Monsanto Rejects GMO Labeling Shareholder Proposal in SEC Proxy Statement

Proxy Item No. 4: Shareowner Proposal One

This proposal was submitted by Adam Eidinger, Washington, D.C. As of July 30, 2013, Mr. Eidinger indicated that he held 75 shares of Monsanto common stock. The proposal has been carefully considered by the board of directors, which has concluded that its adoption would not be in the best interests of the company or its shareowners. For the reasons stated after the proposal, the board recommends a vote “Against” the shareowner proposal.

The proposal and supporting statement are presented as received from the shareowner proponent in accordance with the rules of the SEC, and the board of directors and the company disclaim any responsibility for its content. We will furnish, orally or in writing as requested, the address of the proponent of this shareowner proposal promptly upon written or oral request directed to the company’s Secretary.

Information regarding the inclusion of proposals in Monsanto’s proxy statement can be found on page 82 under Shareowner Proposals for 2015 Annual Meeting.

Shareowner Statement
WHEREAS:

• Genetic engineering is the direct manipulation of an organism’s genome using biotechnology.
• For thousands of years, mankind has modified plants through grafting, artificial selection, and without the use of genetic engineering.
• Transgenic DNA produced through modern genetic engineering is not found in natural foods and was not in the food supply of previous generations of mankind.
• Americans have the right to know what they are eating.
• U.S. law does not require the labeling of patented biotechnology in foods sold in grocery stores.
• Company stands by its products and believes they are safe.
• Due to the uncertainty regarding the potential negative side effects of genetic engineering on humans, animals, and the environment, it is imperative that the Company be transparent with customers concerning our labeling efforts.
• The Company’s Pledge [1] says that we will ensure that “information is available, accessible, and understandable.”
• Transparency provides consumers the power to decide what kind of foods are grown on farms and served on dinner tables.
• Over 60 countries around the world have regulations concerning the labeling of foods produced using genetic engineering.
• In 2002, the Company said “Food Labeling. It has Monsanto’s Full Backing” in regards to the labeling of genetically engineered foods in the United Kingdom.
• In 2013, there was legislation introduced in over two dozen U.S. state legislatures concerning the labeling of foods created using genetic engineering.
• The state legislatures of Connecticut and Maine have passed legislation requiring foods sold in those states to be labeled if they were produced using genetic engineering, but only 4 or more other New England states pass similar legislation.
• The Company spent $8,112,866.55 in 2012 to prevent California residents from voting to increase transparency in their state’s food labels.
• As of July 2013, the Company has spent $242,156.25 to prevent Washington state residents from voting to increase transparency in their state’s food labels.
• The money spent by the Company to prevent legislation that discloses whether food produced using genetic engineering dilutes shareowners earnings per share.
• The Company believes that nationwide regulations are needed to prevent 56 different state & territory food labeling laws.

RESOLVED: The Monsanto Board shall prepare a report, at reasonable expense and omitting proprietary information, assessing any material financial risks or operational potential impacts on the Company in order to:

• Work with the FDA to develop food labeling guidelines for American consumers that discloses whether genetic engineering was used to produce the food;
• Work with the FDA to develop standard threshold of 0.9% or higher for foods created with genetic engineering
• Analyze the inclusion of U.S. patent numbers on American food labels where patented biotechnology was used to produce the food;

The report shall be available by July 1, 2014 and be posted online on our Company’s website. In order to ensure that our Company upholds its pledge of transparency, we urge a vote FOR this resolution.
[1] “Our Pledge” – Transparency: https://www.monsanto.com/whoweare/Pages/monsanto-pledge.aspx

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THE FOREGOING PROPOSAL FOR THE FOLLOWING REASONS:

Food is one of the most important and significant facets of our world. It is a critically important issue to everyone and is the focus of debates and dialogues from the halls of the United Nations Food and Agriculture Organization in Rome, to the grocery store aisles in Buenos Aires, to the open markets in Cairo. There are diverse points of views on everything from food security, to subsidies, to sustainable intensification, to loss and waste, to distribution systems and even to labeling. It matters to people where food comes from, how it is produced, and how food safety is ensured. As a seed company that participates in the agriculture food value chain, we are actively listening to and participating with others in this dialogue about food. In addition:

• Our work in agriculture represents just one component of a broad and diverse food value chain that involves many parties. The proponent is seeking a report about the impact of the company’s working with the Food and Drug Administration (FDA) to effect a change in labeling on consumer food products. These are not Monsanto products nor are they manufactured, controlled, packaged or labeled by our company. We sell seed to farmers, who often sell their crop harvest to a grain processor, who sells grain or ingredients to a food company, who may further process the ingredients, then manufacture the food item, which it then sells to a retailer, who ultimately sells the finished product to a consumer. As a company that is focused on agricultural productivity and which sells products to farmers our position in the chain does not afford us the expertise that would inform an assessment of consumer food packaging information.
• Genetically modified (GM) crops are but one important tool that farmers may choose in engaging in sustainable agriculture. Farmers, whether they adopt conventional, GM or organic seeds, employ a variety of production practices to control weeds and pests and improve the yield of their crops. In order to reduce the need for topical controls or other practices, millions of farmers around the world choose to control weeds and pests, and protect their crops’ yield, through GM seeds, which incorporate a new gene in the seed, such as a protein from a bacterium that is commonly applied over the top of conventional and organic crops to control pests.
• We support current FDA guidance on food labeling which is based on the attributes of the food itself. In the United States, the FDA regulates the safety and labeling of foods and food products derived from crops (conventional, GM, and organic), and all must meet the same safety requirements. FDA guidance requires labeling of food products containing ingredients derived from GM crops if there is a meaningful difference in composition, nutrition or safety between that food and its counterpart derived from conventional crops. In the absence of such a difference, the FDA has determined that mandatory labeling is not required. The American Medical Association (AMA) supports the FDA’s approach and approved a formal statement asserting that there is no scientific justification for special labeling of foods containing GM ingredients. FDA guidance does not require labeling of production practices used by farmers employing conventional or organic methods to control weeds and pests and improve their yields.
• We support voluntary labeling to support consumer choice, provided the label is truthful and not misleading. We recognize that some consumers may prefer to avoid foods that contain GM ingredients. Food companies recognize this as well, and are providing these customers the choices they prefer through organic offerings or by voluntarily labeling their products “non-GM”. People who prefer to purchase non-GM foods can easily find such products. The FDA allows food manufacturers to label their products voluntarily to indicate certain attributes or production methods (e.g., organic, conventional or GM), provided the label is truthful and not misleading. We support this approach and are pleased to sell our seed products to farmers employing any of these production methods. For more information about our views on consumer choice and proposals that would mandate labeling of food products containing GM ingredients, please visit https://www.monsanto.com/newsviews/Pages/food-labeling.aspx.
• We believe that mandatory labeling of GM ingredients where there is no meaningful difference in nutrition or safety could confuse and mislead consumers. Demands for mandatory labeling of GM ingredients as a matter of consumer choice may instead lead to a reduction in consumer choice by misleading consumers into thinking products bearing such a label are not safe, are less nutritious or are otherwise inferior to similar products without the label. Indeed, the pejorative connotation of a mandatory label could result in consumers viewing it as a warning statement that could scare them about the foods they have come to like and trust. The suggestion advanced in the proposal is that the company should advocate for the proponent’s preference for labeling consumer food products, which is contrary to the position we have stated publicly and contrary to the views of our customers and the food value chain.
• We support transparency and dialogue about biotechnology and our products, both with our customers and with consumers. In the United States, the Grocery Manufacturers Association, of which the company is a member, recognizes that some consumers may have questions about GM production methods and food ingredients and is providing information through a dedicated website, https://factsaboutgmos.org/. This site informs readers that if the ingredient label on a food or beverage in the U.S. indicates that the product contains corn or soy, the product most likely contains ingredients derived from GM seeds because a very high percentage of corn and soy in the United States is grown from GM seed products. In addition, www.monsanto.com, provides extensive information about biotechnology benefits and safety, generally, and Monsanto’s genetically modified seed products, specifically. Recently, Monsanto has worked with other seed companies to make additional information about agricultural biotechnology available to interested consumers. The website GMOanswers (https://www.gmoanswers.com) invites consumers to ask questions about agricultural biotechnology. General safety and benefits questions are addressed by independent experts; company-specific questions are addressed by company representatives.
• Assessing the inclusion of U.S. patent numbers related to biotechnology on American food labels is unrelated to our business and such labeling would likely be disruptive to the food supply chain. The consumer food product labels that the proposal suggests analyzing are unrelated to our business of selling seed products to farmers. The proposed assessment would provide no meaningful information to shareowners. The proposal appears to suggest that the inclusion of patent numbers on product labels might serve as indicia that a product contains ingredients derived from GM seeds. The food manufacturer would then be burdened with significant compliance challenges if required to specifically identify the variety of seeds that produced grain that was ultimately processed in the food. Given the extensive pre-commercial food safety assessment and regulatory reviews by government officials, the U.S. food system operates effectively and efficiently in managing commodity crops, such as corn, soy and cotton. A separate program would be required to harvest, crush, store, transport and process by particular seed varieties, in order to enable labeling to that level of specificity, and would undermine the system.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “AGAINST”
THIS SHAREOWNER PROPOSAL
AND YOUR PROXY WILL BE SO VOTED IF THE PROPOSAL IS PRESENTED
UNLESS YOU SPECIFY OTHERWISE

SOURCE: Page 76, Monsanto Company Proxy Statement, Securities and Exchange Commission

New York Times: Major Grocer to Label Foods With Gene-Modified Content

Safe Food Action St. Louis outside Whole Foods Market in Brentwood, MO

Major Grocer to Label Foods With Gene-Modified Content

By Stephanie Strom

Whole Foods Market, the grocery chain, on Friday became the first retailer in the United States to require labeling of all genetically modified foods sold in its stores, a move that some experts said could radically alter the food industry.
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A. C. Gallo, president of Whole Foods, said the new labeling requirement, to be in place within five years, came in response to consumer demand. “We’ve seen how our customers have responded to the products we do have labeled,” Mr. Gallo said. “Some of our manufacturers say they’ve seen a 15 percent increase in sales of products they have labeled.”

Genetically modified ingredients are deeply embedded in the global food supply, having proliferated since the 1990s. Most of the corn and soybeans grown in the United States, for example, have been genetically modified. The alterations make soybeans resistant to a herbicide used in weed control, and causes the corn to produce its own insecticide. Efforts are under way to produce a genetically altered apple that will spoil less quickly, as well as genetically altered salmon that will grow faster. The announcement ricocheted around the food industry and excited proponents of labeling. “Fantastic,” said Mark Kastel, co-director of the Cornucopia Institute, an organic advocacy group that favors labeling.

The Grocery Manufacturers Association, the trade group that represents major food companies and retailers, issued a statement opposing the move. “These labels could mislead consumers into believing that these food products are somehow different or present a special risk or a potential risk,” Louis Finkel, the organization’s executive director of government affairs, said in the statement.

Mr. Finkel noted that the Food and Drug Administration, as well as regulatory and scientific bodies including the World Health Organization and the American Medical Association, had deemed genetically modified products safe.

The labeling requirements announced by Whole Foods will include its 339 stores in the United States and Canada. Since labeling is already required in the European Union, products in its seven stores in Britain are already marked if they contain genetically modified ingredients. The labels currently used show that a product has been verified as free of genetically engineered ingredients by the Non GMO Project, a nonprofit certification organization. The labels Whole Foods will use in 2018, which have yet to be created, will identify foods that contain such ingredients.

The shift by Whole Foods is the latest in a series of events that has intensified the debate over genetically modified foods. Voters defeated a hard-fought ballot initiative in California late last year after the biotech industry, and major corporations like PepsiCo and Coca-Cola, spent millions of dollars to fight the effort. Other initiatives have qualified for the ballot in Washington State and Missouri, while consumers across the country have been waging a sort of guerrilla movement in supermarkets, pasting warning stickers on products suspected of having G.M.O. ingredients from food companies that oppose labeling. Proponents of labeling insist that consumers have a right to know about the ingredients in the food they eat, and they contend that some studies in rats show that bioengineered food can be harmful.

Gary Hirshberg, chairman of Just Label It, a campaign for a federal requirement to label foods containing genetically modified ingredients, called the Whole Foods decision a “game changer.”

“We’ve had some pretty big developments in labeling this year,” Mr. Hirshberg said, adding that 22 states now have some sort of pending labeling legislation. “Now, one of the fastest-growing, most successful retailers in the country is throwing down the gantlet.”

He compared the potential impact of the Whole Foods announcement to Wal-Mart’s decision several years ago to stop selling milk from cows treated with growth hormone. Today, only a small number of milk cows are injected with the hormone.

Karen Batra, a spokeswoman for BIO, a trade group representing the biotech industry, said it was too early to determine what impact, if any, the Whole Foods decision would have. “It looks like they want to expand their inventory of certified organic and non-G.M.O. lines,” Ms. Batra said. “The industry has always supported the voluntary labeling of food for marketing reasons.”

She contended, however, that without scientific evidence showing that genetically modified foods caused health or safety issues, labeling was unnecessary.

Nonetheless, companies have shown a growing willingness to consider labeling. Some 20 major food companies, as well as Wal-Mart, met recently in Washington to discuss genetically modified labeling.

Coincidentally, the American Halal Company, a food company whose Saffron Road products are sold in Whole Foods stores, on Friday introduced the first frozen food, a chickpea and spinach entree, that has been certified not to contain genetically modified ingredients.

More than 90 percent of respondents to a poll of potential voters in the 2012 elections, conducted by the Mellman Group in February last year, were in favor of labeling genetically modified foods. Some 93 percent of Democrats and 89 percent of Republicans in the poll, which had a margin of error of plus or minus 3.1 percent, favored it.

But in the fight over the California initiative, Proposition 37, the opponents succeeded in persuading voters that labeling would have a negative effect on food prices and the livelihood of farmers.

That fight, however, has cost food companies in other ways. State legislatures and regulatory agencies are pondering labeling on their own, and consumers have been aggressive in criticizing some of the companies that fought the initiative, using Twitter and Facebook to make their views known.

Buoyed by what they see as some momentum in the labeling war, consumers, organic farmers and food activists plan to hold an “eat-in” outside the F.D.A.’s offices next month to protest government policies on genetically modified crops and foods. Whole Foods, which specializes in organic products, tends to be favored by those types of consumers, and it enjoys strong sales of its private-label products, whose composition it controls. The company thus risks less than some more traditional food retailers in taking a stance on labeling.

In 2009, Whole Foods began submitting products in its 365 Everyday Value private-label line to verification by the Non GMO Project.

But even Whole Foods has not been immune to criticism on the G.M.O. front. A report by Cornucopia, “Cereal Crimes,” revealed that its 365 Corn Flakes line contained genetically modified corn. By the time the report came out in October 2011, the product had been reformulated and certified as organic.

Today, Whole Foods’ shelves carry some 3,300 private-label and branded products that are certified, the largest selection of any grocery chain in the country.

Mr. Gallo said Whole Foods did not consult with its suppliers about its decision and informed them of it only shortly before making its announcement Friday. He said Whole Foods looked forward to working with suppliers on the labeling.

Source: New York Times