1. Monsanto meeting resistance to royalties for Intacta soybeans
2. Brazil, Monsanto and a dispute over royalties worth 6.2 billion euros
3. Monsanto faces $7.5 billion payout to Brazilian farmers
NOTE: Since GM soy was legalised for cultivation in Brazil, Monsanto has charged Brazilian farmers 2 percent of their sales of Roundup Ready soybeans, which accounts for over 80 per cent of the country's soybean crop. Monsanto is also careful to test even those soybean sold as non-GM, and if they turn out to be Roundup Ready, it charges the farmers a higher trait fee – 3 percent of their sales.
In April this year, a judge in Rio Grande do Sul ruled in favour of the producers and ordered Monsanto to return royalties paid since 2004 or a minimum of $2 billion.
Monsanto appealed and the dispute escalated to the Supreme Court of Brazil. Monsanto objected that the dispute should be handled as a unique case between a specific farmers' association and the company – in other words, the ruling should not universally apply across Brazil. This objection was rejected by the Supreme Court on June 12 (see item 3, below).
So now up to 354 farmers unions involving about 5 million soy growers could potentially join the dispute, meaning that Monsanto could face a royalties payback of a massive 7.5 billion USD.
Monsanto also objected that the royalties payment ruling should be suspended until the dispute is finally settled in the Supreme Court. The court upheld this objection and for the time being, farmers will continue to pay royalties to Monsanto.
At the heart of the dispute is that Monsanto makes farmers pay royalties not only when they buy the seed but also when they deliver their harvest to the silo. If the farmer declares that his crop is GM, Monsanto demands its royalty payment either in money or by confiscating a proportion of the farmer's harvest as the royalty. This has infuriated farmers, who point out that a good harvest can be due to favourable weather or their own good farming practices – factors that have nothing to do with Monsanto's GM traits.
If the farmer declares his crop to be non-GM, Monsanto does a quick PCR GMO test. If it claims the result is positive, it charges the farmer a 3% royalty – higher than the 2% charged to farmers who declare their crop to be GM.
Monsanto added insult to injury in April this year when it arbitrarily hiked royalty payments on its new GM soy variety, RRpro Intacta, to five times the level of royalties on its predecessor, RR1 (item 1, below). Monsanto's rationale is that RRpro will deliver higher yields and require less pesticides (RRpro contains a Bt insecticidal trait as well as a herbicide-tolerant trait). But agribusiness analyst Daniel Coelho Barbosa points out (item 2, below) that this happy result is by no means certain, especially as Monsanto is already telling farmers that they should plant a 20% refuge of non-Bt soy to prevent the Bt technology from failing in 5-6 years due to Bt-resistant pests.
And while Monsanto's advice about the refuge may protect it from legal liability when its Bt technology fails, the company must know that this advice is unlikely to be heeded by soy producers, who use mechanised planting machines designed to seed vast acreages and are not known for their tendency to plant 'sacrifice' crops to keep pests happy or indeed to read the small print on Monsanto product leaflets.
1. Monsanto Meeting Resistance to Royalties for Intacta Soybeans
Soybean & Corn Advisor
April 10, 2012
Monsanto is set to start selling Intacta RRpro soybean varieties to Brazilian farmers for planting during the 2012/13 growing season, but the amount of royalities they will be allowed to charge is currently in dispute and in the Brazilian court system. According to Monsanto, in addition to being higher yielding and tolerant to Roundup herbicide, the new soybean varieties use the Bt gene to make the plant resistant to most of the leaf eating worms in Brazil.
Monsanto has calculated that the Intacta RRpro soybeans will result in a yield boost of 6 sacks per hectare or 5.2 bu/ac [bushels/acre] in addition to allowing the farmers to avoid applying three insecticide applications per growing season. By their calculations, this will result in an increased income of R$ 346 per hectare. They want to capture 33% of that increase and they propose charging the farmers R$ 115 per hectare for the use of the technology.
Farmers are complaining vehemently that this is five times more than the royalties they are already paying for Roundup Ready soybeans which is R$ 22 per hectare. They are willing to pay an increased royalty for the new technology, but they want to pay it up front when they purchase the seed not on the perceived increase in production that Monsanto says will occur by using the new varieties.
Farm organizations in Rio Grande do Sul have gone to court challenging the method of payment proposed by Monsanto. They feel it is unjust to charge the royalty based on a perceived increase in production because the eventual production is determined by many things such as weather, fertility, production practices, etc., and not just the type of soybeans a farmer plants.
With this new technology, a farmer will also be required to plant 20% of his acreage to non-Intacta RRpro soybean varieties as a refuge. A refuge must be planted in order to help avoid the worms from developing a resistance to the Bt gene. If a refuge is not planted, the worms can develop a tolerance to the Bt technology in as little as five or six years.
The use of Intacta RRpro soybeans must also still be approved by the main purchasers of Brazil's soybeans which are China and the Europeans.
2. Brazil, Monsanto and a dispute over royalties worth 6.2 billion euros
Daniel Coelho Barbosa
MediaInfo by TraceConsult
18 April 2012
On 4 April 2012, the courts of Brazil's southern-most state of Rio Grande do Sul, in the way of a preliminary injunction, suspended the collection of royalties on GMO soy seeds by Monsanto.
The ruling by Judge Giovanni Conti also provides for the reimbursement of license fees paid (so-called royalties) since the harvest campaign 2003/2004, as the business practices of seed multinationals Monsanto violate the rules of the Brazilian Cultivars Act (No. 9.456/97).
According to Neri Perin, the attorney of the farmers associations of Passo Fundo, Santiago and Sertao, who filed a class action suit in 2009, the claim lodged may lead to an advantage for up to five million farmers in Brazil and could mean for them a reimbursement of about 6.2 billion euros.
The Brazilian soybean farmers question the regulations prohibiting them from withholding seed for a renewed planting (after a first planting for which they have paid royalties) and from giving or exchanging seed under public programs.
Monsanto has been accused of unlawful and abusive collection of royalties on seed and soybeans of the Roundup Ready (RR) cultivar. Until the ruling, royalties were required not only for the entire soybean crop, but also for soybean seed, that was retained from the previous harvest.
The farmers recognize that Monsanto is entitled to royalties when they buy soybean seed, but they demand the right to plant again the GM soybean seed they purchased and to sell this production, as food or feed, without another payment of license fees.
As subsequent joint plaintiffs have arisen FETAG, the organization of farm workers from Rio Grande do Sul, and the farmers associations of the towns of Giruá and Arvorezinha.
Although Monsanto can still go to appeal, the judicial decision was received with relief by the soy producers. The President of the regional association of soy producers (APROSOJA/RS) in Rio Grande do Sul, Ireneu Orth holds a 2 percent fee, or about 9.20 euros per hectare, to be illegal.
Monsanto wants to raise license fees
The suspension of the collection of license fees has become even more important this year because Monsanto intends, with the introduction of the variety "Intacta RRpro" scheduled for planting in 2012/2013, to increase the fees to 48 euros per hectare. Greater productivity, protection against caterpillars as well as glyphosate tolerance are the alleged benefits of the new RRpro variety that, according to the company, justify the increase in license fees. But an assumed increase in productivity cannot be predicted or guaranteed.
The introduction of "Intacta RRpro" for the 2012/2013 planting season set off a tug of war between Monsanto and farmers' associations concerning the collection of royalties for the new product that are five times higher than for its predecessor ("Roundup Ready" or "RR1").
The increase in license fees refers to 33 percent of the additional income of 145 euros per hectare calculated by Monsanto. The Company expects that these additional profits are justifiable by the reduction of three pesticide applications per season and a yield increase of an average of 240 kgs per hectare.
The Vice President of Monsanto Brazil, Rodrigo Santos, claims that producers can trust this new variety with Bt technology, and is confident: "This product is revolutionary and offers many advantages. The price for the use justified," says Santos. Bt technology enables the plants to defend themselves against caterpillars.
According to Glauber Silveira, director and former president of APROSOJA Brasil, talks on license fees are currently being held, but no radical changes can be expected. He confirmed, however, that this type of licensing must be reviewed. "We should always determine the amount of the royalties based on the actual profits and not define them on the basis of earnings forecasts," he says.
Despite all the promises the new Monsanto product raises doubts in regards to its effectiveness even before it is launched: The manufacturer states that on every hectare of arable land where RRpro is to be planted, also 20% of another, non”Bt soybean variety, must be sown. The company explains that the resistance of the soybean plants can be dissipated in five or six years if the new procedure is not applied.
"The measure aims at preserving the benefits of biotechnology. Otherwise, the species may weaken and lose their resistance to insects," warns Monsanto.
Intacta RRpro was approved in 2010 by the Brazilian regulatory agency CTNBio. Therefore, Monsanto is hopeful furthermore to the approval for import into China and Europe Brazil's main customers to bring the technology to market. The company expects to receive such import license before the next season.
The farmers believe that a higher crop yield is attributable not only to genetic engineering of the seed, but also to careful cultivation techniques and soil properties. They express concern that glyphosate has failed in some regions and that veritable pesticide bombs are needed to tame the weeds while the insect pest control is not that hard. It must be mentioned that the introduction of RRpro would mean for Monsanto an additional sales of approximately 1.5 billion euros per year in addition to the profits from glyphosate – if all farmers in Brazil who have grown RR1 until now would switch to the new RRpro variety.
The proceedings have reached the highest Brazilian court
The Supreme Court of Justice (STJ) in Brazil will determine whether the decisions from Rio Grande do Sul against the Monsanto royalties are of national relevance. In the first round of the lawsuit that has raged in the Supreme Court regarding the payment of royalties to Monsanto, the soybean producers had the lead. The court spokeswoman, Justice Nancy Andrighi, acknowledged the admissibility of an action brought by the farmers associations and said it was important that the effectiveness of the decisions reached would extend to the soybean producers across the country. This position was confirmed by the President of the Commission, Massami Uyeda.
A final decision in the proceedings is expected to be handed down in May 2012.
Monsanto defends itself
Monsanto has filed an appeal with the court in Rio Grande do Sul. At first, the group unsuccessfully contests the admissibility of the application of farmers' organizations on the grounds that Monsanto entertains business relationships with individual farmers and not with their organizations.
Elsewhere, Justice Nancy Andrighi has already explained the social relevance of the process. From the documents cited above, it is apparent that 354 agricultural associations can now participate as plaintiffs in this class action lawsuit.
On Friday, 13 April 2012 Monsanto filed a request to waive the decision to suspend the payment of license fees so far without effect [GMW comment: The Supreme Court granted this request by Monsanto in a June 12 ruling, see item 3 below].
Currently, Monsanto is prohibited in all of Brazil to demand royalties for soybeans based on re-planting or the crop yielded. In case the biotech giant should violate the injunction, it faces a penalty of more than 400,000 euros per day.
Valor Economico http://bit.ly/HuZ0gu
http://www2.valoronline.com.br/empresas/2601736/royalties‐dividem‐produtor‐e‐monsanto (available only to subscribers)
Brazilian Supreme Court of Justice (STJ) http://bit.ly/rKnDvO
3. Monsanto Faces $7.5 Billion Payout to Brazilian Farmers
CorpWatch, June 28 2012
Monsanto, the largest seed corporation in the world, may have to pay as much as $7.5 billion to five million Brazilian soy farmers.
The company has long dealt out severe legal sanctions against farmers it suspects of "pirating" its seed. But now the farmers have turned the tables on Monsanto, by suing the company and winning.
Genetically modified (GM) soy production in Brazil began illegally in 1998 with seeds smuggled in from Argentina. Farmers favored the engineered product because it was resistant to Roundup herbicide (another Monsanto product) making it easier to plant. In 2005 Brazilian president Luiz Inacio "Lula" Da Silva, realizing that many farmers had switched over, legalized Roundup Ready soy despite the misgivings of environmental activists. Last year the country planted 30.3 million hectares of GM crops, most of which were soy.
Most of this soy is exported to Europe, where the soy is used to feed cattle and for biofuels, and to China, whose burgeoning beef industry has an enormous and ever growing demand for cattle feed. Soy comprises 26 percent of Brazil's farm exports.
That same year, Monsanto began to charge Brazilian growers a two percent tax for their GM soy production. Farmers that buy seed from Monsanto are also required to sign a contract in which they pledge not to save seed for future harvests, a millennia-old custom among farmers.
Monsanto penalized farmers who did not keep GM soy strictly separated from non GM soy. (also marketed by Monsanto) If tests of non GM soy crops uncovered Roundup Ready soy, Monsanto required farmers to pay a three percent fee.
The biotech industry claims that the farmers either knowingly or unknowingly mix the two strains together. It has long downplayed the allegation that GM seeds spread through pollination or inventory errors, a process known as "genetic contamination."
In 2009 a group of rural syndicates from Rio Grande Do Sul, Brazil's southernmost state, took Monsanto to court, charging that separating GM and non-GM soy was virtually impossible and that therefore the "Monsanto tax" was unjust.
"The issue is that segregating GM and conventional soya is difficult, since the GM soya is highly contaminating", Joao Batista da Silveira, president of the Sindicato Rural de Passo Fundo and one of the leading plaintiffs, told Nature magazine.
In April 2012 a Rio Grande Do Sul judge ruled that Monsanto's fees were illegal and noted that the Roundup Ready seed patent had already expired in the country. The company was not only ordered to stop collecting the royalty fees but to also return all such fees collected since 2004. Such collected royalties amount to $2 billion.
Monsanto appealed the ruling but was dealt another blow on June 12 when the Brazil Supreme Court decided unanimously that whatever the Rio Grande Do Sul courts rule on this matter should apply to the whole of Brazil. This caused the number of plaintiffs [GMW comment: potentially] to balloon to five million and the total royalty owed to rise to $7.5 billion.
Monsanto also claimed that when farmers saved seed to replant it in the following seasons, they were required to pay royalties every season. But the plaintiffs counter that Brazilian law allows them to save seed.
"Monsanto gets paid when it sells the seeds," Jane Berwanger, lawyer for the farmers told MercoPress. "The law gives producers the right to multiply the seeds they buy and nowhere in the world is there a requirement to pay (again)... Producers are in effect paying a private tax on production."
In an official statement, Monsanto stated: "While the lawsuit lasts and the courts do not render a final decision on the merits, the royalty collection system for the use of Monsanto's Roundup Ready technology will continue operating normally based on legal safeguards established."
Toxic Impact Of Roundup Ready Soy
In 2008 Chemical Research in Toxicology published a study by Gilles-Eric Seralini, a French specialist in molecular biology and professor at the University of Caen, that indicated that Roundup is lethal to human cells. According to his research, doses far below those used on soy crops cause cell death in a few hours.
In 2010 Chemical Research in Toxicology published a peer-reviewed study by Argentine embryologist Andres Carrasco, leading researcher at the National Council of Scientific and Technical Research and director of the molecular embryology laboratory at the University of Buenos Aires, which determined that glyphosate, Roundup's active ingredient, is extremely toxic for amphibian embryos in doses much lower than those used in agricultural sprayings, as much as 1,540 times lower.
Brazilian farmers battle Monsanto
1. Monsanto meeting resistance to royalties for Intacta soybeans