Putin Calls Monsanto a Terrorist Organization

Is Putin Right to Call Monsanto a Terrorist Organization and Ban GMOs?

May 25, 2014

The Motley Fool - Russia has high hopes for organic farming -- maybe a little too high. 

Sometime before wrestling bears and after hunting tigers, Russian President Vladimir Putin found a few minutes to denounce the use of genetically modified crops (again).  

While Russia was widely believed to allow the use of biotech crops shortly after joining the World Trade Organization, the country believes it has found a way to remain GMO-free without violating its obligations as a member nation.

A new bill introduced to the Russian parliament would treat producers of biotech crops from companies such as Monsanto (NYSE: MON ), The Dow Chemical Company (NYSE: DOW ), and Syngenta (NYSE: SYT ) as criminals -- with fines comparable to terrorism.

As co-author of the bill Kirill Cherkasov told RT:

When a terrorist act is committed, only several people are usually hurt. But GMOs may hurt dozens and hundreds. The consequences are much worse. And punishment should be proportionate to the crime.

If the proposed bill becomes law, punishment could range from 15 years to life. That seems a bit harsh to me and, when coupled with numerous anti-science quotes and ideologies from the bill and its supporters, I just don't see how a policy could be sustainable scientifically or economically (what Russia really cares about) speaking. Additionally, most crops grown in Russia today (wheat, barley, sunflower, oats, potatoes) don't have GM varieties. That's good news for Monsanto and Syngenta shareholders, but Russia claims that it can grow enough organic food to never need biotech crops. Are those bold claims actually true?

Can Russia farm without engineered crops?

Russia is free to ban biotech crops, but it should do so with more accurately worded proposals. I'd start by scrapping the proposed bill or amending it to a point where it is generally unrecognizable from its initial submission. Then, Russia should insert language that speaks to (1) its concerns that GMOs are not sufficiently tested and (2) its belief that organic farming practices can sustain the country on their own.

After doing that, Russia must come to grips with reality.

Despite being nearly twice as large as the United States, Russia has substantially less arable land, irrigated land, and land dedicated to permanent crops. Consider the following land area comparison between Russia and the United States:

	Russia	United States
Total Land (sq. km)	17,098,242	9,826,675
Arable Land (sq. km)	1,215,685	1,600,765
Irrigated Land (sq. km)	43,460	266,440
Permanent Crops (sq. km)	17,098	25,549

2013 figures. Source: CIA World Factbook.

The United States is simply more efficient with its land and enjoys better geography than Russia, which suffers from a lack of proper soils and climates (too cold or too dry) for productive agriculture despite its size. Russian farmland is also threatened by "soil contamination from improper application of agricultural chemicals, groundwater contamination from toxic waste, and abandoned stocks of obsolete pesticides," according to the CIA World Factbook. Sounds pretty organic to me.

Russia intends to feed Europe with the majority of its organic food needs within the next decade, but it's far from being a global organic powerhouse. A recent Bloomberg analysis of 165 countries ranked by organic farmland failed to place the country in the top 20. That means Russia ranks behind the Czech Republic, Greece, and all eight (yes, eight) farmers and ranchers in Falkland Islands when it comes to organic farmland for raising livestock or cultivating crops. Indeed, a 2011 report from the International Federation of Organic Agriculture Movements estimated the value of Russia's organic products at only $60 million-$80 million.

Additionally, Russia simply doesn't support its farmers as well as its European counterparts. While traditional farming is subsidized to the tune of $410-$545 per hectare in the European Union, organic farming captures federal support of nearly $1,230 per hectare. The Russian Ministry of Agriculture offers domestic farmers just $200 per hectare for producing organic foods. Subsidies may be relative to the economics of each country, but Russia isn't doing much to compete with European organic farmers.

While the United States smoking Russia in terms of agricultural efficiency is bad enough, it gets worse when you consider that the Russian economy is substantially more reliant on agriculture. Consider the following economic comparison between Russia and the United States:

	Russia	United States
GDP	$2.553 trillion	$16.72 trillion
GDP From Agriculture	$110 billion	$180 billion
Total Labor Force	75.29 million people	155.4 million people
Labor Force Dedicated to Agriculture	7.3 million	1.09 million

2013 figures. Source: CIA World Factbook.

How is the United States so efficient with its agricultural land? There's strong support for farmers through various government policies, and there has been strong and constant investment in next-generation technologies. Like it or not, some of those next-generation technologies include biotech crops, which alone accounted for 0.9% of American GDP in 2012.

Russia will regret banning biotech crops

Putin and other political leaders can say whatever they want about the atrocities of biotech crops sold by Monsanto and Syngenta, but a quick investigation into the economics doesn't support claims that organic food is ready to supply the nation's food, not to mention the food for other countries. There may very well be a European market for Russia's future organic food products, but it's difficult to imagine the Russian economy enjoying much of a boost from organic farming anytime soon, if ever, given its dire state today.

At a time when Russia should be investing heavily in next-generation agricultural technologies such as biotech crops to catch up to leading nations, it seems to be taking a step backwards with old-world beliefs. I don't see agricultural policies in Russia having much, if any, material effect on biotech seed producers. Monsanto, Syngenta, and Dow Chemical shareholders have no reason to worry about Putin.