Economic Analysis of Roundup-Ready Soybeans

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Economic Analysis of Roundup-Ready Soybeans

In 1974, Monsanto Corporation registered the chemical glyphosate for agricultural use in the United States. Monsanto marketed glyphosate, otherwise known as Roundup, as a broad-spectrum herbicide designed to kill “a wide variety of annual and perennial grasses, sedges, broad-leaf weeds, and woody shrubs” (Mendelson, 1998). Glyphosate kills such a huge assortment of plants and weeds by inhibiting the creation of EPSP synthase, an enzyme in plants that is required to synthesize the amino acid phenylalanine (Kliener, 1998). Deprived of phenylalanine, plants cannot make the proteins necessary for life, so these plants weaken and die.

Since glyphosate kills nearly anything green, farmers have been forced to use Roundup as either a pre-emergence herbicide or a weed killer around the borders of their planting area to avoid killing their commercial crop (Sij and Stansel, 1997). Despite farmers’ inability to spray glyphosate directly on conventional crops, Roundup became “the best-selling weed-killer in the world” (Arax and Brokaw, 1997). In 1994, Roundup had net sales of approximately 1.2 billion dollars, comprising 17 percent of Monsanto’s total annual sales.

However, by the mid-90’s, Monsanto neared the expiration date on its patent of Roundup, and faced the possibility of losing the production rights of this cash cow. Desperately needing a new way to continue to reap profits from glyphosate, in 1996, Monsanto, through genetic engineering, introduced genetically modified Roundup-Ready crops, varieties of several commercial crops which are resistant to glyphosate. By inserting a gene derived from a petunia that produced large amounts of EPSP synthase into the genome of several popular commercial crops, Monsanto created varieties of soybeans, cotton, canola, and corn which could produce enough EPSP synthase to overwhelm the EPSP inhibition caused by glyphosate (Kliener, 1998). Therefore, farmers can plant the glyphosate-resistant crops and spray Roundup directly on their fields, thus destroying every weed and plant except their Roundup-Ready crop. Since glyphosate-resistant crops offer the promise of a cheaper and simpler weed management process, farmers have adopted glyphosate-resistant crops at such an alarming rate that Roundup-Ready crops cover over 33 million acres worldwide (Mendelson, 1998).

The advent of genetically engineered glyphosate-resistant crops has not only maintained but has greatly expanded Monsanto’s market share in the realm of agribusiness. Since Roundup-Ready seeds are only resistant to the broad-spectrum herbicide Roundup, Monsanto sells a season’s worth of weed killer along with every Roundup Ready seed sale (Arax and Brokaw, 1997).

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