EBRD mulls latest mega-corp support – for Monsanto
Bankwatch Mail | 14 December 2012
Monsanto, the world’s largest seed producer and one of the most well-known promoters of genetically modified crops worldwide, is in line to receive USD 40 million of public financial support from the European Bank for Reconstruction and Development (EBRD), the bank disclosed last month.
This article is from Issue 54 of our quarterly newsletter Bankwatch Mail
The proposed support, according to project information on the EBRD website, involves ‘unfunded risk participation’ for cases where farming companies cannot pay for seeds and agrochemicals that they have signed up to with Monsanto. The USD 40 million pot is to be aimed at medium-large farmers and a small selection of key distributors in Bulgaria, Hungary, Russia, Serbia, Turkey, and Ukraine.
Since its initial announcement of the potential Monsanto deal, the EBRD has already moved the board date for a final decision on the deal from January next year to April.
Concerns have been mounting about why the world’s fourth largest agrochemical company, one that features in the Fortune 500 list of top global businesses, should be being onsidered for public financial support.
Serbian environment groups, including Bankwatch member CEKOR, protested outside the EBRD country office in Belgrade on November 30. Chief among their demands was that the EBRD refuse to finalise this support for Monsanto and instead focus in Serbia on developing financial programmes to assist small-scale green, organic and other producers in the country.
In Germany, Kirsten Tackmann, a member of the German parliament and responsible for rural affairs for the Die Linke party, has requested a statement from the federal government on its views regarding the potential deal – Germany being a key EBRD shareholder.
At the end of last month, 157 NGOs from around the world – including Bankwatch – sent a letter to EBRD management arguing against the approval of what they described as ‘this financial aid package for Monsanto’, while also calling on the bank to reassess its approach to food security, from a focus on promoting large-scale industrial farming to supporting more sustainable, biodiversity friendly and smaller scale farms.
Whether highly controversial genetically modified organisms (GMOs) will feature in Monsanto’s eastern European expansion is a moot point, with the EBRD for now claiming that GMOs will not be involved. Last year in Hungary, one of the counties targeted by the Monsanto-EBRD deal, approximately 9000 hectares of corn had to be destroyed due to GMO contamination from seeds originating from Monsanto. Earlier this year, Greenpeace Switzerland found Monsanto’s GT73 (also called RT73) GM oilseed rape (Canola) – which is illegal in Switzerland – growing wild in Basel’s port area.
Exactly how the EBRD will be able to ensure that its financing has nothing to do with support for GMOs will be an abiding concern as the bank approaches a final funding decision, though uncertainty is bound to loom large given Monsanto’s track record.
What is known, though, is that one of the EBRD’s core goals is to promote the private sector and competition in transition countries. However, as Ionut Apostol, Bankwatch’s EBRD coordinator, points out: ”How could giving money to one of the world’s richest corporations possibly count as fulfilling this mission?”
The EBRD is no stranger to handing out ‘soft’ public money, often as ‘political insurance’, to major corporations moving into eastern markets. In the last ten years it has backed Volkswagen’s expansion into Russia, handed out a series of loans to cement giant Lafarge, and notoriously loaned EUR 250 million to BP for the Baku-Tbilisi-Ceyhan pipeline project.
The EBRD has also regularly provided millions in various loans to the steel giant ArcelorMittal for environmental ‘clean-ups’ in the company’s facilities across eastern Europe. A string of disturbing events have seriously undermined the idea that ArcelorMittal has used this public loan money effectively. Indeed, in 2010, the EBRD’s evaluation department gave a Mittal project in Krivy Rih, Ukraine the bank’s worst ever project evaluation.