Who collects royalties? | Biotech firms attempt to force grain merchants to collect; some haven’t agreed
SAO PAULO, Brazil (Reuters) — Some soybean exporting companies in Brazil have still not agreed to collect royalties for Monsanto varieties, which could prevent farmers from selling a portion of this year’s crop.
However, Monsanto said 500 companies that purchase soybeans from farmers have agreed to police royalty payments at more than 3,000 points across Brazil, an arrangement that highlights the increasingly complex relationship between global grain merchants and biotech firms.
One exporter said earlier this month it would collect payments on Monsanto’s new Intacta RR2 Pro seeds in exchange for a fee.
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As well, Abiove, which represents global grain merchants and smaller Brazilian firms, told soy growers group Aprosoja in September that other companies were in the process of settling on compensation amounts.
However, Abiove said last week that a broader deal had stalled, citing lingering legal concerns that Monsanto could halt shipments on cargoes that contain soy for which the company has not received royalties.
“The risks of possible future embarrassment to the soy industry from Monsanto … may prevent crushing and trading firms from receiving that (Intacta) soy,” Abiove said in a statement.
Trading firms have not had to oversee royalty payments in the United States because farmers are not allowed to reuse seeds.
In Brazil, where genetically modified varieties have been legal only since 2005, it is easier for farmers to skip out on Monsanto’s fees and reuse the seeds. Brazil is Monsanto’s second-largest market.
While some merchants in Brazil have been collecting royalties on Monsanto’s first-generation Roundup Ready soybeans in Brazil for a decade, the arrangement was deeply frustrating for them because they had to accept additional work and liability without compensation.
The industry has been determined to avoid a similar situation with Intacta, which includes a gene to ward off pests and was first planted in South America last year.
Farm groups believe 15 to 25 percent of Brazil’s current crop, which is now more than 10 percent planted, was seeded with Monsanto’s Intacta seeds.
Monsanto said farmers would have plenty of companies to sell their Intacta soybeans to as it continues to negotiate with Abiove members.
Brazil’s Intacta saga is part of a global trade, copyright, environment and food safety debate about genetic modification in agriculture that is far from resolved.
Early this year, China rejected 1.25 million tonnes of U.S. corn and byproducts containing Syngenta’s GM strain MIR-162, which China has not yet approved.
Cargill sued Syngenta last month for marketing the seeds in the United States, even though it lacked Beijing’s approval, estimating it suffered losses of more than US $90 million.
