Seed saving forces Monsanto to sell wheat operations

Grain SA has welcomed agricultural business (Ltd’s acquisition of Monsanto’s local wheat research operations.
Issue date : 18 July 2008

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Grain SA has welcomed agricultural business (Ltd’s acquisition of Monsanto’s local wheat research operations. will continue to breed, produce and commercialise varieties of wheat in all segments of the South African wheat market.

“The transaction means that we will retain research expertise in the country and that there is still a company willing to invest in wheat research,” said Kobus Laubscher, Grain SA’s general manager. The transaction followed Monsanto’s decision to withdraw its wheat research due to reduced earnings because farmers were holding seed back instead of buying new seed.

I t’s estimated that in the Western Cape, which is considered its largest market, seed sales dropped from more than 280 000 bags of 50kg each in 2001 to less than 200 000 in 2006. Valuable research n addition to the wheat research farms located in Napier and Bethlehem, the transaction includes all intellectual property held in Monsanto Agriculture (Pty) Ltd, the Sensako trademark and a set of 2 000 molecular markers, most of which are not in the public domain. Under its new management, Agriculture (Ltd has decided to change its name and operate as Sensako (Pty) Ltd, because Monsanto Agriculture (Ltd was formerly known as before it was purchased by in 2000.

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The breeding programmes currently employ 50% of the senior wheat breeders in the country, who have produced 75% of the most recent provisional or final wheat cultivar releases. These breeders also account for around 85% of all wheat grown in Africa. The breeding strategy, known as modified pedigree selection, incorporates key breeding technologies which, coupled with the use of molecular marker selection and high throughput quality analytics, maximises efficiency and productivity.

Dr Francois Koekemoer, the research and development head of the new management team, foresees that Sensako will have fewer problems than Monsanto did with farmers holding seed back. “Farmers have really struggled during the past few years due to unfavourable market and climatic conditions,” he explained. ”This has resulted in more farmers holding seed back. The market has, however, picked up since then and there has already been an increase in the amount of new seed bought.” He added that he felt was in a good position to manage the situation. – Glenneis Erasmus

Stiff penalties for Astral’s chicken monopoly

The Competition Commission has referred poultry producer Country Bird’s complaints of anticompetitive conduct against Operations Limited and its chicken breeding enterprise, Elite Breeding Farms, to the Competition Tribunal for further investigation. The commission has also asked the tribunal to levy an administrative penalty of 10% of both Astral’s and Elite’s annual turnover for the 2006/07 financial year. Astral’s turnover for the year up to September 2007 was R6,3 billion, which could mean a fine in excess of R600 million.

The commission has announced there’s ample evidence that the two companies contravened the Competition Act by dividing markets and determining conditions of commerce. Elite Breeding Farms is a joint venture firm between Astral and Country Bird, based in KwaZulu-Natal. owns 82% of the company and also controls another three companies involved in the breeding of chickens, namely Ross Poultry, National Chicks and Meadow Feeds. Country Bird and Astral had an agreement that put Country Bird under the obligation to buy 90% of its breeding stock from Elite.

Country Bird decided not to continue with the agreement and started its own breeding company, Abcor Acre, in 2006. Country Bird and Supreme Poultry consequently brought a complaint to the commission claiming that Astral had contravened the Competition Act by impeding them from expanding. The commission found that Astral is dominant in the poultry breeding market and that it had abused its power by engaging in exclusionary conduct. This was with the intention of protecting Astral’s dominance in the upstream breeding market, while entrenching its position in the downstream market by inhibiting effective competition. – Annelie Coleman

Zim banks strapped for cash

The Governor of the Reserve Bank of Zimbabwe has limited daily bank withdrawals per person to Z$100 billion. At the time of going to print, this amount could buy three single blood pressure tablets, or a copy of a local weekly newspaper and two small green onions, but Zimbabwe’s inflation continues to rise. n many towns, even if you had the money there is almost no food left to buy. Hundreds upon hundreds of people have been queuing outside banks across the country desperately trying to withdraw their money, as most shops no longer accept cheques. – Sharon Götte

Kenyan food now more expensive

Prices of food in Kenya, which have already risen by 50% since the start of 2008, could increase further following a new government regulation. From October, all food sold in Kenya will have to bear a mark of approval from the country’s bureau of standards (Kebs), which will charge a fee for this service. “Manufacturers and producers with a turnover of below KSh200 000 (R24 722) each year will pay KSh5 000 (R617).

Those with a turnover of up to KSh500 000 (R61 802) will pay KSh10 000 (R1 234),” explained John Abongs, the general manager of quality assurance at Kebs. “Producers will be forced to pay higher prices in order to bring their products to the market,” commented Su Kahumbu, the coordinator of Consumer Watch Kenya. “The regulation does not take into account the impact on producers, particularly small-scale producers, or the consumers who are the end users of the products.” She added that the fees were too high for small-scale producers. – Irin News

Annelie Coleman represents Farmer’s Weekly in the Free State, North West and Northern Cape. Agriculture is in her blood. She grew up on a maize farm in the Wesselsbron district where her brother is still continuing with the family business. Annelie is passionate about the area she works in and calls it ‘God’s own country’. She’s particularly interested in beef cattle farming, especially with the indigenous African breeds. She’s an avid reader and owns a comprehensive collection of Africana covering hunting in colonial Africa, missionary history of same period, as well as Rhodesian literature.