The Roundup case could have hidden consequences

The award by a Californian court of $289 million in damages to Dewayne Johnson, a groundsman who claimed the weedkiller Roundup caused his cancer, has the makings of what investment pessimists call a ‘black swan’: an unforeseen event with extreme consequences. Roundup is made by Monsanto, the US company that leads the world in genetic modification of seeds and is regarded by the green movement as Satan. Monsanto was recently acquired by the German pharma giant Bayer for $66 billion; Bayer’s shares plunged on news of the Californian award and — with thousands of similar claims pending — could fall a lot further if the jury’s decision is not overturned.

But this story is not just about Bayer and whether it did sufficient due diligence before buying Monsanto. Roundup is used on a massive scale in global agriculture, in combination with Monsanto’s Roundup Ready arable crop seeds, which are modified to resist the weedkiller while the weeds around them die.