Monsanto puts $40m Argentine investment on hold

By Elizabeth Johnson

SAO PAULO, Brazil, October 29, 2003 -- CropChoice news--Chemical News & Intelligence, 10/17/03: Monsanto said Friday it will hold off on a $ 40m (Euro35m) Argentine investment due to a "lack of a clear midterm strategy in the country and lack of adequate intellectual property protection policy."

A spokesperson for Monsanto Argentina told CNI today that the company hopes to resume investing in Argentina, but to do so it "needs fair conditions to compete on an equal footing with the other players."

Monsanto has invested $ 185m in Argentina since 1998. Of that total, $136m was used to build a new glyphosate plant in Zarate, in the province of Buenos Aires. As a result of the Argentine economic crisis, Monsanto's revenues in Argentina fell by nearly 30% last year.

But, according to the company spokesperson, 2003 revenues will show improvements and should reach $ 410m. While Argentina is experiencing an agricultural boom, Monsanto has said that the number of farmers buying certified seeds has declined significantly in recent years, reducing royalties paid to Monsanto.

For soy alone, the sale of certified seeds has declined from 50% of soy seeds to 20%. According to the Monsanto spokesperson, this situation prevents companies focused on research and development such as Monsanto from investing in new technology.

Monsanto also said that there is a bill in the Argentine Congress that could help improve the situation. In addition, the local seed industry, through the Argentine Association for Seed Varieties Protection (ARPOV), is actively working with the Argentine government to assure that growers use certified seed and eliminate so-called "brown bagging," the illegal sale of genetically modified (GM) seeds that accounts for an estimated 60% of the Roundup Ready soy planted in Argentina.

Monsanto is analysing the possibility of selling Roundup Ready corn in Argentina as well. The company has completed an environmental impact study and is waiting for Argentina's Foreign Market Commission to analyse the commercial impact of GM corn. Monsanto Argentina is a wholly-owned subsidiary of St. Louis, Missouri-based Monsanto.