Monsanto shareholders reject study on crop risks
Napa, Calif.-based Harrington Investments had put up for shareholder vote a request to study "material financial risks or operational impacts" of the chemicals and genetically modified crops that Monsanto sells.
Monsanto's seeds are engineered to withstand the weed killer Roundup, allowing farmers to reduce the use of other chemicals and limit the practice of tilling fields to kill weeds. The company's seeds dominate corn, soybean and sugar beet production in the U.S.
Harrington Investments CEO John Harrington said in a statement that he is concerned about the possible environmental and economic impacts of Monsanto's engineered crops. The plants have patented genes inside them, and some countries, particularly in Europe, block U.S. crop exports if traces of those genes are present.
Harrington said he is concerned that "genetic drift" from engineered crops could contaminate farmers' organic crops and prohibit those crops from being sold to markets in Europe, China and Japan.
"The potential legal implications for Monsanto are staggering," Harrington said.
St. Louis-based Monsanto had recommended shareholders defeat the proposal. The company said an additional report on that topic would "be redundant and provide no meaningful additional information" because Monsanto has already studied the issue extensively. Most shareholders present at the meeting voted against the proposal, with only a small percentage voting in favor, according to a regulatory filing Tuesday.
Lawsuits have been filed on the issue. In August, three environmental groups filed in West Virginia seeking to have the U.S. Fish and Wildlife Service halt the planting of genetically-modified crops on 44,000 acres of federal land in the South. The Center for Food Safety, Public Employees for Environmental Responsibility and Beyond Pesticides pursued two similar lawsuits in Delaware, which resulted in the agency ending the practice in its 12-state northeast region.
The groups maintain that the use of genetically-engineered crops such as those modified to resist the herbicide glyphosate — marketed by Monsanto as RoundUp — promotes growth of different feeds that wildlife would not normally be eating. In 2010, a California judge ruled that GMO beet seeds developed by Monsanto would not be able to be planted until the U.S. Department of Agriculture reviewed the effect those crops could have on other food.
Separately, shareholders voted to keep Monsanto CEO Hugh Grant and directors Janice Fields, C. Steven McMillan and Robert J. Stevens on the board until 2015. Shareholders also approved executive pay and bonus plans.
The company earlier this month reported a surge in fiscal first-quarter earnings on strong seed sales and lifted its 2012 forecast to the high end of previous estimates. Monsanto has said it's seen a very strong start to the year, with real growth in Latin America and early orders in the United States.
Shares of Monsanto rose 22 cents to close at $80.11, near its 52-week high of $81.43.