7-Misc: US Dispute on high patent fees on RR soy seed
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- Date: Mon, 13 Mar 2000 23:04:30 +0100
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----------------------------- 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
-------------------- archive: http://www.gene.ch/ --------------------
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, http://www.gao.gov;
click "listed by title") sheds light on such unfair practices by
Argentina reducing the benefits of GE crops for Monsanto.
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
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, firstname.lastname@example.org
American Soybean Association 12125 Woodcrest Executive Drive, Suite
100, Saint Louis, MO 63141 Phone: (314) 576-1770, Fax: (314) 576-2786
Bob Callanan, email@example.com
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
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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