In the three years since the first transgenic seeds were introduced, crop biotechnology has grown from a young science to a hot business: About half of US cotton fields, 40 per cent of soybean fields and 20 per cent of maize fields this year are genetically altered. Now, in a stunningly swift concentration of power, much of the design, harvest and processing of genetically engineered crops is coming under these two companies' influence.

Not long ago, Monsanto and DuPont were chemical companies slugging it out over synthetic carpet fibres. Now, there are spending billions of US dollars on talent, technology and other biotechnology assets, racing to rewire US crops of maize, soybeans and other mainstays for use in everything from new types of food to pharmaceuticals and plastics.

Over just the last 12 months, the two companies have been escalating their war on severalfronts. There has already been a price battle over the genetically engineered seed sold to farmers, and their bidding contests for seed companies are pushing prices into the stratosphere.

They are racing to build "dirt-to-dinner" biotechnology pipelines, with enormous implications for the US food supply. And many agriculture officials and academics are already leery of their rapid growth. "What's happening is mind-boggling," says Marshall Martin, a Purdue University expert on biotechnology public policy. "The worry out there is that this is becoming an oligopolistic situation."

Officials for both companies say they consider themselves strong competitors. Their rivalry helps finance scientific breakthroughs, they say, and emphasise that there is still room for more competition. In recent weeks, Monsanto and DuPont have pulled into their competing camps many of the most important plant-biotechnology assets, including seed producers. Seeds are the bridge between biotech labs and US farmers, the deliverymechanism for the genes that scientists cook up.

Through direct investment and alliances, the two rivals are getting control of seed producers for most major US crops. Combined, they would control roughly half of the US seed market for soybeans and even more of the seed market for maize - the two largest American crops. Monsanto alone stands to control a staggering 80 per cent of the US cotton-seed market, if pending transactions win regulatory approval.

DuPont is spending $1.7 billion on a joint venture with the biggest US seed producer, Pioneer Hi-Bred International Inc. Monsanto, already the owner of established seed lines such as Asgrow and Holden's, now has agreements to buy DeKalb Genetics Corp, the No 2 US seed company, and Delta & Pine Land Co, the giant cotton-seed company. Monsanto's tab over the past two years for these deals stands to be $ 6.7 billion. With most of the big seed producers aligned with the two giants, any third player would have to piece together an empire from the hundreds oflocal Mom-and-Pop outfits that make up the rest of the seed business. Several US and European companies also have expressed interest in the US's genetically modified crops.

Chief among them is Swiss pharmaceutical giant Novartis AG, which has a large biotechnology effort involving plants and is a major seed producer on a global basis. But it has just 8.5 per cent of the US maize-seed market and has been unwilling to buy US seed companies at prices as high as 100 times earnings.

In the first wave of biotech crops - plants designed to resist insects and exposure to powerful weedkillers - Monsanto is far ahead. Seeds equipped with Monsanto genes are being planted around the globe this year on roughly 22 million hectares.

But DuPont has more patents for the second - and potentially far more valuable - wave, which involves changing plants' nutritional attributes. There are already dozens of futuristic ideas on the drawing board.

Among them: instructing soybeans to make more of a natural compound thatmight fight cancer, or making maize that reduces the amount of saturated fat in the eggs of the chickens that eat it. Currently, DuPont is contracting with farmers in the Mid-west to grow a soybean for making healthier cooking oil.

Eventually, DuPont hopes to be able to take orders for a new type of crop from food companies such as Nestle SA or ConAgra Inc., create it in the laboratory, contract with farmers to grow millions of hectares and process it into a food ingredient. DuPont has bought a soybean-milling company for $ 1.5 billion and plans to raise billions more for its biotechnology push by selling its Conoco oil unit. Last week, DuPont agreed to pay $2.6 billion to buy out its partner, Merck & Co., in a pharmaceutical venture, giving DuPont control and allowing it to speed research into plants capable of making drugs as well as healthier food.

Monsanto is catching up by forming a joint venture with grain-processing giant Cargill Inc. The venture will use Cargill's sprawling US system of ruralgrain elevators to contract with farmers to grow genetically engineered crops and mill them into ingredients. They would sell the ingredients to Cargill's customers, including most of the world's biggest food companies.

The pact, which calls for each partner to contribute $100 million a year for research, aligns Monsanto with a huge company with fiscal 1997 sales of $56 billion, and is well-known for making long-term investments.

Wall Street is so infatuated with crop biotechnology that analysts are dreaming up scenarios for DuPont and Monsanto to get together. A combination between the two is a persistent and intriguing rumour. But the companies are now such big rivals that any combination would probably ignite a political firestorm across the US Farm Belt and in Washington.

Monsanto enters India; to supply hybrid seeds through Mahyco

Monsanto is finally in India. On May 8, it announced the acquisition of a 26 per cent stake in the Maharashtra Hybrid Seeds Company (Mahyco), the country'slargest private sector seed company owned by Barwales.

The acquisition, first by Monsanto in India, is said to be for an estimated amount of Rs 180 crore through its 100 per cent subsidiary Monsanto India. Monsanto and Mahyco have formed a 50:50 joint venture christened as Mahyco Monsanto Biotech. Initially, the Monsanto led joint venture will introduce, new insect-tolerant cotton variety in the country. The new cotton variety, Bollgard, is claimed to have the potential to increase cottton productivity by around 20 per cent. An experimental launch is slated for next year.

The deal with Mahyco, probably the first major acquisition by the Monsanto group in the country, will see Mahyco promoters, the Barwales, divest 16 per cent of their equity holding for approximately Rs 112 crore. The closely held Mahyco is the market leader in the hybrid-seeds segment. The balance 10 per cent equity will be picked up through a fresh equity issue of around Rs 70 crore.

The Monsanto group operates through three companiesin the country: Monsanto India, 100 per cent owned by Monsanto, USA; Monsanto Enterprises, 100 per cent subsidiary of Monsanto India and Monsanto Chemicals, a 40 per cent subsidiary of Monsanto USA.

Monsanto will extend its technical expertise to the Indian venture. It has over 1,000 scientists,researchers and specialists working towards developing sustainable agricultural technologies in over 100 countries. Mahyco employs approximately 130 scientists at nine research stations and has over 20 research farms all over the country. It is also on course to set up a new hi-tech R&D unit. Mahyco has the following facilities in the country: