Seeds of dispute

Wednesday February 22, 2006

Tensions between Monsanto and Argentina are escalating as the US biotech company steps up its efforts to win back control over booming Latin American soy production.
Brazil and Argentina are, after the US, the two largest soy producers in the world. Brazilian farmers planted 9.4m hectares of GM soy last year, an increase of 88% on 2004.

But Monsanto's primary concern is Argentina, where 98% of soy production is GM. Almost all of this is based on genetic technology developed by the Missouri-based seed giant and licensed to local manufacturers.

It is the story of a love spurned. When Monsanto introduced GM technology in Argentina, 10 years ago, the country's farmers lapped it up. Cultivation of herbicide-resistant soybeans has since grown from six million hectares in 1997 to present levels of around 16m hectares - more than half the country's total agricultural land.
The problem facing Monsanto is how to keep riding Argentina's soy expansion, estimated to hit a record 42m tonnes for the 2005/2006 season.

Initially, most of Monsanto's profits were generated through the sale of its Roundup herbicide, which kills weeds but not GM crops.

When Monsanto's worldwide patent on the herbicide technology came to an end in 2000, cheaper equivalents began to enter the market and it had to look elsewhere for returns.

The answer came in the shape of royalties on the sale of its Roundup Ready soy seeds. This is a model Monsanto employs successfully in the US, adding an additional "technology fee" to seed price to cover the use of its intellectual property.

Argentinian farmers, however, are less keen than their US counterparts to stump up the surcharge. Their position is strengthened by Argentina's consistent refusal to register Monsanto's Roundup Ready patent. In 2001, the issue got as far as the country's supreme court. For once, Monsanto lost.

"Argentinian local seed companies are making their own seeds for a lower price", explains Juan López, international coordinator of the Friends of the Earth GM campaign.

"Farmers are not ready to pay [the] extra percentage for the technology royalty, because they can get it from the black market. They just don't need Monsanto in Argentina."

When Monsanto first entered the Argentinian market, it issued national seed producers with technology transfer agreements to develop its Roundup Ready soy strain. It is seeds from these companies that are finding their way on to the black market, now estimated to represent nearly one-third of all seed sales.

The practice of farmers storing seeds from one harvest to the next also dents Monsanto's profits.

Monsanto could not be contacted for comment on its strategy to regain control of its property rights in Argentina. However, recent developments suggest the US company is pursuing a two-pronged plan.

According to the Monsanto website, it is now concentrating on claiming royalties when farmers come to sell their soy crop, rather than when they buy the GM soy seeds.

Last year, Monsanto wrote a letter to all exporters and importers explaining its intention to charge a fee of between $15 (£8.60) and $18.75 on every tonne of Argentinian soy produced with its Roundup Ready technology. Argentinian soy currently trades at around $178 a tonne.

"[Monsanto] reserves the right to begin legal actions, on the assumption of uncovering imports from Latin America of unlicensed Roundup Ready soy, in countries where the said technology is protected by intellectual property rights," a statement by the company reads.

In keeping with the strategy, a ship carrying 5,900 tonnes of GM soy grain, worth an estimated $1m, was detained in Liverpool earlier this month. Monsanto tested the shipment for Roundup Ready technology in the prelude to a lawsuit.

Over the past six months, Monsanto has also filed cases for patent infringement in Denmark, the Netherlands and Spain.

If Monsanto is successful, campaigners fear, the company could claim part-ownership rights on any product containing the Roundup Ready gene. Given that most highly processed foods contain an element of soy, such a list could potentially include everything from European margarine to Chinese soy sauce.

"In the case of Argentina, Monsanto is really challenging its rights over processed food, not just over the seeds. This is something new. It's never happened before," Mr López warns.

The news coincides with a ruling by the World Trade Organisation earlier this month against EU import restrictions on GM crops and food.

The second string to the company's strategy is to try to block farmers from storing seeds.

It is collaborating with the international biotech industry to remove a de facto UN moratorium currently in place against genetic use restriction technologies (Gurts).

Under these so-called "terminator" technologies, plants are genetically programmed to become infertile after a set period of time.

"Monsanto is desperate to recapture royalties from its GM seeds, and terminator is the perfect solution because it would be able to biologically ensure that farmers have to return to the market every year," says Lucy Sharratt, coordinator of the Ban Terminator campaign.

Following industry lobbying, the UN Convention on Biological Diversity is due to consider case-by-case testing of terminator technologies in its annual meeting in Brazil on March 20.

The stakes are high. As Ms Sharratt explains: "Instead of suing farmers - which is what Monsanto is doing in North America - for saving seed, it will be able to take a technical solution to what is otherwise a huge financial problem for Monsanto and threatens its future use of genetic engineering."

· Oliver Balch is a Buenos Aires-based journalist specialising in sustainable development and Latin American affairs Email: o_balch@hotmail.com