Dirty Little Secrets in the Dirt – Part 2
© Copyright 2009
We have seen a progression of ‘Dirty Little Secrets‘affecting the soil, the relationship of plants and animals (including ourselves), to soil. We have looked at our obsession with or our affinity with soil and found that the very elements which should be in soil should also, be in our bodies. We are in essence, dirt or soil. We have looked at pH with a view towards an understanding of the key word ‘balance’ and have seen much is, out of balance! We have looked at the sterile products in developing hybrid plants. If the ‘dirty thirties’ messed up the dirt, ‘funkicide 50’s messed up the dirt, and we’re dirt, what would ‘They’ think of next? How about what goes into the dirt? Right, mess up not just the plants, but the seeds!
Quietly, in another country, ‘This Dirty Little Secret‘was just beginning. His record as a businessman suggests he has an eye for undervalued assets. In 1985, he bought Cigarrera La Moderna, Mexico’s largest cigarette company, for $85 million. In 1997, he sold that business for $1.5 billion. It helped that during his ownership of the company, Mexico’s liberalized markets, allowed him to raise prices. “Things broke my way,” he says.
Alfonso Romo Garza is an aristocrat. His ancestors include a Mexican president. He became best known outside Mexico for having founded one of the world’s richest prizes for horse jumping. It is difficult to isolate specific information about him, but careful scrutiny will show his name popping up from his seeds, almost everywhere in the world.
Outside of Mexico he was virtually unknown, but quickly and quietly, his pursuits turned to seeds. In a short period of time, he became the Global King of seeds and most people never knew that or recognize his name, even today. His title is not one that any previous seed seller ever held or sought. Why should they? Vegetables seeds are a low-margin, slow-growth, and an uncreative business. Even by the standards of the agriculture industry, vegetable seeds are as boring as dirt. But this man had an entirely different vision.
We have already seen DuPont acquiring Pioneer Seeds and they paid millions for Monsanto’s soybeans, which were resistant to Monsanto’s very own ‘Round Up,’ broad spectrum herbicide.
While Alfonso Romo Garza was quietly cornering the vegetable-seed business, the giants of the world-wide chemical industry were snapping up the sellers of seed for corn, cotton and soybeans. These are the BIG-MONEY CROPS!!. They feed the plant food factories and textile mills. By altering the genes of these crops, the chemical giants are creating new foods such as synthetic meat, as well as medical products, such as antibiotics.
The chemical companies were so absorbed in buying up the crop-seed business – Monsanto (there is that name again), had spent nearly $8 billion on that pursuit. They paid little attention to the items people buy in the produce section of their local store like: lettuce, tomatoes, peppers, carrots, broccoli, cucumbers, squash. This business is minuscule compared with industrial crops such as corn.
Still, fresh produce in North America was, is, and has, a huge market. What if sweeter fruits, tearless onions and ‘pretty’ fruits and vegetables could be engineered? By the time the chemical companies saw the potential to do just that, most of the seeds in the world, already belonged to a Mexican billionaire named, Alfonso Romo Garza. Any plans to genetically enhance food, had to pass through him, his companies or those he controlled.
Garza set out to acquire companies that sell vegetable seeds. Quietly, he bought five in the U.S., two in Europe, and three in Asia and one in South America.
Soon, 40% of all vegetables sold in the U.S. supermarkets were derived from his seeds. Half of what we eat from most restaurants in the U.S. is from his seeds.
“In a short period of time, Alfonso has become a major factor in biotechnology,” says William S. Stavropoulos, chief executive officer of Dow Chemical Co., which also pushed into agro-biotechnology.
Latin America had not produced a bumper crop of new technologies. Mexican billionaire Alfonso Romo Garza set out to change that. The chairman and majority owner of Pulsar Internacional, a $2.8 billion Mnterrey-based holding company, pushed to make Pulsar, a global leader in biotechnology. His company’s specialty: hybrid vegetable and fruit seeds that produce high-yield, disease-resistant crops. ”More Mexican companies have to move out of old-style industries and into new technologies,” Romo said.
For the past several years, Pulsar’s agricultural subsidiary, Empresas la Moderna, had been snapping up biotechnology companies around the world. Now, with a global network of 56 biotech labs, Romo boasted of one of the world’s most extensive seed banks of varieties bred to thrive in many climates.
Romo, a descendant of early-20th-century President Francisco Madero, started in business in the early 1980s with a bakery chain. Backed initially by investors including his father-in-law, a member of Monterrey’s powerful business elite, he added a cigarette maker, a packaging company, and an insurer. Trained as an agricultural engineer, Romo helped his tobacco suppliers by passing on hybrid seeds and modern curing methods. But sensing that the global tobacco business was becoming too competitive for local players, he sold the cigarette company to BAT Industries PLC for $1.7 billion. He spent some of that cash to buy two distressed Korean seed companies and expand them.
Monsanto (again), had agreed to apply its biggest biotechnology breakthrough to Romo seeds. Scientists from Romo’s company, Empresas La Moderna SA, placed in a lettuce, a gene that gives it immunity to Roundup, a Monsanto herbicide.
ELM, which supplied over half of the lettuce seeds used by U.S. commercial farmers, sold the altered seed for at least two times the price of conventional lettuce seed. They went into agreement with Monsanto to split those premiums 50-50. In another venture between the two companies, ELM planned to use Monsanto technology, to make bug-resistant plants.
Besides accumulating a storehouse of seeds, ELM performed its own breeding experiments, and its scientists have placed hit products on the shelves of U.S. supermarkets. Mr. Romo’scompany lowered the heat factor of the jalapeno pepper, helping salsa pull even with ketchup in the U.S. in dollar sales. The baby carrot, one of the most successful innovations in the produce section? His plant breeders invented it
It was with ELM’s seeds that Vlasic Foods International Inc. grew the novelty of cucumbers that would yield a hamburger-size pickle slice, designed to lie perfectly between a pair of buns. Mr. Romo’s company received U.S. regulatory approval to sell squash, genetically altered to resist disease, and tomatoes that have been altered to last longer on the shelf.
Consumers started to balk when they had to pay more for these ‘new foods.’ In the United States, “biotechnology” wasn’t an appetizing word. Even though everything from animal feed, soda pop, cooking oil, and almost every single ‘processed’ food we eat from the super market is, made from genetically modified or engineered corn and soybeans, few U.S. consumers know it.
European consumers grew wise sooner and labels were required if the food stuff was genetically altered. Then in 1997, 93% of those surveyed in the U.S. wanted bio-engineered food to be labeled — presumably because many would avoid it. The point though, most of us born in the 1900’s have been eating it, for most of our lives!
Through a series of mergers and acquisitions series, ELM controlled such seed companies as Asgrow (US), Petoseed (US), and Royal Sluis (the Netherlands). Then in 1995, a new name appeared, Seminis. Seminis came about from a merger of these three companies. After the creation of Seminis, the seed and coating technologies of these three divisions were all placed under the INCOTEC name. In July 1998, Seminis then acquired 70% of Hungnong Seed, Korea’s largest seed and vegetable firm, and Choong Ang Seed (AGROW, 1999). Hungnong and Choong Ang are leading companies in the oriental vegetable market. In November 1998, Seminis purchased the vegetable division of Sementes Agroceres, a Brazilian company that produces and distributes vegetable seeds throughout Brazil. In 1998, Seminis acquired the distribution rights to LSL PlantScience tomato varieties.
LSL PlantScience is a world market leader in tomatoes developed for long shelf life. In September 1999, Seminis acquired Barham Seeds, a company dedicated to the research and development of seedless watermelon varieties.
Garza predicted that within a decade, 80% of the fruits and vegetables sold in the U.S. will be genetically modified in one way or another. This would include frozen-vegetable packers, fruit-juice makers and, of course, the most of the food consumed world-wide, by the average shopper. “We will change consumer habits entirely,” said Romo while jabbing a cigar in the air. Investors bought it.
Poor-quality produce being one of the biggest sore points in the supermarket, there is little doubt consumers would pay more for better fruits and vegetables. But what is better? Coca-Cola Co. decided that its new recipe for Coke was an improvement, but the public rejected the idea. In other areas, people rejected bruised, blemished or ugly fruits and vegetables, believing there was something wrong with it. Did you know that is the state of Florida in the USA, they actually have ‘ugly’ fruit inspectors? They may not actually be titled as this, but that is exactly what they do. Ugly or un-beautified fruit is not to be shipped from Florida as it might give them a bad reputation. What’s wrong with so-called ugly fruit? Probably nothing and in fact, as to its nutritious value, it may be superior to the more beautiful fruit that has been genetically modified. Please don’t misunderstand, food that is attractive is appealingto the eye and is part of the pleasure of eating a fine meal, but there are many ways to make food attractive, without messing around with Mother Nature or what is natural.
The nation of Japan seems to be obsessed with freshness which is also equated with appearance. My wife and I had the pleasure to experience much of Japan several years ago. Most Japanese shop every single day, because they want their food FRESH! Fruits were protected in their own little protective baskets to prevent bruising, because they want their food to look good which equates to being FRESH. The food there was expensive, very expensive, but it was FRESH. As an example for comparison, let’s suppose you went to a USA store on the day the produce truck arrived. This would mean your stuff is pretty fresh right? Well, maybe that same truck of produce would have been rejected in Japan two weeks earlier, because it was not fresh enough. In the store, most of us have seen the little white Styrofoam packages of food which have been sealed with some clear plastic wrap right? Well, in Japan we saw this same type of packaging, but underneath the clear wrap, the food was still wiggling because it was alive! Now that’s what I call an obsession for FRESH!
How something tastes is also, equated with what is deemed as FRESH.
“We don’t’ know how to define qualities yet like taste. How can you engineer something you can’t define?” said Harry Klee, a University of Florida molecular biologist and former top tomato scientist at Monsanto.
The now-infamous Flavr-Savr tomato from CalgeneInc. was the first genetically modified food approved by U.S. regulators, the supposedly better-tasting tomato bombed with shoppers.
But Mr. Romo contends that Calgene made a series of errors, beginning withthe choice of an ordinary-tasting tomato to engineer, and ending with excessive spending to get a consistent product into stores. He predicted his products will fare better, and Roger Salquist, Calgene’s last chief executive officer before it was sold, did not doubt it. “Mr. Romo has got a lot of money, charisma and seed,” said Mr. Salquist.
Mr. Garza alliance was not with the public, but with the farmers. If the farmer paid more for his seeds and their profits went up, then he could increase his sales. This is precisely how he quietly and quickly became the Global Seed King.
As much money as we are talking about in the sales of food products, it is still minuscule in comparison to drugs and chemicals derived from genetically modified plant sources!!!
Well have you ever heard the expression, “if you can’t beat em’ join them’? Here is one better. Don’t beat them or join them, buy them!
In St. Louis, MO (Jan. 24, 2005) – MonsantoCompany announced its definitive agreement to acquire Seminis, Inc., for $1.4 billion in cash and assumed debt… “The deal included keeping Romo Garza as Chairman and CEO of Seminis under Monsanto, according to the company’s press release announcing the deal. The ‘deal’ effectively made the St. Louis, MO based chemical company, the largest seed producer in the world!
“Seeds are software and we have the seeds.”
Alphonso Romo Garza – Seminis
“DNA is the most interesting software there is.”
Bill Gates – Microsoft
Well, the one time richest man in the world may know a lot about software and the King of seeds may know a lot about genetic engineering, but this Dirty Little Secret is that seeds are life that grow from the dirt, not the science or the computer laboratory. What else would ‘they’ think of next?
WOW, this stuff is really getting dirty! We are not done. There is much more to come and more ‘Dirty Little Secrets‘ to share next time.