What is in this article?:
- GM rice: settlement construction and farmer options
- Pending cases
- Settlement construction
- Caps and deadlines
- $750 million settlement offered to U.S. long-grain rice farmers.
- Stems from market fall following 2006 announcement that trace GM traits found in exported U.S. rice.
- Options and settlement set-up explained.
On the settlement’s Pot One…
“The first pot is called ‘market losses.’ It’s designed to compensate all farmers who planted rice from 2006 through 2010. As we’ve established in each of the trials (through) agricultural economists, because the (GM) contamination caused us to lose the European Union market, there was less demand for U.S. long-grain rice. It’s a basic law of supply-and-demand that when there is less demand for your product, the price is lower.
“So, for every single bushel of rice sold by long-grain rice farmers from 2006 through 2010, money was lost.
“They lost less money each year as you get further away from the contamination. Our economists explained that to the juries. The reason is when you lose a big market like the EU’s 27 countries, the first couple of years it’s very difficult to make up those lost markets. But as time goes on, our rice industry is resilient and can gradually make up for losing that market.
“That’s why … the damages, the amount of money you get per acre planted, go down each year from 2006 to 2010.”
- $120 per acre for every documented acre planted in 2006.
- $80 per acre for every documented acre planted in 2007.
- $60 per acre for every documented acre planted in 2008.
- $40 per acre for every documented acre planted in 2009.
- $10 per acre for every documented acre planted in 2010.
“We stressed to Bayer it was very important that farmers be able to claim this money in an easy, efficient way. Basically, the agreement allows farmers to produce their FSA Form 578s – a government form that specifically lists how many acres of rice each farmer planted on each plot of ground for each year. Most farmers have already done this but those who haven’t need to go to their FSA office and get their 578s for each year. (Besides) a few other documents they’ll have to sign, that’s it. That’s basically how they’ll recover the money from Pot One.
“Add it all up and it’s about $310 per acre.”
On Pot Two…
“Every farmer can get Pot One money. Pot Two and Pot Three are for farmers who have losses in addition to just the market-price losses suffered when they sold their rice. Pots Two and Three are mutually exclusive – you can go into one or the other, not both.
“Pot Two was designed to compensate farmers … in a fairly easy way. The primary ‘other’ losses suffered by farmers were those who planted the two seed varieties found to be contaminated and banned from planting: Cheniere and Clearfield 131 (CL131).
“The farmers who planted those varieties in 2006 … were advised ‘we need to clean up our rice supply. We don’t want to contaminate the 2007 crop. Whatever you do, don’t plant rice on the same land where you planted Cheniere or CL131 in 2006.’
“Many took that advice and planted soybeans, let the land lay fallow or planted some other less lucrative crop. Of course, soybeans pay a lot less money on a net income basis than rice…
“For every acre you can document was planted in Cheniere or CL131 in 2006, you get $100. There are five or six ways allowed under the settlement to document that. The most prevalent will probably be through seed purchase receipts. … We have a conversion rate on how many bushels per acre are planted.”
Does this include the cost of farmers having to clean up their storage and equipment? There was a lot of recommendations that be done.
“Yes. A farmer may think ‘you know, in addition to my market losses, I lost a lot more than $100 per acre of Cheniere or CL131.’ Those farmers have the option of going into Pot Three."
For an explanation of how Pot Three money will be split between Arkansas rice farmers and those in other rice-growing states, see GM rice settlement: Arkansas benefits from extra $50 million.
“Even if they didn’t plant Cheniere or CL131 they can go into Pot Three if they have other losses. For example, some farmers who didn’t plant Clearfield in 2006 had been planning on doing so in 2007 on some of their red rice-infested land. That’s what the Clearfield varieties are for. Because CL131 was banned in 2007 – sort of at the last minute – there was a huge shortage of Clearfield seed in the spring. A lot of farmers, instead of being able to plant a Clearfield variety on their red rice land, had to plant a variety not very good on red rice land or go with a less lucrative crop…
“In Pot Three you can also recover any other type of losses you’ve suffered. Those would include the cleaning expenses or any other kind of loss you can document.
“Pot Three (claims) require quite a bit more work by farmers. They’ll have to dig through records and prove through documentation all the losses suffered.
“That documentation and claim of loss will be submitted to Bayer. If they agree, they’ll pay. If Bayer disagrees then the farmer agrees to go to binding arbitration…
“There is a Pot Three cap of $100 million. If more than $100 million in Pot Three claims are filed and determined to be valid … then, everyone’s claim will be reduced proportionally.”