangement with agribusiness giant Monsanto Co. that gives farmers in four states a break on federal crop insurance premiums if they plant a majority of Monsanto-brand seed corn this spring. Farmers in Illinois, Indiana, Iowa and Minnesota need to plant 75-80% of their crops with Monsantoâ€™s (and only Monsantoâ€™s) GM seeds to receive the â€śpremium rate discountâ€ť. The arrangement has raised some eyebrows, particularly among organic farm groups that argue the government agency should not be promoting corn that promotes herbicide use; the Monsanto brands are resistant to Roundup (main ingredient, glyphosate) and contain chemicals that kill insects and other plants.
Monsanto’s deal is legal, according to USDA officials, who point out that such arrangements were encouraged in a 2000 crop insurance passed by Congress. The idea is to give farmers a break on their insurance premiums if they use corn seeds that are higher yield and show resistance to insects and other threats. USDA officials said they are aware of the appearance of favoritism toward one of the nation’s largest agricultural companies. “We knew it would look that way,” said Shirley Pugh, a spokeswoman for USDA’s Risk Management Agency, which administers federal crop insurance. “But other companies can come and do the same thing. We are making the discount available because the corn has shown the traits necessary to reduce the risk.”
The deal with St. Louis-based Monsanto was approved September 12, 2007 under a provision called the Biotech Yield Endorsement (BYE) program, which is part of the Agricultural Risk Protection Act of 2000. No other companies have taken advantage of the program, Pugh said. The insurance premium benefit to farmers, according to USDA, will be about $2 per acre, or $2,000 for a typical 1,000-acre farm. Crop insurance prices have skyrocketed for farmers as corn prices have reached near-record highs in recent months. Today, corn trades at about $4 a bushel, double the price of about two years ago. Those prices have continued to stay high because of increased demand from the ethanol industry, which uses the grain to make fuel, as well as increased corn exports and demands from cattle-feeding businesses. Crop insurance rates can be as high as $50 an acre, according to Kurt Koester, a vice president and co-owner at AgriSource Inc., a crop insurance agency in West Des Moines, Iowa, involved in the pilot program. Several years ago, Koester said premiums were about $15 to $20 an acre. “Farmers are going to face some really tough decisions here,” Koester said. ‘They’ve got this high-value corn sitting out in their fields. When you take the cost of this crop insurance, even with government subsidies, there’s going to be sticker shock.”
The pilot program with Monsanto covers the country’s four most productive corn states. It involves corn that contains YieldGard Plus (which protects against corn borers and rootworms) with Roundup Ready Corn 2 (which tolerates the herbicide Roundup) or YieldGard VT Triple technology from Monsanto, the company said. The deal with the Agriculture Department was finalized this month. The corn grown is generally used as cattle feed and as raw material for ethanol plants. Monsanto won the BYE designation by providing three years’ worth of research that convinced the USDA’s Federal Crop Insurance Corporation board that its triple-stack corn variety produces higher yields under difficult conditions, such as weeds and corn borer.
“It really bore out what we’ve heard from our farmers, saying over and over again that these triple-stack technologies in the corn plant help protect against weeds and root worms,” said Darren Wallis, a Monsanto spokesman. “What this does is reduce the risk for the farmers.”
Monsanto, however, has earned the wrath of organic agriculture and environmental groups, mostly for promoting the growth of genetically altered crops. Ronnie Cummins, national director of the Organic Consumers Association, characterized the USDA-Monsanto BYE arrangement as one of many examples in which the department has sided with big agribusinesses instead of smaller farmers and farm groups. He said the BYE program will leave farmers with little choice but to buy Monsanto seed. “We definitely have a problem with all the benefits that [Monsanto] gets,” Cummins said. “If you really look at our crop subsidy program and what’s given to farmers, you really see a lot of those subsidies going to purchase genetically engineered crops.”
Cummins also said that the USDA-Monsanto arrangement excludes organic farmers. Most of the corn acreage in the four states involved is insured, according to USDA figures. Of the 11 million acres planted in corn in 2006 in Illinois, about 9 million acres, or 79 percent, had federal crop insurance, according to USDA. In Indiana, 68 percent of corn acres were insured, in Iowa, 87 percent and in Minnesota, 89 percent.
Source: Chicago Tribune