Brazil Soy Exporters to Police Monsanto Biotech Seeds
At least one soybean exporter in Brazil has agreed with Monsanto to collect royalties from farmers who planted the company's genetically engineered seeds, industry sources have told the news agency Reuters. The landmark deal, already finalized by a firm that declined to be identified, highlights an increasingly complex relationship between global grain merchants and biotech firms.
Other bigger merchants like ADM and Bunge will finalize agreements soon, the sources said, resolving a months-long dispute that had threatened to disrupt as much as a quarter of all soy shipments from the world's second-largest grower.
The trading firms are wary of serving as biotechnology police in Brazil, a role they have not had to play in the US because patents are protected by laws that do not allow farmers to reuse seeds year after year there.
In Brazil, where genetically modified seeds have only been legal since 2005, reusing seeds is more common and it is easier for farmers to skip out on Monsanto's fees after buying the seeds the first season.
Soy-crushing group Abiove, which represents global firms including ADM, Bunge, Cargill and Louis Dreyfus , spent months negotiating to ensure companies are compensated for collecting and monitoring payments on Monsanto's new Intacta RR2 Pro strain of genetically modified soy.
While some merchants have been collecting royalties on Monsanto's first-generation RoundupReady soy seeds in Brazil for as long as a decade, that arrangement is said to have been a source of deep frustration as it required merchants to accept legal liability for their shipments, without any compensation from Monsanto.
The industry has been determined to avoid a similar arrangement for Intacta. First planted in South America last year, the seed includes a gene to ward off pests.
Brazil is Monsanto's second-largest market, making up about a tenth of its $15 billion in net sales last year.
Monsanto has blamed a downturn in royalty payments on its mainstay Roundup Ready products for a drop in net sales of soybean seeds last year.
