Buenos Aires, Argentina
January 27, 2005
Checkbiotech staff
Argentina’s
Agricultural Secretary will soon announce new guidelines for
genetically modified seeds that are to take effect before the
2005-2006 harvest, much to the disaccord of the industry.
Monsanto has been pushing for solution for the 2004-2005
harvest, with a deadline of this coming March, something that
the secretariat was not willing to allow.
The announcement, made by Daniel
Bamaceda, the sercretariat’s spokesman, is intended to be a
compromise between Argentine agricultural unions and the
agricultural industry. For some time now, Monsanto has been
trying to work out a royalty payment plan for its seed
technologies that are patented in many countries, however, not
in Argentina.
The new rules will allow companies to benefit from royalties for
seven years after they are first introduced on the Argentine
market. This raises some area of uncertainty, since Monsanto has
been selling some of its GM seeds in Argentina since 1996, which
could suggest Monsanto is no longer entitled to royalty payments
for some of its genetically engineered seeds.
"It's not clear how this will apply to Monsanto," Biolcati said
to the Dow Jones International. "They have had distinct
germoplasms in the market. We'll have to see how this applies in
the case of Roundup Ready soy."
Siding in favor of agribusinesses, the government will issue
fines that total five times the original market value of the
seeds to farmers who refuse to pay royalty payments. In
addition, farmers will be allowed to save their seeds and
replant them for three years on 65 hectares worth of crop or
less. Currently, farmers can save their seeds for unlimited use,
and often re-sell their saved seeds on the market.
"Nobody is going to be completely happy with this," replied Hugo
Biolcati, vice president of Argentina's Rural Society to the Dow
Jones International. "Monsanto wasn't at the meeting and these
rules were not designed for them. They were designed for
everyone. The Secretariat has done a pretty good job of trying
to meet a number of varying interests."
Balmaceda responded similarly to the Dow Jones International,
"These rules were not designed to satisfy Monsanto. They were
designed to make sure we have an efficient system that allows
for royalties to be paid."
About a year ago, Monsanto announced it was going to stop
selling its transgenic seeds in Argentina, because there were no
laws in place regarding seed re-use. Monsanto cited
non-profitability as the reason for pulling its GM seed business
out of Argentina.
However, this proved quite costly to a country that produces a
soybean harvest, of which 95% stems from genetically modified
seeds, such as those sold under the Roundup Ready brand from
Monsanto. As a result, the Argentine government quickly stepped
in and opened talks between agribusinesses and farmers.
Monsanto devised a plan that called for a 2% per-ton licensing
fee on soybean exports, which estimates to $ 3 a ton at current
prices. Factoring in that estimates predict that Argentina will
produce 35 million tons of soybean this year, the proposed plan
would translate into slightly over $100 million in royalty
payments for Monsanto. Similar arrangements have been agreed
upon in Brazil and Paraguay. However, Argentine farmers have
vowed to not to back this plan.
Although Monsanto’s seeds are not protected by patent law in
Argentina, it has been granted patent rights in several of the
countries that buy soybeans from Argentina. If a fair solution
to royalty payments is not found, Monsanto could bring lawsuits
against Argentine soybeans once they reach their destinations.
Sources: Dow Jones
International, Reuters,
Monsanto and
Checkbiotech |