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Monsanto exits Argentina soy biz despite boom in beans; one writer has alternate theory about Monsanto's motives

Editor's note: Please see the commentary following this story.

(Thursday, Jan. 29, 2004 -- CropChoice news) -- Hilary Burke, Reuters, 01/18/04:

BUENOS AIRES - Soy's star may be rising in Argentina but Monsanto Co., the U.S. pioneer in agricultural biotechnology, has stopped selling soybean seeds in the world's No. 3 producer, because it can't make a buck.

The company says a huge black market for the genetically modified seeds makes it impossible to recoup its investments. Until that changes, Monsanto Argentina said, it won't sell new-and-improved soy seeds or carry out research to develop new varieties tailored to local conditions.

The move has fueled fears that farmers will lose out on biotech advances and new seed varieties, and that other businesses may pull out of Argentina -- which has been struggling to recover from an economic collapse that sparked the world's biggest debt default in 2002.

"The last thing you want to see in your country is investment in research being cut off. That undermines the future of the whole agriculture industry," said Arturo Vierheller, a former agriculture department official.

Monsanto told Reuters it stopped selling the seeds last month.

GM soybeans, which are popular with farmers because they save money on herbicides, have become Argentina's top crop and biggest source of foreign currency, despite opposition from consumers and environmentalists, especially in Europe, who demand more safety tests.

The European Union effectively banned the growth and importation of biotech foods and crops in 1998, although some GM soybean varieties had already been approved and can still be imported.

The sale of GM soybean seeds is still illegal in Brazil -- the world's No. 2 producer after the United States -- but the government is allowing farmers to plant GM soybeans during this season until a broader law to regulate GM crops is passed.

Officials say Brazilian farmers are planting seeds originally smuggled in from Argentina and Paraguay.

Some 50 percent to 60 percent of all soybean seeds in Argentina are bought on the black market, said Federico Ovejero, a spokesman for Monsanto Argentina.

Seeds from soybeans, like wheat, can be culled from newly planted plants and reused without any significant drop in the yields of soybeans.

Argentine farmers don't have to pay royalties to Monsanto when replanting its GM Roundup Ready seeds due to a widely exploited exemption in the law. And many farmers cull the seeds just to sell them illegally, Ovejero said.

This black market is known as the "bolsa blanca," because farmers and farm-goods stores sell the saved seeds in large white bags that have no labels.

Monsanto Argentina said it will concentrate instead on Roundup Ready corn, which the government has yet to approve, and new varieties of sunflower seeds and sorghum.

Although these crops have been losing ground to soy, their seeds cannot be reused without risking wildly variable yields. That means each year, farmers will have to buy new seeds -- presumably from authorized seed dealers.


"It is a shame for us to be putting on hold such technology as Insect protected soybeans," Monsanto Argentina said, referring to insect-resistant seeds developed especially for Latin America.

Monsanto had about 15 percent market share in the soybean seed business, industry sources say. Now that it has withdrawn, just three major companies remain -- Netherlands-based Nidera and Argentina's Asociados Don Mario and Relmo.

But Monsanto, which is based in St. Louis, Missouri, is still the world's leader in biotech crop development. All other seed companies pay Monsanto to sell soy containing its Roundup Ready gene, designed to resist harm from its top-selling Roundup weed killer.

"The biggest risk is that Argentina loses access not only to biotechnology but to improved varieties generally ... This will mean lower yields and could also increase plants' susceptibility to new diseases," said Gerardo Bartolome, president of the Argentine Association for the Protection of New Plant Varieties.

Farmers could lose up to $78 million a year due to lower yields if they are unable to buy new soybean seed varieties, Bartolome said.

Monsanto does not rule out re-entering the market, however, if government efforts to combat illegal seed sales bear fruit.

The agriculture department said it aims to reduce the number of farmers saving and replanting seeds by more strictly defining an exemption in the law, which was originally meant to protect small farmers.

"I think the government is aware that if this doesn't get solved, the country and the farm sector are in serious trouble, but no concrete action has been taken yet," Bartolome said.

Monsanto in Argentina: Bye bye forever?

Jorge Eduardo Rulli
Grupo de Reflexión Rural, Argentina

Jorge Eduardo Rulli, Grupo de Reflexió Rural (GRR) Argentina, believes the reason Monsanto has decided to pull out of Argentina is to pressure the Kirchner administration into annuling the constitutional right of Argentinean farmers¹ to save their seeds for replanting the following season, thus making the countrys¹s agriculture even more depedent on GM crops. Argentina may soon become a test-bed for other untried and untested varieties, such as GM wheat. He says a radical rethink and redirection of the country¹s food production system, trade relations, and economy is needed.

The furore caused by Monsanto¹s recent withdrawal from Argentina blatantly shows how dependent our country has become on biotech farming solutions. The political establishment, the national media and the general public have reacted to the news with great shock, suspecting that this decision will almost certainly have serious consequences for the future.

GRR, a group which has frequently highlighted the disastrous impact of GM monoculture on environment, asks whether Monsanto has abandoned Argentina for more spurious reasons. Monsanto may well have pulled out of Argentina because it knows that La Roya disease, caused by the Hemileia vastatrix Phakopsora pachyrhizi ( http://www.sagpya.mecon.gov.ar/0-0/index/roya_de_la_soja.PDF ), can wipe out soya crops and is immune to RoundupReady (RR) pesticides. Maybe Monsanto has left because it knows that our soils will soon be infertile due to the ever-increasing quantities of RoundUp herbicides used in our fields. Could Monsanto be blackmailing our government to annul our constitutional right to develop and save our own seeds for replanting in the future?

We must remember, however, that in the beginning Monsanto's profits were never made from royalty payments on their seeds, but was in fact made on the enormous profits from their "star" herbicide RoundUp. In 1996 Felipe Solá, Argentina's former Agricultural Secretary and Governor of Buenos Aries, cleared the way for RR soya to be sold on the market, but on the grounds that Argentinean farmers be exempt from patent duties on Monsanto's products. The Argentinean government and Monsanto were in cahoots from the beginning, both playing a complicit role in the distribution of uncertified seed among Argentinean farmers, usurping and subordinating the FAA (Argentinean Farming Federation) as an accomplice in their global marketing strategy, whilst further entrenching the GM model further across the country.

To this day Monsanto continues to use the same strategy in Brazil. During the 1990s Rio Grande Do Sul's governor, Olivio Dutra of the PT, preened about the province's GE-free status. But behind the scenes Monsanto was giving glyphosate to those farmers that could produce a label proving they were using RR soya. Of course, the GM seeds they carried were illegally purchased from Argentina.

On that occasion Monsanto had no cause to worry about patent infiringment because their overarching aim was to strategically dominate the region with their products, or, in other words, appropriate the food sovereignty of the Rio Grande do Sul's inhabitants. Monsanto¹s agents bribed Argentinean farmers and, for a while at least, subsidised national soya production. For this reason soya was and continues to be a profitable business for some Argentinean farmers.

However, US Farmers complained about unfair competition. Argentinean farmers did not pay Monsanto for their seeds and, in Argentina, glyphosate cost one third of its US equivalent. Nevertheless, when the the catastrophic ecological impact of this agricultural system began to surface, Monsanto, along with the Argentinean government, looked the other way, indifferent to the concerns raised. This came as no surprise. After all, Argentina is Monsanto¹s territory; our country is their laboratory where the poor and the hungry are fed on the free handouts of GM soya.

Of course, many more elements come into play. Multinationals have always had multiple and highly complex marketing strategies. Now they have us hooked on their drug, Monsanto wants to start profiting from it by making the farmer a tenant of an extraneous seed. Nevertheless, this strategy could prove to be difficult. Monsanto knows that controlling a monogamous seed like soya is impossible because the farmer can develop it by traditional breeding techniques. Because of the weakness of the State, government could find it problematic to outlaw the farmers' tradition of swapping seeds among themselves.

Monsanto will be now be keen to exploit the market for their GM corn variety, through sorghums and other oleaginous RR crops, which the farmer will have to buy afresh each year.

Argentina continues on a path that somewhat resembles that of the well-known sci-fi film, The Matrix. Argentina is a "fodder Republic", a bio-tech laboratory. Unless Argentina radically changes course, we will continue to move, inexorably, towards significant environmental catastrophe.

Desertification, flash-flooding, rural depopulation, the death of rural cultures, and deforestation will go on being the order of the day.

Engulfing the international market with GM soya will only serve to drive down international prices, which will do nothing to solve Argentina's debt burden. We will have no other option but to continue along the path of costly external borrowing to solve our economic problems.

We believe that now is the time for big and courageous decisions. We need to be capable of contemplating a different Argentina, where we can mark our own territory and repopulate our countryside. We need to contemplate an Argentina that is capable of resuming and building on its own traditional seed production, whilst assuring and respecting the food sovereignty of millions of Argentineans, who today lack a safe and healthy diet.

Argentina needs to be able to renegotiate its external debt with sufficient dignity so as to not tie itself to agro-export models that are solely justified by the profit-driven motives of the IFIs and international bank syndicates. Our petroleum resources need to be recovered, so we can introduce more productive industrial projects and stop paying exhorbitant international petroleum prices. Moreoever, Argentina should actively pursue stronger economic and cultural links with its Latin American partners. In short, this is our proposal and our struggle. Therefore, due to the inertia of the majority of government representatives, we will continue to work with the people, the unemployed, farmers and students, to keep our dreams of happiness and national sovereignty alive for the future.

Jorge Eduardo Rulli
GRR Grupo de Reflexión Rural
21 de enero de 2004