May 19, 2016


Monsanto "disappointed" over failure to find solution for soybean tech royalty system in Argentina



Monsanto had expressed its disappointment over recent discussions with Argentina's Ministry of Agriculture, which have yet to result in a mutually agreeable solution for soybean growers, the agriculture industry and the government concerning a soybean technology royalty system.


As a result of its obligations to farmer customers worldwide, Monsanto is reinforcing its commitment to enforce its private contracts and intellectual property rights both inside and outside Argentina.


Additionally, until such time that there is further clarity within Argentina on a predictable way to collect royalties on the value new patented soybean technologies bring, the company plans to take measures to protect its current assets and will suspend launching any future soybean technologies in the country, including Roundup Ready 2 Xtend™ soybeans.


"We were optimistic that a solution would be secured to allow the legally operating soybean technology royalty system to continue uninterrupted following recent discussions between the Ministry of Agriculture for Argentina and the soybean industry stakeholders," said Brett Begemann, Monsanto's president and chief operating officer.


"While Argentina has acknowledged that they were committed to supporting a conducive environment for continued investment and further long-term development of agriculture through recognition of intellectual property rights and a recognition of private agreements, the recent actions are not consistent with that position. Both endorsing and actively supporting these basic principles are necessary to create a predictable business environment, which invites foreign investment."


During conversations, soybean industry stakeholders heard the Minister of Agriculture's concerns with the existing system, which has been legally operating for more than a year, and responded with several proposals. However, the parties were unable to come to a mutually agreeable solution.


"While Monsanto is concerned that the recent government actions may adversely affect its private agreements, the company remains committed to engage in dialogue with the government to find a solution that will help encourage and spur new investments in Argentina," Begemann added.


In light of the continued evolving business environment in Argentina, the company is doing a full review of its business plans and projections for Argentina and will assess any implications to its balance sheet and earnings.


For the growers who choose to use Monsanto's Intacta RR2 PRO™ soybean technology, the payment of royalties provides Monsanto and its owners with a return on the significant investments made for the development of the technology and the added value that is delivered to and recognised by growers, while allowing for re-investment in new technologies.


The system in Argentina offers growers who choose to use the technology the choice and flexibility in payment timing. These royalties can be paid at the time of purchase of certified seed and at various points along the way up to and after the point of grain delivery.


Growers in Argentina have many choices, including whether or not to use Intacta RR2 PRO™ soybean technology.


Until last season, this technology was not available and growers controlled insects through the use of conventional pesticides, an option that is still available to them.


Growers switched to the new Intacta RR2 PRO™ technology as the system offers more value than previous practices.


As an indication of the value of this technology, the University of Buenos Aires estimates that Intacta RR2 PRO™ soybeans could provide Argentina with an economic benefit of US$3.5 billion over the next five years


- Business Wire

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