Monsanto, DuPont square off in crop seed turf war

By Carey Gillam

KANSAS CITY, Missouri (Reuters) - It's getting dirty down on the farm.

As U.S. farmers prepare to harvest billions of bushels of corn and soybeans -- key ingredients in food, livestock feed and transportation fuel around the world -- seed technology titan Monsanto Co (MON.N) and its chief rival DuPont (DD.N) are ramping up their rivalry to new heights.

DuPont is accusing Monsanto of illegal anti-competitive practices, while Monsanto counters that DuPont is engaging in a covert smear campaign that borders on fraud.

Monsanto CEO Hugh Grant this week sent a letter, a copy of which was obtained by Reuters, to DuPont chairman Charles Holliday accusing the company of a "serious breach of business ethics" and requesting that a special committee of DuPont's independent directors investigate what Grant called an "attack" on Monsanto's seed business.

Monsanto officials claim DuPont has supported forged documents and secretly funded Monsanto critics.

"This is just the tip of the iceberg of dirty tricks. I have never seen corporate conduct of this nature," said Monsanto lawyer Scott Partridge.

DuPont counters that it is simply trying to expose what it calls Monsanto's "illegal monopoly" and the harm it says Monsanto is doing to farmers and others up and down the food chain.

"This is not just a DuPont problem. This is a competition problem. They've gained illegal monopoly power," said DuPont attorney Don Flexner.

The stakes have now risen as both the U.S. Department of Agriculture and the Justice Department said this month they will launch an examination of competition and antitrust concerns in the seed industry.

"We understand that there are concerns regarding the levels of concentration in the seed industry, particularly for corn and soybeans," said Philip Weiser, deputy assistant attorney general in the antitrust division at the U.S. Department of Justice.

SOURED RELATIONS

Both companies have strong positions in the U.S. seed industry and have been racing each other and other competitors to develop higher-yielding crops through genetic modifications and other means.

This spring, the competition spilled into the courts as Monsanto and DuPont sued each other over a soured licensing arrangement.

Monsanto claimed DuPont was using its Roundup Ready herbicide-tolerant trait outside the scope of the agreement. DuPont countersued, seeking relief under antitrust laws to end what it calls "Monsanto's multifaceted, anti-competitive scheme to unlawfully restrict competition."

Monsanto claims, and DuPont does not dispute, that DuPont has been aligning with, and in some cases funding, groups critical of Monsanto.