South America Calling

SAO PAULO, Brazil (DTN) -- Aprosoja will drop a lawsuit challenging the right of biotech giant Monsanto to charge royalties on first-generation Roundup Ready (RR1) soybeans in return for a discount on royalties for the new Intacta RR2 Pro seeds.

The announcement was made in a new release Friday. Aprosoja is the association of soybean producers in Mato Grosso, Brazil's largest soy-producing state.

The decision closes a long, often fractious, dispute over Roundup Ready royalties in Brazil and smooths the way for the launch of Monsanto's new stacked, insect-resistant Intacta RR2 soy technology in the upcoming 2013-14 season.

An assembly of Aprosoja members late Thursday voted to recommend farmers accept Monsanto's offer of a 16% discount on royalties on Intacta RR2 Pro in return for not suing over RR1 royalties.

Just as importantly, Aprosoja next week will withdraw a suit claiming the local patent for RR1 expired in September 2010, not in 2014 in line with the international patent.

It was looking increasingly likely that Monsanto would lose after Brazil's top appeals court in February ruled in favor of Aprosoja and Famato (Growers Federation of Mato Grosso state). This decision prompted Monsanto to stop charging royalties, although the question of payments from September 2010 remained.

RR1 technology dominates Brazilian soybean industry, present in about 85% of all beans. Until February, Monsanto was charging royalties on the technology at 2% on seeds, or at $3.60 to $4.80 per acre on planted landed.

Up until June, Monsanto had vowed to defend its rights to charge royalties in the courts, but it became less militant after China approved Intacta RR2 imports, opening the way for planting in Brazil in the upcoming 2013-14 season.

Monsanto believes the seeds will be a big hit in Brazil and didn't want the RR1 dispute to affect its launch.

As such, on July 24, Monsanto offered a discount on royalties for Intacta seeds of 18.50 Brazilian reals per hectare ($3.30 per acre) off the established price of 115 Brazilian reals per hectare ($20.51 per acre).

Monsanto estimates some 2.8 million bags of Intacta RR2 Pro seeds will be available for the upcoming season, which would be enough for 8% of projected planted area.

Aprosoja's decision to drop the case almost certainly puts the issue to bed, for while other groups could still sue, Mato Grosso farmers were by far the most militant in pressing the case.

Alastair Stewart can be reached at alastair.stewart@telventdtn.com

(AG/ES)

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