November 16, 2005

 

EU soy importers urge Argentina and Monsanto to reach accord
 

 

Europe's animal feed manufacturing industry, represented by a group known as FEFAC, has called on the Argentine government and the biotechnology company Monsanto to resolve their dispute over a key patent right issue in Argentina.

 

The two sides have been battling for more than a year over how to address Monsanto's claims that Argentine farmers do not properly pay for the right to use Roundup Ready soybean seeds.

 

Monsanto designed the seeds to be resistant to herbicides, making it easier for farmers to destroy weeds without harming soybeans. The seeds have helped farmers more than triple soybean production since 1996, when they were first introduced in Argentina.

In June Monsanto began filing lawsuits over the shipment of soybean products to the EU. Many EU nations recognize Monsanto's patent on the GM seeds, which are used to plant 95 percent of the soybeans in Argentina. In contrast, the Argentine government has never allowed Monsanto to patent the seeds.

 

That, Monsanto says, has led many farmers here to avoid paying royalties on the seeds.

 

Argentine farmers properly pay for the seeds less than 20 percent of the time, Monsanto says. More often than not the seeds are bought illegally in an underground seed market or simply replanted after each harvest.

 

Analysts have said the lawsuits could lead EU courts to rule that importers there must pay a patent violation fee when buying soybeans from Argentina. But the EU food industry, which imports the soymeal, said Monday it is not willing to pay any such fees.

 

"The European feed industry, using up to 10 million tonnes of soybean meal from Argentina annually, has no direct advantage from the presence of residues of herbicide resistant genes in the products they buy," said FEFAC President Martin Tielen, as quoted in a statement. "The industry is therefore not prepared to pay for the use of this technology. Argentine farmers are the main beneficiaries of using the new seed technology, which has substantially improved yields. They should pay the technology fee for the seeds... ."

 

Tielen said the conflict between Argentine government and Monsanto "seriously jeopardizes the market prospects for Argentina as a reliable supplier to the European market worth up to EUR2 billion for soybean meal exports alone".

 

A spokesman for Monsanto did not return phone calls for comment. However, Agriculture Secretary Miguel Campos said in a statement that the Argentine government is simply trying to "defend its national interest" and is not being "confrontational" with Monsanto.

 

Campos also indicated an accord with Monsanto is unlikely in the near future.

 

"It is not within the reach of the Argentine government to 'immediately' end the conflict, as requested by FEFAC," Campos said in a statement obtained Tuesday by Dow Jones Newswires. "First there must be a change of attitude from Monsanto toward Argentine exports. The existing problem can be solved when that change of attitude takes place."

 

Campos said Monsanto needs to stop trying to charge royalties on existing seed technologies and seek instead to collect fees "beginning with (the launch of) new ones." He said Monsanto has behaved "abusively" and needs to stop thinking "retroactively".

 

On a more positive note, the chief economist at the Argentine Rural Society, the country's largest and oldest farm group, said he and representatives of other private sector entities, including the local cereals exchanges, have been meeting with Monsanto every week to try to solve the dispute.

 

"We're working every week to come up with a solution," said Ernesto Ambrosetti, noting that the government is not participating in the weekly meetings. "First we need to come up with a solution that satisfies us in the private sector. Then we can present it to the government. We hope to have a solution by the end of the year. We're working to ensure that there is no distortion in the price of Argentine soymeal in the international market."