SAO PAULO, 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 Newswires Tuesday.
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
"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
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
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 March.
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.