Africa could become a battleground for European, US and Asian multinationals seeking to control the growing of genetically modified cotton in Africa, particularly in Ethiopia, Kenya and Malawi.
The scramble for the GM seed market is expected to intensify next year after two notable multinational mergers: The $66 billion takeover of Monsato by Germany’s Bayer AG, and the $43 billion acquisition of Switzerland’s Syngenta AG by China National Chemical Corporation (ChemChina).
Experts say the deals will open Monsanto to stiffer competition from ChemChina which could support supply of cheaper generic GM cotton seed by other bio-tech companies — besides Monsato — to African farmers.
The African Centre for Biodiversity (ACB), a Johannesburg-based lobby group, said the fight for control of GM agriculture in Africa could play out between Bayer AG and ChemChina, with Indian companies also coming into play in the future.
GM cotton seeds such as Bacillus thuringiensis (Bt) increases yields through in built resistance to pests like bollworms which lowers production costs by reducing use of insecticides. However, Bt cotton seeds are more expensive compared with conventional seeds.
Monsanto dominates the global market as the sole owner of Bollgard technology cotton approved for commercial growing in US, China, South Africa, Argentina, India, Brazil, Costa Rica, Burkina Faso, Sudan, Pakistan and Myanmar.
Chinese and Indian technology firms have been producing cheaper generic versions after Bollgard I patent expired in 2011. During the life of the patent, Monsanto sold seeds and got fees for use of the technology from rival biotech firms.
One of the intentions by ChemChina for buying Syngenta is the promotion of large-scale planting of GM crops. Syngenta has a significant presence in Cameroon and Cote d’Ivoire.
South Africa grows Monsanto’s Bollgard II cotton while Kenya and Malawi are carrying trials of the variety. Swaziland is using Indian GM varieties and Sudan is using the Chinese variety.
“Ethiopia prefers seed from India and Sudan, rather than Monsanto’s Bt cotton because the company did not want to undertake laboratory or field tests,” said ACB in a statement.
Bayer’s GM cotton seeds were sold in South Africa in 2013. The company has commenced genetically modified cotton trials in Cameroon with commercialisation of seed expected in 2018.
Monsanto dominates GM cotton seed sales, while Bayer operates representative offices in Ghana, Zambia and Angola with key markets for crop protection products in South Africa, Kenya, Cote d’Ivoire, Morocco and Algeria.
“The merged company will enjoy Monsanto’s existing presence in African countries and ability to perhaps provide further complementary products, without the risks posed to Bayer in entering these markets,” said ACB.
The lobby said the ChemChina-Syngenta merger will grow Syngenta’s market share as China is deeply involved in Africa’s agriculture in terms of financial aid, 25 agricultural demonstration centres and state-funded cotton firms.
Subsidiaries of China-Africa Cotton Development Ltd in Malawi, Zambia, Mozambique and Zimbabwe own seven ginneries, two cotton seed oil extracting mills and seed plant contract thousands of smallholder growers.
It is the largest cotton firm in Malawi and one of three largest in Zambia.
China has funded demonstration centres in Rwanda, Tanzania, Uganda, Sudan, Ethiopia, Zambia, Mozambique, South Africa, Democratic Republic of Congo, Zimbabwe, Benin, Cameroon, Liberia, Togo and Guinea-Bissau.
ACB said the African Growth and Opportunity Act (Agoa) was an incentive to revitalise the cotton sector.
East and Southern African countries are turning to GM cotton to increase yields to address the decline of organic crop production.
Africa’s push for GM cotton comes against subsidies to cotton farmers in the US, China and European Union.