Despite Monsanto Trial Verdict, World Still Needs Pesticides

(Bloomberg) -- It may seem like Judgment Day has come for glyphosate, with a California jury slapping $289 million in damages on Monsanto Co. in a cancer trial, and a federal judge in Brazil halting use of the herbicide over health concerns -- all in the space of a week.

Dramatic headlines are par for the course for Monsanto, a company that activists have targeted for decades and which Germany’s Bayer AG just bought for $66 billion. Bayer shares tumbled Monday on concerns over a protracted legal battle, but Monsanto has weathered these kinds of storms ever since its herbicide and the genetically modified crops it’s used on became such a critical part of modern agriculture.

Upon appeal, damages and rulings will likely be overturned or reduced, said Chris Perrella, an analyst at Bloomberg Intelligence.

In the end, glyphosate is the world’s most popular and widely used weedkiller for a reason. It has been good for the environment and good for farmers, and it’ll be needed as the global population expands by billions in the coming decades, Perrella said. The only alternatives to glyphosate are far “nastier” chemicals, or using diesel tractors to till fields, which creates a host of environmental problems, he said.

Soaring Yields

Crop yields have soared in recent years thanks to advances in seed technology, pesticides, herbicides and other inputs. Booming world harvests have helped to keep food inflation relatively tame even as global climate change has brought increased risks from drought, heat and storms. At the same time, there’s been growing consumer distrust of crop chemicals and GMOs, helping to drive a surge in demand for organic food.

While regulators around the world, including the U.S. Environmental Protection Agency, say that glyphosate doesn’t cause cancer, the France-based International Agency for Research on Cancer, a branch of the World Health Organization, labeled the chemical a probable carcinogen in 2015, opening the door to such lawsuits.

The California trial was just the first of more than 2,000 similar cases are pending, according to Jonas Oxgaard, an analyst at Sanford C. Bernstein & Co. Monsanto plans to appeal the jury’s verdict.

Anti-GMO onlookers rejoiced after the verdict. The Organic Consumers Association said it hoped this would be the “first of many defeats” for the “most evil corporation in the world.” Monsanto said in a statement that the case didn’t change the fact that “more than 800 scientific studies and reviews” indicate that glyphosate doesn’t cause cancer.

An Aug. 3 ruling by a federal judge in Brasilia suspended the use of glyphosate as the health ministry evaluates its toxicity. The Brazilian Soy Producers Association has promptly appealed.

“It’s as if the court just randomly said, you can’t use tractors, and we need to study the health effect of tractors,” Oxgaard said of the Brazilian ruling. “Ultimately, GMO haters have been spectacularly unsuccessful -- as much as they hate it and with the passion they hate it, penetration of GMOs keeps increasing every year.”

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