Brazil, March 31, 2005, from CropChoice.com:
In an effort to safeguard royalties from its genetically
modified RoundUp Ready soybeans, U.S. agribusiness giant
Monsanto will seek to continue charging Brazilian farmers
on delivery of soybeans, a company lawyer told Dow Jones
In March, Brazil's President Luiz Inacio Lula da Silva
signed off on a biosafety bill, which is expected to
lead the way to the legalization of the use of Monsanto's
GMO seeds in the 2005-06 season (October-September).
The new law would allow Monsanto to charge royalties
on seed sales as it does in the U.S. However, the company
anticipates some farmers will continue to use seeds
that are produced on the farm or bought illicitly. These
farmers will still be expected to pay on delivery of
their soybean crop.
"We will seek to ensure these farmers respect
Monsanto's intellectual property rights," said
Luiz Henrique do Amaral of the Dannemen Siemens practice,
who is working with Monsanto on the royalty issues.
Brazil's crop law allows farmers to reproduce seeds
for their own use without payment of royalties. However,
Monsanto argues that royalties are guaranteed under
Brazil's patent laws.
"We have had success enforcing this in the south
and expect to continue," said Amaral, referring
to a number of legal victories against farmers contesting
royalties in the south of the country.
Brazilian farmers have been using RoundUp Ready soybeans
smuggled in illicitly from neighboring Argentina over
the past five years. Such was the extent of GMO use
in the south of the country that the government decided
to legalize GMO production and sale in 2002 but didn't
allow seed production.
Faced with the prospect of legal action, farmers in
the southern state of Rio Grande do Sul agreed to pay
royalties at 0.60 Brazilian reals ($1=BRL2.57) per 60-kilogram
bag last year and royalties at 1 percent of revenues
for the current 2004-05 crop and for the 2005-06 crop.
"It is better that we pay as we know that the
trading companies would deduct the royalty charge anyway,"
said Carlos Sperotto, president of the Rio Grande do
Sul farmers federation, in a recent interview.
Monsanto has pressured the major trading firms and
exporters into supporting their plan by threatening
to have their shipments impounded at foreign ports if
it has proof they contain illicit soybeans.
"Anyone who tries to wriggle their way out of
this is going to be broken," said Amaral.
Brazil is the world's No. 2 soybean producer after
the U.S. Somewhere between 21 percent and 26 percent
of Brazil's soybean crop was RoundUp Ready in 2004-05,
according to a survey by the local agricultural consultancy
In Argentina, the government has reacted angrily to
Monsanto's plan to charge royalties on soybean exports
due to the high incidence of illicit use of RoundUp
soy planting, fearing Monsanto's Brazil plan will be
imposed on Argentina.
The Argentine Agricultural Secretariat is attempting
to garner support for rejection of the proposal from
the Brazilian Agriculture Ministry. However, while Agriculture
Minister said it feels royalties should be charged on
seeds, he recently told Dow Jones that the payment of
royalties was a matter for farmers and seed producers
Monsanto received a boost in its attempt to charge
after harvesting when Paraguayan farmers settled in
For the current season, Monsanto hopes to close royalty
accords with producers from the Brazilian states of
Piaui, Bahia and Mato Grosso do Sul and has already
reached an agreement with Santa Catarina producers.
Since seed production was illegal this season, Monsanto
will exclusively charge on delivery of the soybeans.
These states produce little GMO soy. The other state
with a large amount of GMO planting is Parana, the No.
2 soybean state behind Mato Grosso. However, the state
government's anti-GMO stance is making negotiations
difficult there, said Amaral.