China's refusal to buy corn has farmers suing seed supplier
EXCERPT: [Attorney] Fisher said he's not trying to blame the entire drop in the price of corn on Syngenta. However, he said that agricultural economists he's working with say the company is certainly responsible for about one-third of the drop in price, or a little more than $1 per bushel. But even that amounts to about half a billion dollars in lost farm revenue, just in Ohio.
Genetically modified crop costs many Ohio farmers
Crain’s Cleveland Business, July 12, 2015
* China's refusal to buy corn has farmers suing seed supplier
Thousands of Ohio farmers may have lost hundreds of millions of dollars due to seed from a Swiss company and China's stringent standards for imported grain.
Now, at least some of them appear poised to join farmers from other corn states in suing agricultural giant Syngenta, the Swiss firm that sold them their corn seed. Law firms, including one in Cleveland, are urging farmers to pursue litigation, and so are farm industry advocates.
“We are encouraging farmers to explore their legal options,” said Ohio Farmers Union president Joe Logan, who added he knows of several farmers caught up in the situation, including some who are suing.
Attorney Ryan Fisher, a partner at the Cleveland law firm Lowe Eklund Wakefield Co., is helping to lead the charge in Ohio, and said he's already signed up more than 10 Ohio farmers to bring suit. He said he's filed some suits, but more are on the way.
It's a case perhaps only a farmer could truly appreciate. The Syngenta seed worked fine in terms or producing corn, but selling it was another matter. It was rejected in 2013 and 2014 by China, which had been purchasing more than a billion tons of U.S. corn a year and was one of America's largest customers for the animal feed crop before 2013. China was able to identify certain genetic traits in the corn that indicated it had been genetically modified in ways China deems unsuitable. Corn and other crops often are modified so that they resist herbicides used for weed control, for better yields or to produce other traits attractive to growers.
Before China began rejecting the U.S. crop, corn was selling for about $7.50 a bushel. But after China rejected much of the U.S. corn supply in 2013 and 2014, the price dropped to about half that amount, and corn has been selling for about $3.50 per bushel since about the middle of last year.
Farm advocates and plaintiffs' lawyers say that massive price drop came largely because China dropped out of the market, leaving less demand for U.S. corn. China has increased its own corn production, and it increased the prices that its own corn farmers get — something skeptics say was one reason the nation began rejecting U.S. corn on the basis of its genetic makeup.
Fisher and others, however, say that Syngenta left U.S. farmers open to such tricks by allowing them to plant corn that could be tested and rejected by China, even if its reasons were not what they claimed.
Meanwhile, China's high-profile rejection also caused U.S. corn to be less desirable in other markets as well. After China's move, U.S. corn also was rejected by giant corn processors here, including Archer Daniels Midland and Cargill. That's because many foreign markets will not accept genetically modified crops the way that the U.S. does, or food products made from them.
The situation has severely hurt many Ohio farmers, said Fisher, who has been touring much of Ohio trying to educate farmers and sign them up to sue on a contingency basis.
“The price is still down,” Fisher said, noting that many farmers have lost millions of dollars in potential revenue because of Syngenta's seed.
“We have clients who farm thousands of corn acres,” Fisher said, noting that he's already gotten clients in at least 28 Ohio counties, including Geauga, Lorain, Mahoning, Medina, Portage, Stark and Summit counties.
Fisher declined to name specific clients, however, because he said most farmers don't want the publicity.
Fisher said he figures the losses total about $2 million for every 5,000 acres of corn that's been planted, per year.
That sounds like a lot, until you look at just how much corn Ohio grows — it's a major crop, from northern counties down to the Ohio River.
According to the U.S. Department of Agricultural, there are nearly 25,000 farms in Ohio that grow corn as at least one of their crops. In 2012, the last year for which data was available, they planted 3.6 million acres and harvested 436.8 million bushels of corn, USDA data show.
Fisher said he's not trying to blame the entire drop in the price of corn on Syngenta. However, he said that agricultural economists he's working with say the company is certainly responsible for about one-third of the drop in price, or a little more than $1 per bushel. But even that amounts to about half a billion dollars in lost farm revenue, just in Ohio.
Over a barrel?
Syngenta has denied it did anything wrong. According to a statement the company put out on the matter. After Cargill brought suit against it in Louisiana State Court last year, Syngenta issued a statement on the matter saying it “believes that the lawsuits are without merit” and that it had been in full compliance with regulatory and legal requirements, as well as transparent in developing its corn seed products.
Syngenta's answer is not satisfactory to Logan, though.
“We rely upon the agricultural chemical and seed industry to do the due diligence on this stuff before it goes to market. Unfortunately, those bases were not touched — Syngenta cut some serious corners,” Logan said.
It will likely be some time before the case is resolved. Fisher and other attorneys from across the nation are bringing suit against Syngenta in Minneapolis, where it maintains its U.S. headquarters. That's fine by Fisher, because he said that means the case is likely to be heard by a jury of other farmers, or at least by people with ties to the industry.