Bayer may give GMO new lease on life

Putting Monsanto out of its misery could shift future debates about genetically modified crops to arguments based on fact rather than emotion.

Agricultural chemical and seed technology giant Monsanto is arguably the most detested company in the world.

But Bayer’s acquisition of St. Louis-based Monsanto will likely mean the latter (or at least its brand) will slowly disappear.

While we have seen several acquisitions in the agri-food sector in recent months, this one is different.

Germany-based Bayer and Monsanto recently announced the acquisition at nearly US$130 a share, more than $65 billion in total. The deal comes after months of discussions between the two companies.

The combined companies are an agricultural behemoth that will be the market leader in North America, Europe and Asia.

From a business perspective, the acquisition makes sense. New markets can be developed for Monsanto’s products, while Bayer gains access to considerable intellectual property in crop science and seeds. Bayer also gains a comprehensive portfolio of chemicals and products to help farmers increase yields.

Bayer’s brands will likely dominate the portfolio of products and it’s difficult to see how the Monsanto brand will survive over the long term.

There are obviously risks with the acquisition, but many argue that the Bayer-Monsanto marriage has a better chance of succeeding than Monsanto’s failed attempt last year to acquire Swiss-based Syngenta.

Then, it was a North American giant attempting to buy a company in GMO-hating Europe. That would have likely been impossible to get past regulators. The deal with Bayer is the other way around, a European-based company buying into North America.

A backdrop to this has been the long-standing public outcry against Monsanto’s tactics.

For years, company leaders seemed to think their science-based approach validated their goals. But they failed to properly engage the public until it was much too late.

March Against Monsanto has campaigned broadly for years. Protests across dozens of countries and more than 400 cities served as evidence that the company’s communication efforts have failed miserably.

The marches were held worldwide and aimed to raise awareness about genetically modified seeds, labelling and potential health risks caused by the use of unwanted herbicides. With the help of social media, the opposition gained steam. The state of Vermont, for example, made GMO labelling mandatory this summer and other states are considering following suit.

This anti-Monsanto backlash is the legacy of a company that chose to behave as if the collective rejection of its model didn’t exist. It was in denial for a very long time.

There is actually compelling science showing that genetically modified crops are safe, so the anti-Monsanto movement seems less about GMOs than it is about the company itself.

Monsanto felt so confident about its science-based approach in a science-dominated corporate culture that social optics were never really seriously considered until it was too late.

By having science on its side, the company seemed to believe there was no need to answer public concerns.

But adversaries of Monsanto’s business model have successfully exploited the fact that trust has more currency than science. That’s the golden rule when it comes to communicating about potential risk, and Monsanto ignored it.

Much too late, Monsanto recognized it had lost control over public perceptions and gaining social licence was impossible.

Accepting Bayer’s buy-out offer suggests Monsanto recognized that it had misread the market and was unable to salvage its position.

Monsanto’s end will be met with delight from many environmentalists. But now it’s time for a rational conversation about biotechnologies.

Science deserves its place, of course, but consumers must remain part of that conversation moving forward.

Sylvain Charlebois is dean of the faculty of management and professor in the faculty of agriculture at Dalhousie University. This column was distributed through Troy Media.

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