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7-Business: Licensing fee may double cost of new GE alfalfa seed

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

TITLE:  Licensing fee may double cost of new alfalfa seed
SOURCE: Capital Press, USA, by Tam Moore
DATE:   18 Aug 2005

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Licensing fee may double cost of new alfalfa seed

TULELAKE, Calif. - Monsanto, which got U.S. government approval for
commercial Roundup Ready alfalfa a few weeks ago, has set a technology
licensing fee that will nearly double the seed cost for most western
farmers wanting to try the system.

That's the assessment of Steve Orloff, a University of California
extension agronomist and farm advisor in Siskiyou County.

"Financially, I think there will be a payback, but you are going to have
to sharpen your pencils," Orloff told growers at last week's field day at
the UC Intermountain Research and Extension Center.

His comments came to farmers who usually get six years out of an alfalfa
stand in the mountain valleys of Northern California and Southern Oregon.
Where stand life is less, the math is different, and may not favor trying
RR alfalfa.

Orloff is in his third year of testing RR alfalfa varieties. He's also
carried out extensive research on best management techniques for the
commercial RR varieties.

The bottom line is a Monsanto technology fee of $3 a pound. Typical
seedings are at a rate of 18 to 20 pounds per acre. Getting a stand
established with RR alfalfa could cost $60 an acre, Orloff said, while
the savings on herbicides over a six-year stand life would be about $75.

The alfalfa carries a gene resistant to glyphosphate herbicide, allowing
growers to spray the crop and kill competing weeds.

Official notice of the government de-listing of RR alfalfa came in the
June 27 Federal Register. Both the Environmental Protection Agency and
U.S. Department of Agriculture signed off on a finding of "no significant
impact" after years of testing.

"We have full regulatory approval for domestic use in the United States,"
said Mark McCaslin, the president of Forage Genetics International. He
spoke by phone from company headquarters in Nampa, Idaho.

Forage Genetics did the variety work for Monsanto, transferring the RR
gene to dozens of commercial alfalfa varieties distributed by several
seed companies.

What's available for fall planting, McCaslin said, is a limited supply of
RR alfalfa seed. Last winter he told an alfalfa conference about 1.5
million pounds should be on hand. Orloff said the best estimate this
summer is nearer 1 million pounds - enough to plant perhaps 50,000 acres.
McCaslin said because so many seed companies are involved, he can't be
specific on seed supply.

Because the GMO alfalfa isn't cleared for overseas planting, Monsanto
will also ask those who buy seed to promise they won't sell the hay in
export markets. Monsanto had said, as recently as last winter's grower
meetings, that it wouldn't release seed on the West Coast until it knows
RR hay is acceptable to Asian importers.

Wayne Edwards, a California-based field man for Monsanto, said
technically the company position is intact; Japanese approval is expected
in November. That means it would come months before a fall-planted
alfalfa crop yielded its first cutting in late spring, 2006.

Jennifer Garrett, Monsanto's director of information, said in a telephone
interview that the decision to release seed for fall planting came after
meetings with hay growers in Washington state, and reports on progress
toward Japanese acceptance of Roundup Ready alfalfa.

She said Monsanto surveys indicate 99 percent of U.S. alfalfa production
is for domestic use, and West Coast export markets take just 1 percent.
The Monsanto license agreement that comes with fall-planted seed includes
a grower's pledge that hay will be sold in domestic markets.

As part of the deal with Washington hay exporters, Monsanto also promised
to make genetic hay testing kits available so exporters can test and
assure buyers there's no GMO hay present.

Garrett also confirmed that Monsanto has different technology license
fees, apparently based on the quantity of herbicide used. Irrigated hay
producers will pay a higher fee, $3 per pound, than will dryland
producers in the Midwest. Monsanto set the license fee there at $2.50 per
pound of seed.

"It's related to the type of production system," she said.


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