Enviros Stop Monsanto Deal With Respected "Peasant's Bank"

by Donella H. Meadows

Here's an excerpted account put out by the Rural Advancement Foundation International (RAFI) of Canada, one of many development organizations that reacted to the news with outrage.

The Grameen Bank's June 25th announcement that it will accept $150,000 from Monsanto Corporation to launch the Grameen Monsanto Center for Environment-Friendly Technologies is stirring a storm of controversy. The surprise move was unveiled jointly by Muhammad Yunus, Managing Director of the Grameen Bank and Robert Shapiro, Monsanto's CEO. The company's initial grant is for soft loans to Bangladeshi farmers to buy agricultural technologies including Monsanto's herbicides and hybrid rice, maize, and cotton seeds.... Monsanto ... has spent $8.1 billion in the past two years buying biotechnology companies. Its most recent acquisitions [make it] the world leader in cotton seed sales -- an important Bangladesh export crop -- and number two in maize seed.

While Monsanto has stated that it will not provide transgenic crop seed because Bangladesh does not have a regulatory framework for genetically-modified organisms, the Grameen/Monsanto announcement is expected to put pressure on the government to adopt biosafety rules amenable to Monsanto's extensive line of herbicide-tolerant crops. Yunus and Shapiro have said, however, that the joint venture will begin by selling hybrid seeds to poor farmers. Hybrid rice and maize are incapable of breeding 'true' in the second generation. The seeds are either sterile or they produce unwelcome genetic 'throwbacks.' Although some scientists regard hybrids as a boon to crop yields, there is a growing opinion that the real advantage is that farmers are forced every year to buy new seeds.

Traditionally, Bangladeshi farmers not only save seed for replanting, but women breed diverse seed types suited to their immediate ecosystems and economies. Hybrid seeds could more than quadruple seed costs as well as end the process of farmers adapting plants to their resource-poor soils."

Muhammad Yunus started the Grameen Bank in 1983 by offering loans of usually less than $100 to villagers, mainly women, who would never qualify for commercial credit. The bank gives peasants an alternative to the exorbitant interest rates of local money-lenders and encourages the purchase of chickens, or a cow, or a rice-husking machine or materials for weaving mats. The resulting small businesses often double or triple the income of their owners. The loan repayment rate has been an astonishing 98% -- higher than that of most commercial banks.

RAFI goes on to say, "The Bank's success has turned Muhammad Yunus into a kind of bankers' Mother Theresa. A World Bank-sponsored conference on micro-credit in Washington last year accorded Yunus rock-star status, and corporate gurus from George Soros to Ted Turner have flocked to his side." Another who joined the flock, apparently, was Shapiro, who manages to blend a noble vision of his company feeding the world with a calculated vision of farmers dependent on Monsanto products.

Hope Shand of RAFI-USA says that by allying with Grameen, Monsanto "bought a cheap distribution and finance system that not only reaches into half the villages of Bangladesh but also guarantees that the poor will repay their loans." Since the announcement of the Monsanto deal, Mohammad Yunus has been bombarded by criticism. Here is one example, an email message sent to him on July 4 by Vandana Shiva, an outspoken critic of bioengineered seed:

"When a few decades ago, you gave a few hundred Takkas from your pocket to rural women in Bangladesh who were in the grip of a famine, you started a movement that used micro-credit to enable them to use their skills, their knowledge, their resources to build local markets for their products.

"When you announced your Joint Venture with Monsanto, you took a step to betray the interests of the women you have served so far. The ... scheme ... will create markets for Monsanto's products, not products based on the creativity of Bangladesh peasants.

"Contrary to your announcement, Monsanto's technologies are not environment friendly or sustainable. They pose a threat to ecosystems and agriculture. They will push Bangladeshi peasants into debt as they have to spend more money on herbicides, seeds, royalties and technology fees.

"You have made a name for yourself in the annals of history through your innovation and commitment to the poor.... I am sure you will not want your efforts to be hijacked as a marketing strategy by Monsanto. The $150,000 that Monsanto is giving to start the Grameen Monsanto Centre is a miserable 0.6 per cent of the $1.6 billion that it is spending in an advertisement campaign against the consumers in Europe who have rejected Monsanto's genetically engineered foods. I am sure you do not want to go down in history as the man who took the side of a corporation against citizens worldwide."

On July 27, 1998, the BBC announced, "A bank which pioneered the philosophy of small credit for the poor in Bangladesh has announced that it is pulling out of a controversial joint venture with the world's largest agrochemical company, Monsanto. The managing director of the Grameen Bank, Mohammed Yunus, said he was abandoning the project because of opposition from environmental groups."

I would have preferred him to take his own responsibility for that decision, but it was the right decision.

[Editor's note: A related story on IPS revealed that special financing for farmers boosted the use of hybrid corn to around 70 percent in Thailand, according to industry analysts. By comparison, rates were about 25 percent in the Philippines and 20 percent in Indonesia, where such schemes were few or lacking. ]