October 12, 2010

Argentina may change seed laws to promote GM soy

Argentina is planning to reform its seed laws, with a new Seed Act governing royalty payments being drafted to encourage new GM soy varieties to be introduced into the Argentine market.

Last year only 15% out of 19 million hectares of soy that produced a record 52.7 million tonnes were planted with certified seed.

This holds back the country's competitive ability to continue the huge growth in total grains production it has achieved over the past 10-15 years through not having access to the best wheat, corn and soy varieties, unlike Argentina's neighbours Uruguay and Brazil.

The lax controls on royalties and farm-saved seed are the main reasons why those varieties aren't being marketed in Argentina.

One option is to strengthen the current regulations under the National Seed Institute and collect royalties at farm level, during seed cleaning/saving and self-declaration. Analysts believe this will collect royalties from 50% of certified seed in the first year.

Alternatively, royalties could be taken from grain sales. This option, supported by the seed industry, is the most practical and it would give 100% coverage. But some farmers believe it's an unfair and regressive tax, particularly as the Argentine government already collects 35% of the total soy crop value in its export retentions.

Argentina's growers know they need to pay for genetic improvements in its key crops to increase yields. But equally, while receiving 35% less than the world price for their outputs, there's some reluctance to accept any input cost increases.