Learning from the “Terminator’ Debacle

Gerald Graham

Worldocean Consulting Ltd, Victoria, British Columbia, Canada

Email: worldoceanconsulting@live.com
Abstract: Monsanto‟s 1999 decision not to acquire „sterile seed technology‟,
otherwise known as the “Terminator”, was in response to widespread pressure.
The technology‟s commercial potential was „uncertain‟, and the company‟s image
and share price were taking a beating. Potential international suitors risked being
scared off.

Few people anywhere could find any redeeming features in it. Above all,
Monsanto appears to have reversed its plans in response to a stinging rebuke from
the head of the Rockefeller Foundation. Monsanto was warned of the possible
negative social and economic consequences of introducing terminator technology
in the third world. But, the foundation also wanted the way cleared for its own
agricultural biotechnology agenda; the Terminator controversy risked
jeapordising its own ambitious GM rice program. Since dropping the technology,
Monsanto has donated the rice genome to the world, while the USDA, which
funded terminator technology R&D, has established a panel which will study its
potential.

Keywords: agricultural biotechnology; sterile seed technology; terminator

technology; Monsanto; Rockefeller Foundation; GM rice.

Biographical notes: Gerald Graham is President of Gerald Graham Consulting

Ltd, a Canadian management consulting firm specialising in science and
technology policy issues worldwide. He received his B. A. in Economics from the
University of Montreal ( Loyola College ) in 1970, his M. A. in International
Affairs from Carleton University in 1974, and his Ph. D. in International Affairs
from the Graduate Institute of International Studies at the University of Geneva in
1980. Professionally, he has served as a Consultant to the World Bank, European
Union, OECD, FAO and UNESCO, plus a total of eight Canadian government
departments. He has also taught at American and Canadian universities.
 1

1 Introduction

On October 4, 1999, Monsanto, the American agri-food, pharmaceuticals and chemicals

company, publicly announced that it would not “…commercialize sterile seed
technologies” 1, the so-called „Terminator‟2 technology. The announcement took the
form of an open letter from Robert (Bob) Shapiro, the president of the company, to
Gordon Conway, president of the Rockefeller Foundation. Shapiro‟s letter was a delayed
response to an address Conrad made to Monsanto‟s board four months earlier3.

Monsanto‟s dramatic reversal over terminator technology was front-page news,

especially in North America and Europe. Environmentalists celebrated the event, viewing
it as a vindication of their claims that terminator technology was a menace to farmers
around the world, but particularly in the third world.

Now that the dust has settled from the October announcement, the time is ripe to get
behind the headlines, to analyse the public record with a view to better understanding the
motives for the decision, and the lessons we can all learn from it. For instance, what was
it in Gordon Conway‟s stirring sixteen-page address to the board that evidently piqued
Monsanto‟s attention? Did Monsanto act out of an awakening of its corporate
environmental conscience, or was it instead out of concern for „the bottom line‟? And
what motivated Gordon Conway to address the Board in the first place? Was it just the
terminator issue, or did the Rockefeller Foundation have its own biotechnology agenda?
Aren‟t the Rockefeller Foundation and the environmental lobbyists unlikely allies on the
agricultural biotechnology issue? Finally, what are the implications for agricultural
biotechnology as a whole, and its potential role in alleviating world hunger and achieving
sustainable agriculture? These and other issues are explored in this paper.
 2

2 Monsanto’s Decision to “Terminate the Terminator’

Monsanto‟s decision to walk away from terminator technology seemed to catch almost
everyone by surprise. The company, however, had been under considerable pressure for
eighteen months to drop the controversial, experimental technology, which “…involves
the insertion of various gene switching mechanisms that ensure that any saved seed after
harvest will not germinate”4. Monsanto did not actually own the patent on the new
technology; that was held jointly by the U.S. Department of Agriculture ( hereafter
USDA ) and Delta & Pine Land, a company which Monsanto had intended to acquire5.
Nor was Monsanto the first of the seed giants to walk away from terminator technology.
One of its large European competitors, AstraZeneca, notified the secretariat of the
Convention on Biological Diversity in June, 1999, that it wouldn‟t commercialize this
kind of technology6.

As mentioned in the introduction, the Monsanto announcement was greeted positively in

many quarters. Friends of the Earth claimed that Monsanto had been forced to “respond
to enormous worldwide opposition to its plans”.7 For its part, the UK charity Christian
Aid said that the decision represented “a major U-turn that will send shock waves across
the industry”8. In stark contrast to the reaction from the environmental groups and third
world development community, however, a spokesperson for the European Association
of BioIndustries is reported to have dismissed criticism of genetically-modified crops as
“scandalous propaganda”, adding that “…many non-genetically-modified (GM) crops did
not produce viable seeds either”9; such is the polarised nature of the biotechnology
debate.

In his October 4 response to Conway, Monsanto president Bob Shapiro admitted that his
company‟s decision not to commercialise the terminator was “…based on input from you
(i.e. Conway) and a wide range of stakeholders…”10. Shapiro‟s letter went on to say that
while the company was still awaiting the results of a “thorough, independent review” of
the technology, they were responding to concerns expressed to them from various
 3

sources. Shapiro also pointed out in his letter that: the sterile seed technology was still
“speculative”; commercialisation was “at least five years away”; and that it “…may or
may not prove workable in a commercial setting”. He did, however, leave open the
possibility that gene protection technology would be used for purposes other than
rendering seeds sterile, e.g. to inactivate specific genetically-added traits11.

The big question is, „Why would such a large, multinational company, known around the
world for its aggressive, hard-nosed approach to biotechnology for agriculture, suddenly
„through in the towel‟? Could it be that Shapiro, who The Economist recently stated had
“…gone out of his way to preach corporate responsibility and sustainable
development”12, was merely exercising the „cautionary principle‟? Or was Shapiro‟s
volte face a straight business decision?

To attempt to answer these questions, let us first go back to Gordon Conway‟s June 1999
address to the board of trustees. First, Conway rather bluntly stated that he thought
Monsanto was rushing terminator technology to market13. He also alluded to another
aspect of the business side: “In developing countries most subsistence farmers save seed
year after year, so the market for commercial seed is limited”14.

Conway‟s address also dealt with the big concern that terminator technology would
contribute to making millions of poor farmers in developing countries “…dependent on a
dozen or so multi-nationals for their future livelihoods”15. In this, he was not alone: on
September 17, i.e. two months after Conway‟s address, and less than one month before
Shapiro‟s „conversion‟, it was announced that an international coalition of lobby groups
was launching a class action lawsuit against a clutch of life sciences companies,
Monsanto included16. The allegation is said to be that

“…these big companies are exploiting bio-engineering techniques to dominate

world agriculture. The fear is that within a decade, world food processes will be
controlled by maybe ten large privately owned American and European
companies. The scope for abuse would be enormous, they say ”17
 4

Monsanto was clearly taking a beating. Shapiro, for example, indicates that the
termination decision was partially based on input from “our very important grower
constituency”. Apparently, terminator technology was alienating existing clients,
consisting of relatively rich farmers in the first world, who also reuse seeds in large
numbers18. Although its lofty motto is “Food, Health, Hope”, the company must rank
alongside Philip Morris, the tobacco giant, as one of the world‟s least-appreciated
companies. But, the terminator was not the only one of its worries; there was also the
controversial rBst bovine growth hormone, and Roundup-ready corn. In short, the firm‟s
deep involvement in biotechnology was costing it dearly. The value of its shares on the
New York Stock Exchange, for instance, plummeted by almost one third between May
and October, 1999. Something had to be done to staunch the flow.

In the midst of all this turmoil, Monsanto was searching for an international suitor. An
earlier proposed merger with American Home Products had fallen through in what The
Economist calls “a fiasco”19, so it is reasonable to conclude that between Conway‟s June
address to the board and Shapiro‟s October announcement, Monsanto was searching for
ways to make itself more attractive to a potential buyer. Suffice it to say that proposing to
acquire a company associated with the much-maligned terminator technology would not
be something that would normally entice a serious bidder.

Monsanto had argued, as others in support of biotechnology patents had before them, that
copyright protection is necessary to promote R&D and the process of innovation; without
it, so the argument goes, companies do not have any incentive to invest large sums of
money into genetic engineering. In his address to the Monsanto Board, Rockefeller‟s
Gordon Conway dealt with this matter in the following way:

“The possible consequences, if farmers who are unaware of the characteristics of

terminator seed purchase it and attempt to reuse it, are certainly negative and may
outweigh any social benefits of protecting innovation” 20
 5

Conway doesn‟t say what these “possible consequences” are or may be, but rioting
cannot be ruled out. There had already been demonstrations in India against Monsanto
and terminator technology as early as 199821. In any case, Conway reminded Monsanto,
if ever they needed reminding, that there was “…widespread negative reaction to
encouraging poor farmers to use such technology”22 Conway also rejected any inference
that anti-terminator sentiment was just another campaign of the anti-trade and anti-
corporate lobby; these concerns, he said, “…are in fact shared by most of the
governments of the developing world”23

3 The Seeds of Its Own Destruction

Why all the fuss over terminator technology? Is it really as bad as all that? Richard
Lewis, an American lawyer said to have been planning to take legal action against
Monsanto, points to the fact that: “…many farmers are already prohibited by their
contracts with the firm from re-planting the GM seeds that they harvest”24 Presumably,
then, by introducing terminator technology Monsanto would no longer have to monitor
compliance and take farmers to court if they suspected breach of contract. Farmers seem
to find the current practice very distasteful, so no doubt some of them would welcome
terminator technology as an improvement. Shareholders, too, should welcome the
innovation, and the attendant cost savings, since in effect terminator seeds “…carry their
own copyright protection” 25.

Paul Moyes, a spokesperson for the European Association for BioIndustries, is reported
to have said:

“Plant breeders and farmers have preferred hybrid seeds for more than 30 years
because they were more productive. This means they have to buy their seeds
every year because hybrid seeds can only be used once”26

What, then, is the difference between these seeds and „terminator‟ seeds, which the
American co-holder of the patent apparently refers to as “ a technology protection
 6

system”27? The main difference would seem to be that hybrid seeds have accidental
obsolescence, whereas terminator seeds have “planned obsolescence”28. At the end of the
day, one is hard pressed to find any redeeming social features in terminator technology.
In the words of Richard Lewontin, the Harvard zoologist, terminator technology is
“…useless to farmers and consumers”29.

4 Making Agricultural Biotechnology Work for the Poor and Excluded

The Rockefeller Foundation and Monsanto share a commitment to agricultural

biotechnology. But whereas Monsanto is constantly in the public spotlight, the
Foundation does not attract nearly the same degree of attention. Thus, it is probably not
generally well-known that in the course of the past fifteen years “…the Foundation has
funded over $100 million of plant biotechnology research and trained over four hundred
scientists from Asia, Africa and Latin America”30. What sets the Foundation apart from
Monsanto and the private sector is that the Foundation basically donates the technology it
develops to the world31, whereas Monsanto is obviously in business to make money.

In his June address to the Monsanto board, the Rockefeller Foundation president
expressed the fear that the utilisation of the Foundation‟s biotechnology research results
by the poor and excluded, was “…being threatened by the mounting controversies in
Europe and to some extent in the U.S.”32 He went on to say that “(T)here is a real danger
that the research may be set back, particularly if field trials are banned”33. Elsewhere in
his address, he made his big pitch, which was directed not just to Monsanto but to the
whole sector: “The agricultural seed industry must disavow use of the terminator
technology to produce seed sterility"34 Finally, he called for unspecified “(c)oncessions
on the part of Monsanto”35.

The inference from Conway‟s statement was that terminator technology had to be
sacrificed if agricultural biotechnology is to move forward and make a contribution to
solving the problem of feeding the masses. Evidence to support this interpretation comes
 7

from a remark of Conway‟s in October, 1999, shortly after Monsanto‟s terminator retreat.
He is reported to have said:

“We welcome this move as a step toward ensuring that the fruits of plant
biotechnology are made available to poor farmers in the developing world”36

In terms of the „concessions‟ Conway called for in the summer of 1999, it can hardly be
considered coincidental that nine months later, Monsanto announced that it had
completed a working draft of the rice genome, which it promised to donate to the
international community37.

Meanwhile, to paraphrase Mark Twain, reports of terminator technology‟s death are

„greatly exaggerated‟. For one thing, the USDA and Delta & Pine Land still jointly hold
the patent on the technology. Furthermore, USDA Secretary Dan Glickman has appointed
a 38-member panel to examine his department‟s role in “…developing and regulating
biotech crops” 38. Over a two-year period, the panel will look at, among other things,
“…how to preserve the intellectual property rights of seed developers while protecting
the interests of farmers”39.

5 Conclusions

If there is one overriding message from the terminator debacle, it is that you cannot put
profits ahead of people. Successful innovation starts by examining the needs of people,
not the needs of the corporation. In order for a technology to be patented it must
demonstrate some form of „utility‟; but this in itself is no guarantee that it will gain
favour in the marketplace. If a technology doesn‟t meet some sort of societal or human
need, then sooner or later it will fail.

If Monsanto really believed in the terminator technology it planned to acquire, it could

have tested demand for it by giving terminator seeds to farmers to use for a few growing
seasons. If , during that time, farmers kept coming back for more, this would have been
 8

an indication that they liked it, and that they might be prepared to pay something for it in
the future. But Monsanto never got to that stage. Perhaps Monsanto had done some in-
house marketing studies which concluded that this was a product with such limited
potential that you couldn‟t even give it away. More likely than not, however, company
officials finally got the message that if you are going to tell everybody how you and your
agricultural biotechnology are going to solve the problem of world hunger40, acquiring
terminator technology is not exactly the best way to prove your commitment.

So, the Rockefeller Foundation eventually got its wish: Monsanto committed itself, more
or less, never to commercialise terminator technology. Moreover, Monsanto‟s donation
of the decoded rice genome to the world can be seen as the next step in its process of
rehabilitation. However, Rockefeller‟s Conway had also invited Monsanto and the rest of
the industry to change the way they conduct their affairs, to engage in “A New Way of
Talking and Reaching Decisions”, and “a global public dialogue”41. Hopefully, this
inclusive, participatory process will be the next phase in the evolution of agricultural
biotechnology, which is currently experiencing growing pains. The dialogue should draw
in everyone, from seed companies to environmental groups and traditional and small-
scale farmers from the developing world.

Conway wound up his remarks with the following statement:

“The public feels excluded from this discussion and from this process. The nature
of debate is that views which have been ignored or even suppressed will be
expressed forcefully”42.

Massive protests at the Fall 1999 WTO conference in Seattle, where biotechnology and
biosafety were among the many divisive issues on the trade agenda, have already borne
him out. Until such time as people, and not just corporations and governments, have a say
in setting the agenda and laying down ground rules, expect more of the same.
 9

References and notes

1
Open Letter from Monsanto CEO Robert B. Shapiro to Rockefeller Foundation President, Oct. 4, 1999.
http://www.monsanto.com/monsanto/gurt/default.htm . Hereafter referred to as Oct. 4, 1999 Shapiro Letter
to Conway.
2
The term “Terminator” is actually unofficial. The moniker is believed to have been first used in this
connection by RAFI, Rural Advancement Fund International, a Canadian-based pressure group which
spearheaded the fight against the technology. The word „Terminator‟ gained such coinage that even Shapiro
alludes to it in his October 4 letter, ibid., p. 1.
3
Gordon Conway, “The Rockefeller Foundation and Plant Biotechnology”, Rockefeller Foundation, June
24, 1999,. http://www.biotech-info.net/gordon_conway.html . Hereafter referred to as “Conway Address to
Monsanto Board.
4
Jules Pretty, “Genetic-Modification of Crops: Partner or Pariah for Sustainable Development?”, The
Biochemist ( The Biochemical Society ), October 1999, pages 19-25, at p. 21. For a brief explanation as to
how the technology works, see “Biobit—Terminator Technology”, The Gene Exchange, Union of
Concerned Scientists, Fall/Winter 1998. http://www.ucsusa.org/Gene/w98.biobit.html
5
Ibid., p.1..
6
“Terminator Terminated?”, RAFI News, 10/4/99. http://www.rafi.org
7
“Terminator gene halt a „major U-turn‟”, BBC News, Oct. 5, 1999, p. 1.
http://news2.thls.bbc.co.uk/hi/english/sci/tech/newsid%5F465000/465222.stm
8
Ibid.
9
Ibid., p. 1.
10
Oct. 4, 1999 Shapiro Letter to Conway, op. cit., p. 1.
11
Ibid.
12
“Grim reaper”, The Economist, Dec. 23, 1999, p. 33.
13
Conway address to Monsanto Board, p. 6.
14
Ibid., p. 11. Jules Pretty echoes this point, saying that “…most farmers in developing countries…save
their seed”14. Pretty, “Genetic-Modification of Crops: Partner or Pariah for Sustainable Development?”,
op.cit., p. 21.
15
Conway address to Monsanto Board, p. 10.
16
“GM giants face court challenge”, BBC News, Friday, Sept. 17, 1999, p. 1.
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_449000/449920.stm
17
Ibid.
18
Pretty, ibid., claims that “20-30% of US soya farmers reuse seed, and large numbers of wheat farmers
only return to market once every 4-5 years”.
19
“Grim reaper, op. cit.
 10

20
Conway address to Monsanto Board, p. 13.
21
Habib Beary, “Farmers welcome halt to „terminator‟, BBC News, Oct. 5, 1999,
http://news2.thls.bbc.co.uk/hi/english/world/south%5Fasia/newsid%5F465000/465969.stm
22
Conway address to Monsanto Board, p.13.
23
Ibid., p. 10
24
“Terminator gene halt a „major U-turn‟‟‟, op. cit., p.1
25
Professor Carlos Correa, University of Buenos Aires, quoted in “GM giants face court challenge”, BBC
News, Friday, Sept. 17, 1999.
http://news.bbc.co.uk/hi/english/business/the_economy/newsid_449000/449920.stm
26
Ibid., p.3.
27
“Biobit—Terminator Technology”, The Gene Exchange, Union of Concerned Scientists, Fall/Winter
1998. http://www.ucsusa.org/Gene/w98.biobit.html, p. 1.
28
Manjula V. Guru, “Impacts of biotechnology on the farming communities”. Center for International
Development, Harvard University, Cambridge, MA, USA., p. 2.
http://www.cid.harvard.edu/cidbiotech/comments/comments2.htm
29
Summary, International Conference on Biotechnology in the Global Economy, Sustainable
Developments, Vol. 30, No. 01, Sept. 6, 1999, pp. 1-18, at p.5. http://www.iisd.ca/sd/har/sdvol30no1e.html
30
Press Release, Foundation News, Rockefeller Foundation, St. Louis, Missouri, August 3, 1999, p. 3.
http://208.240.92.21/news/072699_rice.BAK . Going further back, the Foundation was of course a driving
force behind the Green Revolution; it helped develop high yield varieties of wheat, maize and rice. Norman
Borlaug, one of its scientists, received the Nobel Peace Prize in 1970.
31
On August 3, 1999 the Foundation announced the invention of a transgenic rice, rich in iron and beta-
carotene, which it hopes will dramatically reduce malnutrition and disease amongst the poor. The research
was jointly funded by the Foundation and the European Commission‟s FAIR program. As if to underline
the Foundation‟s disapproval of terminator technology, the press release announcing the discovery stated
the following:
“Once in the possession of the farmer and plant breeder, the novel varieties become their
unrestricted property. The farmers may, if they choose, use a portion of their harvests for further
sowing”.
Ibid.
32
Conway address to Monsanto Board, p. 3.
33
Ibid.
34
Ibid., pp. 12, 13.
35
Ibid., p. 16.
36
Quoted in “Terminator gene halt a „major U-turn‟‟‟, op. cit., p.1. Ironically, just over a month after
Monsanto‟s terminator announcement, it was reported that the Foundation was “…closing its books on an
ambitious $100 million effort to develop and disseminate new molecular tools to improve rice…”
Henceforth, it apparently intends to concentrate on “…problems facing subsistence farmers, with an
 11

emphasis on traits rather than specific crops and a focus on sub-Saharan Africa”. Dennis Normile,
Rockefeller to End Network after 15 Years of Success” ( Abstract ), Science, Vol. 286, Number 5444, Issue
of 19 Nov., 1999, pp. 1468-1469.
37
“Rice code boosts GM prospects”, BBC News, Wednesday, April 5, 2000.
http://news.bbc.co.uk/hi/english/sci/tech/newsid_701000/70i874.stm. The article regarded this
announcement as “…a bid to improve the agro-chemical giant‟s image following bad publicity over its
sterile seed technologies carrying the „terminator‟ gene”.
38
Philip Brasher, “Glickman Seeks Biotech Seeds Probe”, Yahoo News, Thursday, March 30, 2000.
http://dailynews.yahoo.com/h/ap/20000330/hl/biotech_crops_2.html . The article goes on to state: “USDA
researchers say the terminator process is misunderstood and has applications that could benefit farmers
around the world. The same technique that renders seeds sterile by turning certain genetic traits on and off
could also be used to make plants resistant to drought or pests"
39
Ibid.
40
See, for example, one of Monsanto‟s Agricultural Sector webpages, entitled “Biotechnology: Promise for
a Brighter Future”. http://www.monsanto.com .
41
The author of the present article has made a similar proposal. See Gerald Graham, “A global
conversation on biotechnology”, Center for International Development, Harvard University, Cambridge,
MA, USA. http://www.cid.harvard.edu/cidbiotech/comments/comments32.htm .
42
Conway address to Monsanto Board, p. 15.