South America Calling

Brazil Intacta Royalty Controversy

Controversy continues to surround the charging of royalties on Monsanto's Intacta RR2 technology in South America.

This week, news came from Brazil that farmer organizations had obtained an injunction prohibiting the St. Louis-based biotech giant from charging royalties on seeds with the Intacta insect-resistant strains that are produced on the farm.

The ruling was handed down by a court in the southern state of Rio Grande do Sul but is valid across the country, means the agribusiness giant is prohibited from charging the 7.5% surcharge on the sale of beans that weren't derived from certified seeds.

Saving seeds is a relatively common practice among small Brazilian farmers.

Judge Silvio Tadeu de Avila ruled Monsanto is subject to a R$2,000 fine every time it charges farmers for using their own seeds or seeds exchanged with other growers.

The case was brought by the Rio Grande do Sul Soybean Growers Association (Aprosoja-RS) and by the agricultural workers' federations of the southern states of Rio Grande do Sul, Santa Catarina and Parana.

The farmers argued that it was abusive to charge 7.5% on the sale of beans produced from own seed when royalties were paid on the purchase of the original seeds. Brazilian farmers have been paying royalties of R$115 per hectare ($14 per acre) on Intacta seed purchases.

Monsanto said it had not been officially informed of the decision but added, in a statement, that it was confident this system of payment of royalties for technology is in accordance with local laws.

The company denied that farmers who saved seeds were being forced to pay higher rates, pointing out that they could pay on reserved seed by registering with the Agriculture Ministry.

This issue has a long way to run. The latest ruling is just an injunction, and there is a lot of scope for it to be questioned, appealed and overturned.

The system of payment of royalties after the harvest has been in place for 10 years in Brazil, on the original Roundup Ready technology, although farmers have always questioned its validity.

Argentina farmers are also disputing whether they must pay royalties on seeds produced for their own use. The government intervened, creating a registry that sought to curtail the black market in seeds.

But while Intacta is not widely used in Argentina, it has been a major success in Brazil, where farmers are struggling to control attacks from caterpillars. The technology was present in up to 20% of the 2014-15 crop, and that figure may top 30% in 2015-16.



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