By Robert Derham, Checkbiotech

As the use of genetically modified soy grows in Brazilian, so have the negotiations from agribusinesses to raise the seed prices.

On Tuesday and Wednesday, companies met with Brazilian farmers and officials to discuss seed prices for the use of genetically modified soy.

During the National Confederation of Agriculture (CNA) meetings, companies informed farmers and cooperatives they would like to receive R$ 0.88 ($1 = R$ 2.33) per kilogram from sales its genetically modified (GM) soybeans.

The purpose of the meetings was to reach an agreement on royalty payments for 2005/06 crop planting, but so far a solution is not in sight.

“We had planned to reach an agreement, but this still hasn’t happened,” said CNA vice-president Carlos Sperotto.

The offer from Monsanto was nothing new for Brazilian farmers. A similar price was suggested back in June and July of this year.

Commenting on the price increase, a Monsanto official told Reuters, "Given the gains that this technology has shown, it's a return of four times the amount invested by the farmer."

However, Carlos Sperotto, vice-president of the Brazilian Agriculture and Ranching Confederation told reporters, "Farmers want to pay when they have the beans in their hands, not before the harvest."

Due to a lack of government subsidies that many western countries enjoy, many Brazilian farmers are hesitant to pay a premium price out of fear from environmental elements such as drought and flooding, which would leave them empty handed.

However, Brazilian farmers do understand and appreciate the value of Roundup Ready soy. As of last year, negotiations led to a post-harvest royalty payment of two percent in some regions of Brazil.

Yet, farmers argue that a seed price increase would only encourage illegal black market trading of transgenic soy, because illegal seed prices could be obtained for about half the proposed price.

Black markets for GM soy flourish in many south American country, including Brazil. Estimates have pinned total harvest figures stemming from GM soy ranges to as high as 90 percent – much of which is harvested from illegal seeds.

Although Monsanto’s name attracts most of the attention during these ongoing negotiations with Brazil, revenue from a price increase would be shared across a field of companies that also have an invested interest.

Some of the interested Brazilian companies that stand to gain from a price increase are Embrapa, Coodetec and the Mato Grosso Foundation, which all have genetically engineered seed varieties and distribute them under license in Brazil.

Talks between Brazilian farmers and companies are expected to continue, with the hope that an agreement can be reached soon.

Sources: Reuters and AE Brazil