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Monsanto reaps some anger with hard line on reusing seed

(Monday, May 12, 2003 -- CropChoice news) -- By Peter Shinkle, St. Louis Post-Dispatch: A farmer secretly gathers seed, glancing nervously over his shoulder andwondering whether a neighbor might dial the anonymous tip hot line.

A corporation sends out spies and goes out of its way to make examples out of growers it catches violating patents.

A defiant farm owner makes a stand and is sentenced to prison.

It's a hardball battle out there between an uncounted slice of farmersand Monsanto Co., the agricultural giant based in Creve Coeur that assembleda staff of 75 and a budget of $10 million a year to win it.

For years, Monsanto fought environmentalists over potential effectsof its genetically modified seed. Now, it's fighting activists who embracethe seed but not the contract that comes with it.

Farmers generally find the seed easier and cheaper to use. But someresent a purchase contract that says they cannot reuse seed from the cropsthey grow.

More and more, their differences are ending up in court. Often, that'sfederal court in St. Louis. In fact, farmers agree to the court venue, convenientto Monsanto, when they sign the agreement.

Monsanto has not yet lost a single fight. But there are still some farmers battling.

Save Our Seed

Mitchell Scruggs hardly fits the profile of an activist.

A 53-year-old Mississippian, Scruggs runs a cotton gin and owns thebiggest farm in three counties surrounding Tupelo. Until a few years ago,he had never protested over civil rights, the environment or anything else.

That changed when he found that Monsanto forbids those using its productfrom the age-old practice of saving seeds from one crop to plant the next.The licensing agreement says they must buy new seed each year.

Now Scruggs is fighting in the courts, by word of mouth and just aboutany way he can. He helped form Save Our Seed, a farmers' rights group thatadvocates seed recovery as it has been done for generations.

"I'm opposed to what Monsanto's about," Scruggs said in an interviewlast week. "They're raping farm communities and breaking farmers, becausefarmers do not have any other place to go to get this planting seed."

The manufacturer says it is entitled to protect the value of its "intellectualproperty" and to recover research costs. It says those who violate the licensescommit "seed piracy."

Scruggs, whose family has farmed in Mississippi for more than a century,is among 73 farmers sued by Monsanto in the past five years on civil claimsof patent violations. He countersued, saying that the patents are invalidand that Monsanto enforces a monopoly over the seed industry. The case ispending in U.S. District Court in Tupelo.

But many farmers have accepted Monsanto's agreements as legitimate.

Neal Bredehoeft, who works the land near Alma, Mo., and is a directorof the American Soybean Association, said his family saved soybean seedsfor decades but stopped to use Monsanto's.

"Monsanto has to have the dollars there to do some research," he said."I believe they are taking the technology fee and doing research to makea better bean."

The company touts a string of victories in the courts, including a $2.5 million settlement with an Arkansas farmer.

Farmers also are turning to the courts. Some have filed class-actionlawsuits asserting Monsanto is violating anti-trust laws by gaining controlof seed markets. Monsanto denies it.

A farming revolution

Saving seed has long been an elemental part of farming, although somefarmers favored the practice more than others. Many have bought seed forgenerations.

In the 1990s, Monsanto began marketing its patented seeds with geneticmodifications. They included soybean and cotton seeds engineered for immunityto Monsanto's own herbicide, known as Roundup.

The new technology meant that farmers could simply spray Roundup tokill weeds without taking labor-intensive measures to avoid also killingtheir crops.

Monsanto says its Roundup Ready seeds make for better crops with less use of chemicals and less work.

Bredehoeft said he will use Roundup Ready seeds for all 1,000 acres of soybeans he grows about 65 miles east of Kansas City.

"The Roundup Ready seeds have really improved the economics of soybean farming," he said.

It's so popular that about 80 percent of the 73 million acres of soybeansto be planted in 2003 in the United States are expected to be herbicide-resistant,according to the U.S. Department of Agriculture.

Monsanto says its technology accounts for virtually all of the herbicide-resistant soybean seeds on the market.

Farmers are allowed to take seeds produced from the crops and use themto feed pigs or crush them as fertilizer for a flower bed. But second-generationseeds cannot legally be planted, said Scott Baucum, lead manager for intellectualproperty stewardship at Monsanto.

Baucum, who grew up saving seed on his family's cotton farm in westernTexas, says Monsanto's product is so good that it's worth buying fresh everyyear.

A bitter harvest

Some farmers don't see it that way. One of them is Kem Ralph, 47, whoraises soybeans and cotton with his brother on a farm in Tipton County, Tenn.,40 miles northeast of Memphis.

In 1999, Ralph decided to help Dewayne Hendrix, a longtime friend and fellow farmer.

When they were young, the two men had started out driving trucks forbig-time farmers like Lloyd Bentsen, father of the former U.S. senator fromTexas. They had finally gotten their own farms, and by the late 1990s, theywere each planting thousands of acres near Covington, Tenn.

But in 1999, Hendrix was struggling financially, Ralph would later testify.

Hendrix had used Monsanto's engineered cotton seed in 1999, and insteadof complying with the license, he saved a truckload of seed from his ginnedcotton and took it to a company in Kennett, Mo., for processing, federalprosecutors say.

There, lint was removed from the seed, and it was placed in bags for the next growing season.

It was a risky step. Monsanto has inspectors who visit farmers' fields,and seed handlers to check for crops grown from saved seed. Monsanto alsohas a toll-free hot line to encourage anonymous tips.

The company says it is unfair that some farmers honor the agreement and others don't. Many farmers share that view.

In December 1999, Ralph arranged for documents to be sent to the Kennettcompany indicating that the seed belonged to him, not Hendrix, accordingto a plea agreement Ralph signed in February. Hendrix's brother picked upthe seed and signed a receipt indicating it was Ralph's.

Monsanto catches on

Monsanto began investigating Ralph's handling of Monsanto seed. In January2000, it sued in federal court claiming that testing discovered illicit RoundupReady seeds in Ralph's fields in 1999.

At Monsanto's request, U.S. District Judge Rodney Sippel ordered Ralph not to move his crops or seed.

But on March 2, 2000, he took a truckload of cotton seed from his farmand dumped it into a gravel pit. With the help of his brother and some farmworkers, he used tires and diesel fuel to start a fire that burned for twodays.

When Ralph told his lawyer, Lou Leonatti of Mexico., Mo., about theburning, Leonatti reported it to Monsanto's lawyers. A few days later, Monsantoinvestigators took samples at the burn site.

On March 24, 2000, Ralph unburdened himself, admitting he burned an estimated 900 bags of saved seed.

His actions would cost him. Judge Sippel ordered Ralph to pay Monsantoabout $100,000. Sippel also threw out Ralph's defense, which included a claimthat he had never signed a Monsanto licensing agreement.

Under Sippel's ruling, Ralph was automatically found to have violatedthe agreement. A jury considered only how much he would have to pay Monsantofor using the seed improperly, and it settled on $1.7 million.

In February 2003, Ralph pleaded guilty in St. Louis to conspiring tocommit mail fraud when he helped Hendrix hide the saved seed. His plea includeda finding that Ralph had obstructed justice by burning the seed.

On Wednesday, Ralph was sentenced to eight months in prison and ordered to pay the company $165,469 more.

The enforcers

Monsanto has built a whole department to enforce its seed patents andlicensing agreements. It has 75 employees and an annual budget of $10 million,said spokeswoman Shannon Troughton.

The company tries to settle with farmers before taking them all theway to court, but that doesn't always work out, Troughton said. It oftenturns to Husch & Eppenberger, the big St. Louis law firm that handlesmuch of the company's legal work.

Of the 73 suits filed against farmers, 30 of them are in federal courtin St. Louis because of a provision in the licensing agreements that givesMonsanto the choice of having them heard here. The other cases are spreadover 19 states ranging from Nebraska, east to New Jersey, and from Michigan,south to Louisiana.

Monsanto also distributes information to farmers and seed companiesabout its court victories, including five cases that have gone to trial.

A "Seed Piracy Update" brochure published by the company lists the Ralphcase as well as judgments of $780,000 against farmer Homan McFarling of Mississippiand $593,000 against Bill "Dude" Trantham of western Tennessee.

When Ralph appeared in federal court for sentencing Wednesday, Baucum,Monsanto's lead manager for intellectual property stewardship, told the judgethat others would make decisions "according to the results here today."

Paul D'Agrossa, attorney for Ralph, told the judge that Monsanto hasdistributed information about his client in an effort to damage his reputationand "destroy his family."

Emerging from court after Judge Richard Webber sentenced Ralph, D'Agrossasaid: "I don't believe justice is served by sending Mr. Ralph to jail forone day. As far as I'm concerned, it's a pound of flesh Monsanto has beenafter for a long time."

Baucum said later: "We have not been focused on doing anything to Mr. Ralph. We have been focused on defending our interests."

Some critics contend that Monsanto has gone too far.

Missouri state Rep. Wes Shoemyer, a Democrat from the rural northeasternpart of the state, complained that the company's commercials encourage farmersto inform anonymously on each other.

"They put a rift in the social fabric of America that I absolutely abhor:Look at your neighbor as someone to turn in," he said.

Shoemyer, a farmer, is the sponsor of legislation that would permitMissouri farmers to save seed if they pay a royalty to the patent owner.The bill passed the House Agriculture Committee 22-0 recently, and Shoemyersaid he hopes to advance it as an amendment on the House floor in the closingdays of the legislative session this week.

Farmers turn to law

Scruggs, the Mississippi farmer, is using the courts to fight back.He hired James Robertson, a lawyer who served nine years as a justice onthe Mississippi Supreme Court.

Scruggs denies that he saved Monsanto seed and also contends that Monsanto's patents are invalid and monopolistic.

Peter Carstensen, a University of Wisconsin law professor hired as anexpert for Scruggs, said Monsanto has put an anti-competitive restraint onfarmers.

The company denies it.

Last fall, Monsanto sought to remove the dispute over one of its patentsfrom Scruggs' trial, saying it would simplify the litigation. The judge refusedthe request, and Scruggs says he sees a weakness.

"I don't think any of the patents are good, and I'm ready to go to court, the quicker the better," he said.

But attorney Clifford Cole, who represented Arkansas farmer Ray Dawson,says anyone should be cautious before taking on Monsanto.

Dawson, who once farmed 50,000 acres in three states, used to goad thecompany by wearing a hat bearing the words, "Monsanto Folds, Dawson Farms."

But in the end, Dawson filed for bankruptcy and later settled with Monsantofor $2.5 million, though the settlement ultimately permitted him to pay onlyabout $200,000, Cole said.

"They were going to beat our brains out," Cole said of Monsanto's attorneys."These old boys, they're good. They've got the tools, they've got the lawon their side, and they've got the money to back 'em."