GENET archive


7-Business: Argentina: Multi-million dollar controversy over atransgenic soya gene

                                  PART I
-------------------------------- GENET-news -------------------------------

TITLE:  Argentina: Multi-million dollar controversy over a transgenic soya
SOURCE: Barrilli, Argentina
        translation by Susana Pimiento, Sunshine Project, USA
        posted by the Edmonds Institute, USA

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As the fight over genetically engineered soya in Argentina goes on, it
becomes further complicated by demands related to intellectual property
rights. Some would say that this lends further credence to the rumor that
the gene giants are not so much interested in feeding the world as they
are in fleecing the world.

This article on the current situation in Argentina arrived in Spanish at
the Edmonds Institute. Sent by Adolfo Boy.

Here is an English translation, thanks to Susana Pimiento.

--Beth Burrows

[GENET/HM: I have deleted the attached Spanish version, it can be found at]



Multilateral pressure on intellectual property rights over the last 10 years.

Attempt to charge for a patent that is not registered in the country but
registered in countries to which Argentinean soy is exported.

* * * * * * * * * *

Claudio Sabsay, the undersecretary of Agriculture and Food Policies,
rejected the demands of the multinational Monsanto to charge US $3
million per ton of soya containing RR gene exported over the last 10 years.

Members of the National Advisory Commission on Biotechnology (CONABIA),
however, warned explained that the issue could complicate some exports.

The fuse was lit by Pergamino Rural Corporation, who argued that Monsanto
always sold the seed under the framework of Law 20,247 - "we, as
producers, understand that we have bought the gene as well." According to
the ruralists, Monsanto intends to charge up to US $7 per ton, increasing
its claim from US $150 million to over US $300 million.

Yesterday, their complaint reached the Congress' Agriculture and Ranching
Commission, headed by Santa Fé province native María del Carmen Alarcón.
Sabsay and his team also went to the Commission to explain the progress
of the strategic plan for the development of agricultural biotechnology
for 2005-2015. Also at the Commission, Roxana Balsetti, a CONABIA
specialist, clarified that patents apply in specific territories and
that, in Argentina, the "RR" gene is not patented because its creators
presented their claim 14 months after its creation, 2 months past the
time limit set by the national legislation for legal recognition.

However, Blasetti explained that a patent holder has the right to impede
importation into those countries where the patent has been granted and
that is something beyond the jurisdiction of the Argentinean state. She
added, nevertheless, that in some European countries the patent might be
about to expire. She also clarified that in Argentina, what is paid for
is a registered cultivated variety, and not a patented gene. (i)

After the visit of the national officials, there was a sense in
parliament, that Monsanto's pressure has increased following the
Argentinean government's refusal to discuss legislation on global
royalties. Parliamentarians foresee pressure similar to that which took
place on the issue of patents on drugs.

A call to specialists

On the 21st of this month, the Commission is holding a hearing with
specialists from Cocinet, Inta and science and technology bodies, to
analyze the Argentinean situation, on local development and patent
policy. The call for a hearing was formalized after the insistence of
Humberto Roggero, parliament member from Cordoba, who made clear that
Argentina would have to move forward with legislation that recognizes
patents on genetically modified organisms (GMOs), both plant and animal.

Sabsay concurred that Argentina must establish such recognition. He
didn't, however, refer to the royalties law and recalled the fact that
Argentina hasn't ratified the Cartagena Protocol, which would imply
labeling and transfer problems for Argentina's transgenic exports.

On that subject, Sabsay mentioned a joint study with FAO that addresses
the impact that labeling products containing GMOs at various percentages
(0.9% or 5%) would have. He also referred to a memorandum pointing
towards an understanding with China "to moderate unpredictable measures"
by that country on Argentinean sales.

Sabsay highlighted "Argentina's tough position" at the WTO, on the
subject of asymmetry and on the chapter of labeling and transfer of GMOs
and added that joint positions are being sought in Latin America on the
elaboration of Codex. He also pointed out that Argentina is trying to
create a Mercosur ad-hoc commission, "to improve communication and
establish common criteria for the approval of new events".

A strategic plan

It would be 10 year plan and a draft is being completed by almost 100
specialists from the public and private sectors, who have worked over the
last 10 weeks. Undersecretary Sabsay admitted that patents must be
recognized but he made clear the conditions that Argentina will impose.
He also acknowledged that agro-biotechnology will be crucial in
overcoming restrictions in food production and in developing inputs for
the medical, chemical, paper and leather industries.

Big pressures

Monsanto's competitors made Sabsay aware of their opposition to the
claims of the North American multinational. Despite that, at the
Agricultural and Ranching Secretariat, it is acknowledged that Monsanto's
claims go beyond the specific case of the RR soy gene. Sabsay himself
pointed as "revealing" the fact that Monsanto's attack came just after
Argentina approved a GE maize with a gene over which Monsanto holds a patent.

Argentina is caught between patent rights and the European and
international market restrictions on transfer and labeling, that restrict
its markets. Incidentally, by approving maize LK 603, Argentina has for
the first time approved a GMO before it has been approved in the European
market. Until now, the "mirror policy" with the old continent was aimed
at preserving the best client for agricultural exports.

Nevertheless, Sabsay clarified that maize LK 603 would bring the
"satisfaction" of contributing to improvements in summer crop rotation
that, in turn, could improve care of soils.

All actors acknowledge that in world that will soon double its
population, the only way to produce more food will be through
biotechnology, so there is no question on the magnitude of business. And
regulations are what will define the role and the profitability of each
one of the actors.

The postponed legislation on global royalties or the proposals on
biodiversity pending in the senate will determine those roles. That plus
the external fronts opened, particularly at WTO and with the restrictive
policies of the European Union and China, Argentina's main buyers.

Opinion from CARSFE (ii)

CARSFE's president, Dr. Nestor Vittori, opined on the subject by saying
"Monsanto brought RR soy to Argentina without conditions over 10 years
ago. Royalties for research and development were sytematically paid for
by the producers when buying the original seed".

The leader went on to say that "the company introduced that event under
the current seed law that provides for the farmer's exemption, which
allows him to use saved seed in subsequent plantings".

"Therefore, advancing royalty charges for soy containing the RR gene at
the ports of destination constitutes an unfair trade practice, given that
such a condition was not stated at the time the plant variety was introduced."

"Likewise,"Vittori added, "it must be pointed out that Monsanto used
Argentina like a launching platform for transgenic soy, at a time when
the world hadn't determined to accept it, and, in this sense, Argentinean
production constituted the critical mass in international trade for
defeating the barriers to transgenic products."

"In line with this and previous assertions, in which Monsanto's complete
misalignment with the countries' interests has been manifest - such as
when it demanded payment in US dollars for seeds and agrochemicals during
the last stage of the currency convertibility and, when pressured on
Chinese glyphosate imports, it demanded preferential tariffs, and also
when withdrew its soy research program from the country - we reaffirm
that, unless Monsanto shapeslines up, it should leave Argentina for good
and, if it attempts obstructing international trade, that it should be
prohibited from operating in Argentina", Vittori concluded.


i. She seems to refer to a plant breeder's rights certificate, i.e. UPOV
ii. Confederation of Rural Associations of Santa Fe

                                  PART II
-------------------------------- GENET-news -------------------------------

TITLE:  Monsanto Ups Efforts To Collect GMO Royalties In Argentina
SOURCE: Dow Jones Newswires / AG Professional, USA
DATE:   17 Aug 2004

------------------- archive: -------------------

Monsanto Ups Efforts To Collect GMO Royalties In Argentina

Monsanto is urging Argentina's farm sector to help it create a way to
collect royalties on the use of its genetically modified soybean seed
technology. In a large advertisement in the country's leading newspapers,
Monsanto said Argentina needs a payment system that would give the
company a financial incentive to keep investing in Argentine crop technology.

Argentina is the world's second-ranked user of genetically modified
seeds, most of which are designed by Monsanto. But in the case of
modified soybean seeds, which account for an estimated 95 percent of the
crop's planted area, Monsanto is unable to collect royalties on some
seeds or their repeated use.

Unlike hybrid corn or sunseed, which must be purchased anew each year,
farmers can store soy seeds from one season to the next. Many farmers say
this is fine, noting that they already paid once for the seeds.

Monsanto sees it differently, saying that the repeated and unpaid use of
seeds denies the company an adequate return on its investment. The
company also notes that some farmers never pay royalties for the seeds.
Many uncertified seeds are sold in an underground market, depriving the
company of legitimate income. This also deprives the government of tax

Absent a better return on investment, Monsanto says there will be little
incentive to invest in the kinds of new technology needed to boost crop
production and quality in the future.

Seed associations here estimate that overall seed and biotech event
royalties totaled $75 million during the 2003-04 harvest. This figure
could have reached an estimated $400 million if all sales had been certified.

"For this to happen, it is necessary to have a regulatory framework and
an appropriate business model because both of these are fundamental to
making investment decisions," the advertisement said. "The business model
should allow for a reasonable return for those, like Monsanto, who invest
large amounts in the research, development and approval of this technology."

Monsanto said the current system, in which farmers pay a one-time sales
fee when buying "certified seeds," is inappropriate for the sale of soy
and wheat seeds.

"It is worth noting that the certified seed market does not surpass 18
percent of the 14 million hectares of planted areas (of soybeans),"
Monsanto said. "Because of this, we all face a challenge."

Monsanto stopped selling GM soy seeds in Argentina in January, saying it
was no longer a profitable business. The company is talking with farm
groups and others now about the development of a royalty collection
system. But it is unclear how much progress is being made.

On Thursday, Argentina's agriculture secretary indicated Monsanto's
proposals for such a framework are far from satisfactory. "We are within
our legal and moral rights to not accept the royalties payment scheme
because we feel that these companies have already received a lot from our
country and they should consider themselves well paid," Secretary Miguel
Campos said, as quoted by an Agriculture Secretariat statement.

Despite the harsh words, Campos has said repeatedly that the Secretariat
is working on the creation of a payment system. What appears to be in
doubt is not the eventual creation of such a system, but rather the
details of how it would work and how much farmers would pay.

Campos' comments were music to the ears of some producers and farm groups
critical of Monsanto's efforts.

"The secretary was very clear and correct when he said Argentina has the
legal and moral authority to reject this proposal by Monsanto," said
Julio Curras of Argentina's Agrarian Federation, which claims to
represent up to 60,000 farmers.

"We've been paying royalties on soy since 1996 and if we accepted this
system we'd be paying the same royalty twice," Curras said. "We could
never accept this. It would be terrible."

A spokesman for Monsanto declined to respond to Campos' comments, but he
said the company is optimistic about eventually reaching an accord.

"We are confident we're going to reach an agreement," said Federico
Ovejero, Monsanto's public and government affairs manager.


European NGO Network on Genetic Engineering

Hartmut MEYER (Mr)
Kleine Wiese 6
D - 38116 Braunschweig

P: +49-531-5168746
F: +49-531-5168747
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