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Grassley calling for soybean probe

(Sunday, Sept. 7, 2003 -- CropChoice news) -- High Plains Journal, 09/05/03: DES MOINES (DTN) -- Although a report on the Brazilian government's support of soybean farmers did not show violations of World Trade Organization Rules, Sen. Charles Grassley, R-Iowa, told reporters today it did show that Brazilian farmers are illegally planting genetically modified soybeans, and that harms US soybean producers.

The report, put together by USDA's Economic Research Service and Foreign Ag Service, was released Tuesday. The investigation was triggered by an earlier request from Grassley.

Grassley said he has asked USDA to dig further into the situation and USDA will be doing some followup research based on further questions he posed.

Ten to 20 percent of Brazil's soybeans are genetically modified, the report said. The Brazilian government denies that genetically modified soybeans are grown in that country.

"US farmers have to pay a licensing fee to raise GMO soybeans, yet Brazil farmers don't because the government doesn't report the production of GMO's," said Grassley. "This also may be a question for Monsanto, the US seed company that produces the GMO seed."

The USDA report indicated that while the battle over the approval and use of biotech products in Brazil has been on hold for the past five years, Brazilian producers in the southern state of Rio Grande do Sul are smuggling GMO seeds from Argentina. Planting Roundup Ready soybeans without paying royalty fees and devaluing its currency may help Brazil jump ahead of the US in soybean production, the report said. In the last five years, the report said, Brazil has increased its soybean production by 66 percent. The report speculated that Brazilian soybean production could catch up to US levels in the next five years, reaching a production area of 250 million acres. Last year, Brazil planted 40 million acres of soybeans.

Other actions by the Brazilian government, although not against WTO rules, have helped their domestic soy industry, the report said. Exempting exports of raw soybeans from a 13-percent tax in 1996 "greatly contributed to the competitiveness of Brazilian agribusiness," the report said.

Although the report said Brazil is behind schedule in notifying the WTO of domestic subsidies and improvement is needed, it found no known violation of WTO rules. Grassley had asked USDA to find out which countries are investing in Brazilian soybean production. USDA attributed the increase in Brazilian soy production in part to private investment in land, both by individuals and firms. However, "we are unaware of any foreign government investment in Brazilian soybean production," USDA said in the report.