Delta and Pine Land Co. said it has fully complied with all the provisions of its licensing agreements for Bollgard and Roundup Ready cotton and believes an arbitration panel requested by Monsanto Co. will confirm its position.
In its first full response to the May 20 filing of an arbitration request by Monsanto, the Scott, Miss.-based Delta and Pine Land said it has “performed its obligations under all of its agreements in good faith and has been committed to the resolution” of any disputes with Monsanto regarding its licenses for Roundup Ready and Bollgard cotton.
“We fully anticipate continuing to market seed containing Monsanto traits in 2005 and beyond, which include some of the top performing varieties in the United States,” said Tom Jagodinski, president and CEO of D&PL.
“We will continue to develop new varieties that contain Monsanto's traits including Bollgard, Roundup Ready, Bollgard II, and Roundup Ready Flex, as well as new traits from other technology providers for launch in future years. We will honor all of our obligations to our seed production partners who are currently growing seed for us this year to be marketed in the 2005 planting season.”
On May 20, Monsanto announced it was seeking the right to terminate its technology licensing agreements with Delta and Pine Land because of long-standing, unresolved business disputes. Monsanto said it had filed a request with the American Arbitration Association to end the agreements.
Delta and Pine Land and Monsanto entered into the agreements in February 1996, subsequently providing farmers with the first cotton varieties containing genes that killed lepidopterous insects when they fed on plant tissues and prevented glyphosate herbicide from destroying the plant.
“The matters submitted to arbitration by Monsanto have been the subject of an active and continuing dispute resolution process, as provided for in the subject agreements, which specify submitting such disputed issues to a panel comprised of senior managers from both companies,” Delta and Pine Land said in a statement released June 4.
“The panel of senior managers had already resolved some disputed issues, and D&PL was satisfied that the panel was making progress toward resolving the remaining matters” when Monsanto filed the arbitration request.”
The statement said D&PL has submitted its own disputed issues to the panel of senior managers and will consider its options with respect to those matters not resolved as of this date.
Jagodinski said Delta and Pine Land specifically disagrees with the issues cited by Monsanto in its May 20 press release. “They say that we didn't pay all of the royalties that were due under the 1996 agreements,” he said. “But our calculations show that we have paid everything that we owed them.
“They also claimed that we transferred their technology to a breeder who did some work for us. We haven't transferred the technology to anyone who wasn't authorized to receive it.”
A Monsanto spokesman said the company stands by its previous statements that Delta and Pine Land had not complied with the agreements.
“We had several options,” said the spokesman. “And after two years of discussions, we decided the best option was to take the dispute to arbitration. We thought this course would be the least disruptive to the cotton industry.”
Under arbitration procedures, Delta and Pine Land will have 45 days to make a formal response to Monsanto's claims. Each company will name an arbitrator and the two will name a third person to sit on the arbitration panel that will hear the case.
“We anticipate the process will be lengthy,” said Jagodinski. “They have good technology, and we have good varieties. We think it's important for farmers that they have both.”
The current agreements are scheduled to remain in effect until Nov. 4, 2018 and Jan. 16, 2018, for the Bollgard and Roundup Ready genes respectively. The statement said D&PL has the right to cancel the licenses after Oct. 11, 2008, but that the company has “every intention to continue to operate under the licenses.”
“We intend to continue our commitment to the U.S. cotton grower to provide the best cotton varieties and the best transgenic technology, bringing value to the farm and to the cotton industry at large,” Jagodinski said.
D&PL has been breeding, developing and selling cottonseed to farmers since soon after it was established by a group of British investors in 1911.
“During those nine decades, Delta and Pine Land has consistently brought to cotton producers superior performing varieties in high quality seed with new and innovative genetics, focusing on high yield potential and improved fiber quality,” the statement said.
USDA estimates that D&PL varieties were planted on more than 60 percent of the total acreage in the United States and more than 70 percent of the acreage planted east of Texas in 2003.