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7-Business: Price increase sought for GM soy in Brazil



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

TITLE:  Price increase sought for GM soy in Brazil
SOURCE: Reuters and AE Brazil
        compiled by Robert Derham, Checkbiotech, Switzerland
        http://www.checkbiotech.org/root/index.cfm?
fuseaction=newsletter&topic_id=2&subtopic_id=9&doc_id=11027
DATE:   18 Aug 2005

------------------- archive: http://www.genet-info.org/ -------------------


Price increase sought for GM soy in Brazil

Brasília - As the use of genetically modified soy grows in Brazilian, so
have the negotiations from agribusinesses to raise the seed prices.

On Tuesday and Wednesday, companies met with Brazilian farmers and
officials to discuss seed prices for the use of genetically modified soy.

During the National Confederation of Agriculture (CNA) meetings,
companies informed farmers and cooperatives they would like to receive
R$ 0.88 ($1 = R$ 2.33) per kilogram from sales its genetically modified
(GM) soybeans.

The purpose of the meetings was to reach an agreement on royalty payments
for 2005/06 crop planting, but so far a solution is not in sight.

"We had planned to reach an agreement, but this still hasn't happened,"
said CNA vice-president Carlos Sperotto.

The offer from Monsanto was nothing new for Brazilian farmers. A similar
price was suggested back in June and July of this year.

Commenting on the price increase, a Monsanto official told Reuters,
"Given the gains that this technology has shown, it's a return of four
times the amount invested by the farmer."

However, Carlos Sperotto, vice-president of the Brazilian Agriculture and
Ranching Confederation told reporters, "Farmers want to pay when they
have the beans in their hands, not before the harvest."

Due to a lack of government subsidies that many western countries enjoy,
many Brazilian farmers are hesitant to pay a premium price out of fear
from environmental elements such as drought and flooding, which would
leave them empty handed.

However, Brazilian farmers do understand and appreciate the value of
Roundup Ready soy. As of last year, negotiations led to a post-harvest
royalty payment of two percent in some regions of Brazil.

Yet, farmers argue that a seed price increase would only encourage
illegal black market trading of transgenic soy, because illegal seed
prices could be obtained for about half the proposed price.

Black markets for GM soy flourish in many south American country,
including Brazil. Estimates have pinned total harvest figures stemming
from GM soy ranges to as high as 90 percent - much of which is harvested
from illegal seeds.

Although Monsanto's name attracts most of the attention during these
ongoing negotiations with Brazil, revenue from a price increase would be
shared across a field of companies that also have an invested interest.

Some of the interested Brazilian companies that stand to gain from a
price increase are Embrapa, Coodetec and the Mato Grosso Foundation,
which all have genetically engineered seed varieties and distribute them
under license in Brazil.

Talks between Brazilian farmers and companies are expected to continue,
with the hope that an agreement can be reached soon.




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