Venture capital
The term 'venture capital' means investments that are more risky than 'normal' investments - often this means start-up cash for a new company with a high-tech big idea. Many of these might go bankrupt, but some do succeed and go on to play an important role in developing new frontline technologies. Success stories can lead to massive windfall profits in return for a rather small initial investment on the part of the venture capital firm - as was the case in the early days of the US computer software industry. Venture capital firms often end up being shareholders in the firm in which they invest.

According to the BVCA (British Venture Capital Association) [12] there are many who are interested in investing in biotechnology, but most of them specialize in the pharmaceutical and medical areas. In agricultural biotech venture capital is less important, but the following do have some holdings:

· 3i Group plc (who are about to take over the B.I.L., BiotechnologyInvestments Ltd, from Rothschild Asset Management. This fund has some holdings in agricultural biotechnology ) [13]
3i Group plc 91 Waterloo Road, London, SE1 8XP Tel: 020 - 7928 3131

· Lloyds TSB Development Capital Ltd [14]
50 Grosvenor Street, London, W1X 9FH Telephone: 020 - 7499 1500

· Midlands Venture Fund Managers Ltd [15]
The Square, Beeston, Nottingham, NG9 2JG Telephone: 0115-967 8400

Advisors/brokers
Financial advisors provide guidance for a company on how to play the stock markets - such as whether to invest in a new company, or on how the company's own shares are faring. A company's brokers also invest its surplus cash in other companies' shares, where it can continue earning a profit until needed for future investments. In recent years advisors and brokers have been kept busy by the rapid rate of concentration in the biotechnology sector - their role in facilitating mergers and takeovers makes them key agents in concentrating corporate power into fewer and fewer hands.

Many of the biggest merchant banks in the world have been involved in broking and advising for biotech-companies, for example:

· Credit Suisse First Boston (general advisor and broker for AstraZeneca [16] and DuPont [17 and acted as broker for Rhone-Poulenc in the merger with Hoechst to Aventis) [18]
Credit Suisse First Boston. 1 Cabot Square, London E14 Tel: 020 - 7888 8888

· Deutsche Bank (advisor for AkzoNobel in a deal where Hoechst sold off subsidiaries as part of the merger with Rhone-Poulenc) [19]
Deutsche Bank. 6 Bishops Gate, London EC2 Tel: 020 - 7545 8000

· Goldman Sachs Group Inc. (general advisor for AstraZeneca) [20]
Goldman Sachs Group Inc. 133 Fleet Street, London EC4 Tel: 020 - 7774 1000

· J.P. Morgan & Co Inc. (advisor and broker for both Hoechst and Rhone-Poulenc on their merger into Aventis) [21]
J.P. Morgan & Co Inc. 60 Victoria Embankment, London EC4 Tel: 020 - 7600 2300

· Lehman Brothers International [22]
Lehman Brothers International. 1 Broadgate, London EC2 Tel: 020 - 7601 0011

· Morgan Stanley Dean Witter & Co (general broker for DuPont) [23]
Morgan Stanley Dean Witter & Co. 25 Cabot Square, London E14 Tel: 020 - 7513 8000

Analysts
Whereas advisors give financial advice to the company itself, analysts provide information about the company for other investors. Their word can mean the difference between an investor putting millions into a company or shifting cash elsewhere. Not surprisingly, companies are particularly keen to keep a good relationship with their analysts.

But they don't always succeed. In July 1999, Deutsche Bank issued a report called "Ag Biotech: Thanks, But No Thanks?", advising investors to sell their holdings in the seed company Pioneer Hi-Bred, as well as voicing general scepticism about the future for biotechnology generally. The report sent shockwaves throughout the industry, as it was the first time that a major financial player had broken ranks and admitted that consumer hostility was undercutting the GM foods market. [24]

Analysts work mostly for merchant banks, and individuals or teams specialise in particular companies or sectors. Analysts specialising in biotech include:

· Theodore Semegran at Brown Brothers Harriman & Co. [25]
Brown Brothers Harriman & Co. 59 Wall Street, New York, NY 10005, USA Tel: 001 212 483 1818

· Jonathan Senior at Credit Suisse First Boston [26]
Credit Suisse First Boston. 1 Cabot Square, London E14 Tel: 020 - 7888 8888

· Frank Mitsch and Jennifer Mitchell at Deutsche Bank [27]
Deutsche Bank. 1 South Street, Baltimore MD 21202, USA Tel: 001 410 727 1700

· Paul Leming at ING Barings [28]
ING Barings (Paul Leming doesn't work here - we don't know where he works) 60 London Wall, London EC2 Tel: 020 - 7767 1000

· Donald Carson at J.P. Morgan & Co Inc [29]
J.P. Morgan & Co Inc. 60 Wall St., 46th Fl., New York, NY 10260-0060, USA Tel: 001 212 483 2323

· John Roberts at Merrill Lynch & Co Inc [30]
Merrill Lynch & Co Inc. 25 Ropemaker Street, London EC2 Tel: 020 - 7628 1000

· Karl Keegan at Warburg Dillon Read [31]
Warburg Dillon Read. 1 Finsbury Avenue, London EC2 Tel: 020 - 7567 8000

Banks
Every company has its bankers, who provide it with a range of services. These include everything from holding their accounts to providing loans. The capital a bank provides (in the form of an overdraft or loan) is more short-term than capital from shares, and may be used for any kind of investment - whether that involves opening a new pesticide plant or establishing a crop trials programme. A lending bank does not take any ownership over the company - the loan is simply a service provided for a fee (interest).

In a survey performed in the USA by the Federal Reserve Bank of Chicago in January this year, many bankers stated that they were sceptical about financing purchase of GMO seeds - between 4 and 12 percent said that they wouldn't finance it at all, and a further 28% did "hold reservations" about it. [32]

Some of the more important bankers in the UK, when it comes to financing biotechnology, are:

· Barclays Bank (Monsanto) [33]
Barclays Bank, High Wycombe branch. 16 High street, High Wycombe HP11 2BE Tel: 01494 - 442 155

· Citibank (AstraZeneca) [34]
Citibank. Concourse level, Cabot Place East, Canary Wharf, Poplar, London EC14 5QF Tel: 020 - 7512 9000

· HSBC Bank Plc (AstraZeneca) [35]
HSBC Bank Plc. 27 Poultry, London EC2P 2BX Tel: 020 - 7260 8000

· National Westminster Bank plc (High Wycombe branch for Monsanto [36] and Bradford Senior Managers Office for Novartis) [37]
National Westminster Bank, High Wycombe branch, PO Box No 17, High Wycombe, HP11 2AJ Tel: 01494 - 510 234
National Westminster Bank, Bradford Senior Managers Office, 27 Bolton Road, Bradford. BD1 1EQ Tel: 01274 - 730 790

Insurance
Without an insurance company shouldering the burden of risk on its behalf, a company would need to be much more cautious. This is particularly significant with regard to biotechnology - as the potential risks associated with consumer health and the environment could be massive.

GMOs are a difficult area for insurance companies. Due to the inherent uncertainties associated with the technology, they have little way to correctly evaluate the risks they are taking - something the reinsurance company Swiss Re stated in a report published 1998 [38]. On the 17th February 2000, Friends of the Earth revealed that the UK's leading farm insurance company - NFU Mutual - will not offer farmers insurance against GM pollution. [39]

Insurance companies specializing in biotech include:

· Chubb Insurance Company of Europe, SA (who have been selected as a "BioPurchasing partner" by the US-based Biotechnology Industry Organization) [40]
Chubb Insurance Company of Europe. 106 Fenchurch Street, London EC3 Tel: 0171 - 867 5555

· Gerling Insurance Service Co Ltd [41]
50 Fenchurch Street, London EC3 Tel: 0171 - 696 8099

· Miller Insurance Group [42]
Dawson House, Jewry street, London EC3 Tel: 0171 - 488 2345

· Opus Insurance Service Ltd [43]
5 Devonshire Square, London EC2M 4YD Tel: 0171 - 648 5400

Commodities trading
Commodities are 'real things' like raw materials - unlike finance, which exists mostly as digits on a computer. Genetically modified crops such as soyabeans or maize are traded on the commodities exchanges around the world. They are not just bought and sold on the 'spot market' (a relatively simple, straightforward transaction) - all kinds of futures and options contracts concerning them are handled in the exchanges.

Since they are produced in other countries, GM commodities are not traded on any exchanges in the UK - instead they are primarily handled by the CBT (Chicago Board of Trade). One leading company that is involved in this trading is Cargill Investor Services (CIS) Commodity Group, a subsidiary of the Cargill corporation. [44]
Cargill Investor Services. Cannon Bridge Ho, Dowgate H1, London EC4 Telephone: 020 - 7283 5272

Government subsidies
The government is deeply involved in financing the GM-sector. A key area is in funding basic research [45] in areas which are still a long way from commercialisation, and therefore unlikely to be of direct financial interest to a company. However, the increasing privatisation of universities means that funding for pure, interest-driven research is being cut - and often universities are only supported at all if they do work which is relevant to industry's needs.

Every year the UK government uses approximately £600 million of public money to fund research in biosciences (this includes both agriculture and pharmaceutical research). [46] Mainly it is the Department of Trade and Industry (DTI) that is responsible for this financial support, either directly or through the Biotechnology and Biological Sciences Research Council (BBSRC). [47] Much of this is directed to universities and other research institutions, but a substantial amount goes straight to private companies, through programmes such as SMART, LINK, BIO-WISE, the Enterprise Fund etc. [48] LINK, for example, has a yearly total of £37 million going straight into corporate coffers. [49]

Another more hidden government subsidy is through its funding of the education of almost all the people working in the private biotech companies. Alongside the industrialisation of university research, student courses are being increasingly required to provide training for future careers in industry.

Yet another way the government supports private companies in the biotech sector is through start-up support for new businesses. [50] There are also proposals for tax breaks that will benefit these companies, especially their research and development. [51]

You can find more information on how the government supports biotechnology from the DTI's 'Bioguide', at http://www.dti.gov.uk/bioguide.

Department of Trade and Industry. 1 Victoria Street, London SW1 Tel: 020 - 7215 5000
Biotechnology and Biological Sciences Research Council. Polaris House, North Star Avenue, Swindon, Wilts SN2 1UH Tel: 01793 - 413 271

· Consumer markets for GMOs are collapsing
Few technologies can have been as unpopular at their introduction as GM food. In a 1998 MORI poll, only 22% of those questioned supported the introduction of GM foods. [52]

In spring 1999, all major UK supermarkets announced the removal of GM ingredients from their own-brand products. Through the rest of the year the big food processors (including Unilever, Nestle and Northern Foods) and fast-food outlets (including McDonald's and Pizza Express) followed suit.

The ripple effects of this massive consumer rejection are spreading both internationally and back through the supply chain. Public opposition to GM food is on the rise in the USA, Japan and Australia, and new GM labelling regulations in most countries are likely to lead to a similar pattern being followed to that in Europe. [53]

To date, much of the GM crop harvest has gone to the animal feed market, but now supermarkets are rejecting GM-fed meat too. [54] This spread of concern to the animal feed sector has all happened within about 6 months - and there is every reason to expect it to spread further.

· Farmers don't want to grow GMOs
The American Corn Growers Association has warned its members: "With prices hitting historic lows, the last thing a farmer needs to occur is that both foreign consumers and domestic grain buyers refuse to purchase certain products. In this event, farmers need to think long and hard before planting GMO seeds." [55]

And farmers are actually avoiding GM crops. A survey by ACGA shows that there is a reduction between 12-20% of acreage farmland planted with GMO crops this year, compared to 1999. [56]

Leading distributor Archer Daniels Midland has encouraged its suppliers to segregate GM crops. ADM has since wavered, but its position remains unpredictable. [57] A two-tier grain market is now developing, with GM-free crops selling at a premium, while farmers have to pay higher prices for the GM seed - a double-whammy disincentive. [58]

· Investors lose out
Monsanto, originally the chief cheerleader for agri-biotech, is mourning the death of the 'life sciences' model that it gave birth to. In 1999 Monsanto's share price plunged to $33, from a previous high of $63 - reflecting the error of pinning its flag so firmly to the mast of the GM technology. [59]

The Deutsche Bank reports 'GMOs are dead' and 'Ag biotech: thanks but no thanks' highlight a high-risk and unprofitable future for GM food and crops, and advise investors to get out of the seed sector. [60]

Up to 12% of US banks now refuse to finance GM seed purchases, and a further 28% have strong reservations. [61]

· New regulatory threats
Biotech industry hopes of a free trade agreement on GMOs were dashed this November with the collapse of the World Trade Organisation meeting in Seattle. Instead, the less industry-friendly Montreal Biosafety Protocol will form the basis of international regulation, giving countries more power to reject GM imports on safety and precautionary grounds - and presenting a clear risk to owners of the GM technology.

New quick, cheap GMO test tools are becoming available, leading to an increase in the detection of crop exports that exceed GM content limits. [62] This in turn adds to the pressure on grain elevators to segregate GM crops, reinforcing the two-tier grain market.

Companies face potentially huge legal liabilities arising from GM cross-contamination, health and safety issues and anti-trust suits. The recent lesson from the tobacco industry shows that a strategy of passing on risk to government regulators is not always successful.

· Anti-GMO activism: an unquantifiable risk
GM technology has been eco-activists' number one enemy for over two years. The degree of imagination and determination of the campaigners continues to confound expectations as it spreads further across the supply chain, and the UK can certainly expect another summer of discontent.

Meanwhile, activists across Europe and in the USA and elsewhere are opening a new front, with dozens of ‘decontaminations’ taking place at GM sites across North America. There are some indications that following the massive demonstrations on June 18th in the City of London, financial companies could be the next to be targeted.

· Aventis: the captain on the deck of the sinking ship
The newly-formed Aventis has embraced the failed life sciences model. Monsanto has learnt the hard way, yet Aventis seems unwilling or unable to learn those same lessons.

In fact, on 21st December 1999, the day after trading in Aventis began, the Wall Street Journal said: "Billions of dollars later, that concept of a unified 'life sciences' company - using technology to improve both medicines and foods - has become an affliction itself for Monsanto." [63]

Aventis is carrying out the vast majority of the GMO field trials in the UK - so its profile among protesters will only increase. As its markets continue to collapse, as its investors start to recognise they're backing a loser, as regulators succumb further to public pressure against GMOs and as activists intensify their direct action, Aventis looks sure to follow Monsanto down the pan.