Source: Haaretz International via Agnet Feb. 3/05 - II

Hazera Genetics, which develops and markets hybrid seeds for produce and field crops, has signed a cooperation agreement with an unnamed leading U.S. producer of cotton seeds, which Haaretz has learned is Monsanto, the world leader in genetic engineering.

Part of the agreement is that the companies will integrate technologies. Monsanto brings to the table resilience to pests and herbicides, while Hazera offers the venture its ability to hybridize cotton seeds. Monsanto trades in the U.S. at a $14.5 billion market capitalization.

Hazera CEO Rami Dar refused to identify the U.S. corporation in the joint venture, but expects four to five years of cooperation starting with the introduction of the resiliency characteristics to Hazera cotton strains. He says the U.S. company will likely then choose to market the new seed and pay Hazera royalties.

The Hazera cotton variety is a hybrid of the common Acala, known for high yields and low quality, and Pima, known for low yields and selling for twice the Acala price.

Hazera's variety saves 40 percent of water consumption, important in light of declining water availability in growing-areas California and Peru. The variety also has a shorter growing period, reducing risks from changing weather conditions.

Hazera is dealing with production limitations, as the new variety relies on accurate but labor-intensive hand pollination, not apiarian pollination.

Dar projects sales of the new strain to reach $10 million annually in the next five years.

Monsanto's sturdy variety is unaffected by broad-spectrum herbicide Roundup. The company also engineered a pest resistant variety containing a protein that is fatal to worms that attack cotton.

Monsanto has recently announced plans to focus on genetic engineering of seeds, and acquired major seedmaker Seminis for $1 billion in shares and $400 million in cash.

Hybrid seeds are not perennial, so farmers are forced to buy Hazera products year after year. Dar explains that hardy seed varieties had generally been engineered from open varieties, allowing the planting of a second generation of seeds that still carried the characteristics of the original seed, in which the company invested millions of dollars developing.

Monsanto, badly burned by the theft of its intellectual property in engineered soy bean seeds in Argentina, had developed a terminator gene that rendered second-generation seeds infertile, but pressure from environmental groups led to its prohibition.