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Monsanto wants to collect royalties on imported transgenic South American soybeans

(Friday, March 26, 2004 -- CropChoice news) -- Richard Cowan, Reuters, 03/24/04: WASHINGTON - Biotech crop leader Monsanto Co. , hoping to capitalize on an expected spurt in soy exports from Brazil to the United States, will try to collect royalties if vessels are found carrying soy or soymeal grown from pirated biotech seeds, according to Monsanto officials.

For years, Monsanto has complained that South American farmers were planting soybeans using the company's genetically modified Roundup Ready seeds without paying the required royalties.

Asked by Reuters on Wednesday whether soymeal or other soy imports from Brazil or Argentina would be targeted for inspection at ports by U.S. Customs officials, Monsanto spokeswoman Lori Fisher said, "We have a number of options available and that would be one of them."

Fisher characterized the situation as "hypothetical" for now and downplayed the likelihood of shipments from as far south as Argentina.

Another Monsanto official was more definitive. "If they don't have a license (for Roundup Ready soybeans) when the ship arrives at port, we'll ask to see their documentation" that the soymeal or soybeans are biotech-free, spokeswoman Janice Armstrong said.

"If the documents are not there, we would ask to test the shipment and if found positive (for Roundup Ready), Monsanto would charge them a royalty," she added.

Roundup Ready soybeans are engineered to withstand the effects of a herbicide manufactured by Monsanto.

Monsanto's biotech soybeans are widely used in the United States, the world's leading producer, where about 80 percent of soybeans crops were planted with Roundup Ready seeds.

Brazil is the second largest producer and a fast-growing competitor for the United States in world soy markets.

U.S. soy production fell 12 percent last year due to drought, and end-season stockpiles on Sept. 1 are expected to fall to a 27-year low of 125 million bushels, less than three weeks' supply. Chicago Board of Trade soy futures hit 15-year highs on Monday, underscoring world demand for the oilseed processed into edible oil and high-protein meal for feed.

U.S. Department of Agriculture analysts currently project imports of about 430,000 tonnes of South American soymeal to sustain U.S. livestock operations. Industry officials said imports of whole soybeans from Brazil were also a possibility.

Still unclear is whether a royalty payment on Brazilian product, coupled with possible delays due to testing, could discourage the trade.

In January, a deal was announced between Monsanto and farmers in Brazil's Rio Grande do Sul and Santa Catarina states for payment of royalties of $7 per tonne to the company.

A U.S. soybean industry source, who asked not to be identified, said the continued growth of pirated Roundup Ready soybean seed in Brazil meant that some shipments to the United States could include non-licensed product.

The source also said Monsanto's pursuit of the royalties would not just be to capture those revenues.

One of Monsanto's fears, he said, was that American farmers would be be irked if competing Brazilian farmers were selling their goods in the United States and getting the biotechnology for free. Left unchecked, that could encourage U.S. farmers to try to skirt the royalties, the source said.

Monsanto officials declined to say whether royalties collected at U.S. ports would be higher than the $7 per tonne charged in Brazil.

Sue Challis, a U.S. Customs spokeswoman, said Monsanto had not yet contacted the agency about targeting Brazilian soy shipments for special inspections.

Source: http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=4649114