After six years of failure in trying to register its Roundup Ready soybeans in Brazil, Monsanto has decided to try a different tack: It's seeking compensation from grain companies shipping the genetically enhanced, illegally grown soybeans.
Government officials estimate that from 8 percent to 22 percent of Brazil's just-harvested soybean crop was planted in Roundup Ready soybeans. In the southern state of Rio Grande do Sul, they say, up to 70 percent of the 2002/03 crop could have been Roundup Ready.
Most of the seed for those crops was sold on the black market or saved from previous harvests, meaning Monsanto received no return from Brazilian farmers on the billions of dollars it spent developing the technology. But the St. Louis-based company plans to change that situation.
“Starting with this year's harvest in Brazil, we intend to implement a program that will allow us to obtain fair value for the use of our technology in the future in Brazil and be fair to Brazilian growers who want to use our technology,” says Carl Casale, vice president for Monsanto's North American Agricultural Business.
“Our plan will allow the export of Roundup Ready soybeans from Brazil by those who choose to execute an agreement acknowledging our intellectual property rights; the terms of the agreement will provide fair compensation to Monsanto for the use of its technology.”
Speaking at a Senate hearing in Washington last month, Casale said the planting of Roundup Ready soybeans in Brazil has been one of the worst-kept secrets in the world oilseed markets.
“As you are aware, our technology is being used illegally in Brazil and, as a result, Brazilian growers are enjoying the advantages of the technology without paying for it. U.S. growers are rightly concerned about this, and I can assure you that we at Monsanto are working hard to address this problem.”
Casale said Monsanto received approval to conduct its first field test of Roundup Ready soybeans in Brazil in February 1997. Based on the results of those studies, the company applied to CTNBio, Brazil's regulatory agency for biotechnology products, for full approval of the sale of Roundup Ready soybeans.
CTNBio, the Portuguese abbreviation for the Brazilian Biosafety Commission, granted Monsanto's request in September 1998. Almost immediately, environmental groups opposed to biotechnology filed lawsuits challenging the authority of the government to issue the approval.
In 1999, a Brazilian court issued an injunction suspending the CTNBio approval, pending a resolution of the lawsuits, and appellate court rulings in June and September 2000 denied Monsanto's request to remove the injunction.
“In December 2000, then-President Cardoso issued a Provisional Measure restating the Biosafety Commission's authority to approve products and reaffirming all past approvals,” says Casale. “In mid-2001, the federal government asked for an expedited decision at the Appellate Court.”
Late in 2001, the president of the Appellate Court assigned the case to a panel of three judges for a final decision. Two months later, the lead judge on the panel issued an opinion stating that the law giving CTNBio authority to approve Roundup Ready soybeans was constitutional and voted to cancel the pending injunctions.
To date, the other two judges have not yet issued their opinions. Casale said he would not want to speculate about why they judges have failed to act.
“The reality is that the illegal use of Roundup Ready soybeans by Brazilian farmers continues to grow at a steady rate,” he noted, “while the Brazilian government has not acted to approve their use.”
Ironically, the Brazilian government had to issue safety certificates for Roundup Ready soybeans to the Chinese government in February, although Roundup Ready soybeans cannot be legally grown in Brazil
“Both the Brazilian ministers of agriculture and health have issued certificates for Roundup Ready soybeans, certifying they are safe for human and animal consumption,” said Casale. “More recently, President Lula issued a provisional measure that legalized biotech soybean sales harvested this growing season for sale as grain only for domestic uses or exports.”
For the past two years, Monsanto has conducted extensive advertising campaigns and educational programs to inform growers that their government had not approved the technology while urging the government to take action to stop illegal use.
“To date, Brazil has not been willing or able to provide regulatory approval for technology,” he said. “At the same time, it has not provided recognition for Monsanto's intellectual property rights or enforcement to protect those rights.”
Casale said that international grain exporters/importers are being asked to purchase licenses from Monsanto if the soybeans they are shipping from Brazil include above-threshold quantities of Roundup Ready soybeans. Traders who elect not to secure a license will be subject to enforcement actions.
In recent weeks, Monsanto has sent letters to 250 exporters that buy Brazilian soybeans and 150 importers, advising them the company will begin monitoring shipments from Brazil this month. Shipments with above-threshold levels of genetically altered soybeans can be impounded or sent back to Brazil.
“We have pledged to work in partnership with these grain traders and to make every effort possible to address their concerns about the program and its implementation,” he noted. “We know how much the American grower is counting on all of us to work together to address this issue.”
While Brazilian farmers may be profiting from using the Monsanto technology without paying for, in the long-term, the failure of their government to recognize intellectual property rights will put them at a disadvantage, according to Casale.
“Because it is impossible for Monsanto to contemplate bringing other biotechnology products to Brazil until these issues are resolved, Brazil may miss a greater opportunity to participate in innovative technologies that can bring environmental, production and financial benefits to their growers.”
Monsanto is currently researching a promising oilseed crop that could produce a vegetable oil enriched with Omega-3 fatty acids. An Omega-3-enriched oil could ultimately provide consumers with a new solution to fight heart disease.
“This is but one example of how biotechnology can add value enhancements to crops,” he told the senators. “But without protection for our intellectual property rights and support for the approval of our products in Brazil, Monsanto cannot continue to bring new technology products to that country.”
In an interview, Casale said Brazilian farmers and other growers in South America have already missed out on new technology that could have provided significant benefits to their soybean operations.
“We developed Bt soybeans for the Latin America market because of the greater problem they have with lepidopterous insects,” he said. “But we decided to shelve the technology because of our experience with Roundup Ready soybeans. This move was not designed to punish the Brazilians — it's just the reality of the situation we faced with the regulatory environment there.”