South America Calling

Argentina's government has interceded in the dispute between Monsanto and the country's farmers in an attempt to resolve a dispute over royalties for the company's new Intacta RR2 Pro soybean technology.

On Tuesday, the Agriculture Ministry said it will issue a decree obliging farmers to register Intacta soybean use as a means to control illegal trade in seeds.

The conflict began when the St. Louis-based biotech giant announced it wanted crushers, exporters and elevators to test cargoes and collect royalties on Intacta bean derived from seeds produced on the farm. Farm groups says the practice is abusive and against the law.

Argentina allows farmers to produce seed on the farm for their own use without paying royalties. However, Monsanto included in sales contracts for the insect-resistant Intacta a clause obliging farmers to pay royalties on seeds produced from those purchased.

In an attempt at a compromise, the government of Cristina Fernandez will oblige farmers to register their intention to use reproduced seed, restricting trade in these beans. It will then undertake to increase monitoring of this trade.

According to the Ag Ministry, small producers will not be obliged to pay royalties on reproduced seed, but large operations will.

Monsanto supports the plan on the understanding there is greater monitoring, an unidentified company source told Reuters.

First-generation Roundup Ready technology was pirated on a massive scale in Argentina and no royalties were charged on the technology at all after 2006.

The company was determined not to be outmaneuvered again on Intacta, its second-generation Roundup technology, which was employed commercially for the first time this year. It was only employed on a small proportion of the 50 million acres of soy planted this year, less than 5% and mainly in northern regions, and royalties were paid on 70% of this area. But Monsanto wants to establish the rules for years to come.

Exporters have been testing cargoes since April but elevators are resisting Monsanto's demand to test.

The impact of the new rules very much depends on definition: What constitutes a large farmer? Also, their implementation: Will farmers really be forced to register seed produced on farm? The Agriculture Ministry statement was light on detail. A decree will be issued in the coming days, which will hopefully provide more information.

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

(ES)

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