GENET archive


7-Misc: US Dispute on high patent fees on RR soy seed

----------------------------- GENET-news -----------------------------

TITLE:  A) ASA calls for equitable sales practices for soybean
        B) Monsanto responds to GAO report on soybean pricing
SOURCE: A) American Soybean Association, USA, press release
        B) Monsanto, USA, press release
DATE:   both February 22, 2000

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Dear GENET-news reader,
it is generally recognized as proven that patents will lead to higher 
product prices. Therefore many developing countries try to circumvent 
any obligations to implement patent systems or try to apply 
exemptions e.g. on drugs which are even possible within the tightest 
patent system - the TRIPs-agreement of the WTO. In the case of GE-
seeds there is not much choice left for the countries once they have 
signed the WTO agreements; granting patents or patent-like protection 
on GE-seed is obligatory. Unless the country is rather lax in 
implementing those obligations ...
The recent US General Accounting Office Report "Biotechnology - 
Information on Prices of Genetically Modified Seeds in the United 
States and Argentina" (GAO/RCED/NSIAD-00-55,; 
click "listed by title") sheds light on such unfair practices by 
Argentina reducing the benefits of GE crops for Monsanto.

Hartmut Meyer


ASA calls for equitable sales practices for soybean seedstock

The American Soybean Association (ASA) is calling for Monsanto 
Company to remedy inequities that are disadvantaging U.S. farmers in 
the global marketplace. ASA is concerned with the large disparity of 
Roundup Ready(r) soybean seed prices and business practices between 
the United States and Argentina, which was highlighted in a U.S. 
Government Accounting Office (GAO) report released today.

"U.S. soybean farmers are being charged more than twice the amount 
for Roundup Ready soybean seed than growers in Argentina paid last 
year," said ASA President Marc Curtis, a producer from Leland, Miss. 
"According to the GAO report, a bag of Roundup Ready soybean seed 
sold for about $9 in Argentina and about $21.50 in the United States 
in 1999."

One of the reasons that the price of Roundup Ready soybean seed is 
higher in the U.S. is because only U.S. growers are charged a 
technology fee of $6.50 per 50-pound bag on top of the price of the 

"ASA understands that companies need to earn a return on their 
investment in research and development to continue investing in new 
traits and technologies. ASA strongly objects, however, to U.S. 
farmers alone being required to pay for these technologies while 
farmers in other countries have access to the same technology without 
paying for it," said Curtis.

Also, the base price of Roundup Ready soybean seed is lower in 
Argentina because growers there are allowed to save seed harvested 
from one year's crop to sow the next year's crop, a common farming 
practice. The Argentine farmer's ability to save seed has put 
downward pressure on the price of new Roundup Ready soybean seed sold 
by Argentine seed companies. To remain competitive, seed companies 
must reduce the farmer's incentive to replant last year's soybeans. 
In contrast, U.S. soybean growers are required to sign a grower 
agreement with the seed company that prohibits U.S. growers from 
saving seed harvested for planting the next year.

"Monsanto has told us that they can't charge the technology fee and 
enforce the restriction on saved seed in Argentina because 
Argentina's patent and plant variety protection laws differ from U.S. 
laws," Curtis said. "The GAO report also indicates a large portion of 
Argentina's soybean seed is sold on the black market and not through 
commercial firms. In the future, seed companies should consider their 
ability to protect intellectual property rights and enforce contracts 
in potential overseas markets before they decide to commercialize 
products in those markets. Otherwise, companies should amend their 
U.S. business practices so they don't treat U.S. farmers less 
favorably than farmers in other countries."

Prior to 1998, the price charged for Roundup Ready soybean seed in 
Argentina was high enough so that the grower's total cost was about 
the same as it was in the U.S. Over the past two years, however, the 
price of Roundup Ready soybean seed dropped to the equivalent of 
about $9 per 50-lb. bag from about $25 in 1997.

Now that the price has dropped dramatically in Argentina, U.S. 
growers are caught in a situation that places them at a competitive 
disadvantage. Using seed prices contained in the GAO report and a 
seeding rate of 1.3 bags per acre (seeding rates in the U.S. and 
Argentina are similar), U.S. growers' per acre Roundup Ready soybean 
seed costs in 1999 were $27.95 per acre versus $11.70 for Argentine 
growers. Assuming an average 40-bushel per acre soybean yield, the 
disparity in Roundup Ready seed costs puts U.S. growers at a 41-cent 
per bushel price competitive disadvantage.

"Monsanto has the ability to quickly eliminate a large portion of 
this competitive disadvantage for U.S. growers by adjusting its 
business practices in the U.S. market," Curtis said. "ASA is urging 
Monsanto to quickly resolve the current price inequity on Roundup 
Ready soybean seed by discontinuing and refunding technology fees for 
the 2000 soybean crop, dropping restrictions that prevent farmers 
from planting their own saved seed, or implementing other changes 
that will eliminate the disparity that exists between the seed prices 
paid by U.S. and Argentine growers."

"ASA continues to be a strong supporter and advocate of new soybean 
seed technologies - be they the result of biotechnology or convention 
breeding programs," Curtis said. "There is no doubt that the 
introduction of Roundup Ready soybeans, developed via modern 
biotechnology, has benefited soybean growers in both the United 
States and Argentina."

Producers have rapidly adopted Roundup Ready soybean technology since 
it was commercially introduced in 1996. One only has to look at the 
responses of growers in the U.S. and in Argentina, who planted 55 
percent of U.S. soybean acres and an estimated 90 percent of 
Argentina's soybean area to Roundup Ready varieties, to know that 
farmers welcome this technology.

"ASA's objection is that beginning in mid-1999, only U.S. growers are 
being asked to pay for the research and development costs for the 
Roundup Ready technology," Curtis said. "That just isn't fair, and 
that's what ASA is asking Monsanto to remedy."

Argentina, the world's third largest producer and exporter of 
soybeans and soybean products, competes directly with the United 
States for overseas markets. Access to new soybean technologies has 
helped Argentine farmers increase their yields to a point where they 
are comparable with U.S. yields. With fields located in the Southern 
Hemisphere, Argentine farmers are now preparing to harvest the 
soybean crop they cultivated from seeds purchased in mid-1999. "ASA 
views this situation as an opportunity for Monsanto to take a 
leadership position and alter those business practices it has under 
its control in order to treat U.S. farmers as equitably as Argentine 
growers," Curtis said. "ASA will work with Monsanto and other 
technology companies to aggressively identify solutions that will 
promote the development of new seed technologies and meet the 
challenges of international patent laws while maintaining the 
competitiveness of the U.S. soybean industry."

For more information contact: Marc Curtis, ASA President, (601) 686-

Bob Callanan, Communications Director,
American Soybean Association 12125 Woodcrest Executive Drive, Suite 
100, Saint Louis, MO 63141 Phone: (314) 576-1770, Fax: (314) 576-2786

Bob Callanan,
ASA Communications Director
Phone: (314) 576-1770
Fax: (314) 576-2786 


Monsanto responds to GAO report on soybean pricing

ST. LOUIS, - A new report issued by the General Accounting Office 
(GAO) confirms that weak intellectual property protection and lax 
enforcement of seed laws in Argentina have limited Monsanto's ability 
to obtain value for its traits developed through biotechnology. 
According to the report, an estimated 25 percent to 50 percent of the 
soybean seeds grown in Argentina are sold in violation of Argentine 
seed law. This has led to disparity in pricing of Roundup Ready 
soybean seed between Argentina and the United States for this 
planting season.

During the first years of commercialization of its biotech seeds, the 
seed companies licensed by Monsanto were able to obtain value for the 
technology in Argentina by charging a seed premium comparable to the 
technology fee charged in the United States. However, only in the 
most current planting season has the price fallen below typical 
American seed market prices. This is largely the result of black-
market seed sales and lack of patent protection, which have 
suppressed the price of Roundup Ready soybean seed there.

The GAO report also investigated the pricing of biotech corn in 
Argentina and the United States and concluded that patent protection 
and hybridization resulted in comparable seed prices in both 

"We price our products to remain competitive in response to local 
market conditions," said Carl Casale, Monsanto's vice president for 
North American agriculture markets. "Unfortunately, the influence of 
black-market sales and the lack of intellectual property protection 
in Argentina have resulted in the erosion of the value of our 
technology there. We're as unhappy about this as the American farmer."

Last week, U.S. Commerce Secretary William Daley demanded that 
Argentina grant greater protection to pharmaceutical patents or face 
U.S. complaint to the World Trade Organization. "We believe a similar 
request for seed law enforcement should be made for products of 
agricultural biotechnology," Casale said.

"We realize that American farmers are in a crisis situation today 
with commodity prices at all-time lows. However, the current economic 
crisis facing American farmers is not one of competitive disparity of 
the cost of Roundup Ready soybeans in America and Argentina, but one 
of low commodity prices affecting farmers globally," Casale said.

"Since 1997, Roundup Ready soybeans have reduced herbicide costs for 
U.S. soybean farmers by almost $700 million," Casale said. "While 
significant, this has not been enough to sustain the profitability of 
the American farmer." Casale believes that lowering the cost of 
soybean production is only half the picture.

"America's farmers will not attain real long-term economic security 
merely by participating in the race to be the lowest-cost producer," 
Casale said. "What's needed is to find a way to improve the demand 
for soybeans through new utilization Ń such as health foods, biofuels 
and industrial products - that will enable the American farmer to 
produce at full capacity and receive a fair price for his crop."

Monsanto is working on a program to partner with organizations 
representing American soybean growers and offer technological 
expertise to ensure investment is focused on developing new uses that 
increase the use of soybean products. Further details of this program 
will be available in the near future.

For more information, please contact:
Dan Verakis (314-694-3818 - Office) (888-971-1038 - Pager after 5pm 


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