Source: Dow Jones Newswire via OsterDowJones Commodity Wire via Checkbiotech.org

Monsanto is negotiating with Paraguayan farmers over the creation of a payment system that would allow the company to collect royalties on its genetically modified soybean seeds.

Paraguayan officials say the government soon will approve the use of the seeds.

Monsanto, the U.S-based agricultural business giant, already sells similar seeds, known as Round Up Ready soy, in other countries, including neighboring Argentina. Monsanto Argentina is leading the negotiations, Paraguayan officials say.

"Monsanto is negotiating with farm groups over the royalties," said Estela Ojera, director of the Paraguay's National Seed Office. "Once an agreement is reached, I imagine the Minister (of Agriculture) will sign a resolution approving use of the seeds."

Monsanto Argentina officials would not comment.

Ojera said her office has recommended the approval of four varieties of seeds. Paraguayan farmers already use a wide variety of modified soy seeds, but doing so is against the law and Monsanto receives no royalties for them.

An Agriculture Ministry official had told Dow Jones Newswires that the ministry would approve use of the seeds by Aug. 16. But approval has been delayed until Monsanto and farm groups sign a deal over royalties.

Paraguay produced 4.5 million metric tons of 2003-04 soybeans, according to the Foreign Agricultural Service of the U.S. Department of Agriculture. Paraguay exports most of its production, according to the USDA.

The average yield last year averaged 2.9 metric tons per hectare. Analysts expect this to increase as farmers begin to use better seed technology.

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