Monsanto, Argentina Battle Over Rights To GMO Seeds

by Marcela Valente

(IPS) BUENOS AIRES -- The unprecedented expansion of transgenic soy in Argentina, which has become the country's leading export, has triggered a heated controversy between seed-patent owners and farmers who defend their right to save and replant seeds without paying additional royalties.

The government is attempting to arbitrate in the search for an agreement that takes into account the interests of all sides.

In the meantime, black market sales of genetically modified (GM) soybean seeds continue to grow, and biotech giant Monsanto decided to suspend sales of the seeds in Argentina, the world's third-largest producer of soy.

The U.S.-based transnational corporation also called off all further research and development on new varieties of GM soy specifically adapted to local conditions in this South American country.

The area planted in soy in Argentina has grown more than 100 percent over the past five years, since the introduction of Monsanto's Roundup Ready soy, which is genetically engineered to resist damages from the herbicide glyphosate (Roundup).

An increase in international demand for soybeans and rising international prices gave an additional boost to soy production in Argentina over the past two years.

An exemption contained in Argentina's 1973 "seed law" originally designed to protect small farmers recognizes the right of farmers to cull seeds for replanting in the case of self-fertilizing plants like soy or wheat.

Soybean seeds can be culled and re-used without causing any significant decline in harvest yields, unlike GM sunflowers and sorghum, whose seeds must be purchased every year.

The "seed law" is interpreted to mean that farmers only have to pay royalties on the original purchase of GM seeds, but not when they replant seeds that have been culled and saved.

The right to save seeds for the next harvest is recognized in most countries around the world since the days prior to the boom in development of GM crops.

But in some countries, the proportion of land on which farmers can plant crops using seeds culled from their own harvests is limited.

That is the case of the European Union, the model followed by Argentina's Secretariat of Agriculture, which argues the need to curb the spread of seeds that have not been purchased from authorized dealers.

Monsanto Argentina announced in mid-January that it had suspended sales of GM soybean seeds due to the increase in illegal seed sales, on which no royalties are paid.

The company complains that not only are farmers culling GM soybean seeds for their own use, but are also selling them on the black market.

According to estimates by the Secretariat of Agriculture, 20 percent of the total area planted in soybeans in Argentina is sown with seeds purchased from authorized dealers; 30 percent with seeds saved by farmers for their own use; and the remaining 50 percent with seeds culled and sold illegally.

In Argentina, Monsanto was the second-largest seller of GM soybean seeds after the Netherlands-based Nidera Handelscompagnie B.V., which has a corner on 58 percent of the market. The other major dealers are the Argentine companies Asociados Don Mario and Relmo.

Executives with the remaining dealers said their companies might follow Monsanto's lead if the government fails to effectively combat the illegal seed sales.

Fernanda Gonz‡lez with the Argentine Association for the Protection of New Varieties of Plants (ARPOV), which represents seed-patent owners, told IPS that the problem does not lie in the right of farmers to save seeds for replanting, but in the illegal sales of culled GM seeds.

She pointed out that with one and a half bags of seeds purchased from an authorized dealer and planted on one hectare of land, a farmer obtains a yield of three tons of soybeans as well as 60 bags of new seeds for planting another 40 hectares.

"Given that multiplication of seeds, it is not in the seed companies' interests to continue investing in R&D" on new varieties of plants, she argued.

In each purchase of seeds, ARPOV has begun to require that farmers sign a contract for "extended royalties", which obligates farmers to make an additional payment on the value of seeds saved for replanting, and to report how the rest of the seeds will be used.

With the assistance of a consultancy firm hired to that end, authorized seed dealers pressure farmers by means of lengthy interrogations and inspections in the fields, and send intimidating letters to demand explanations on how they have used the GM seeds obtained in their harvests.

Farmers are opposed to the "extended royalties" contracts and to inspections of their fields, which they see as verging on the illegal. They also protest that such practices trample their longstanding right to save seeds for re-use.

But Gonz‡lez complained that "the problem is that when the 'seed law' was passed, and the concept of the right to save and replant seeds was established, the lawmakers had small farmers in mind, not powerful agribusiness producers farming 500,000 hectares and making big profits off the investments that others have made in biotechnology."

In an interview with IPS, agricultural engineer Bernardo Laurel, the secretary of Rural Confederations of Argentina, said the country's farmers are defending their right to save and replant their own seeds, but that they are opposed to the illegal trade in seeds.

Under Argentine law, surplus seeds can legally be sold for producing flour or meal, or for export. But Laurel acknowledged that some farmers also illegally sell culled seeds for replanting by other farmers. Seed dealers say the "extended royalties" contracts are aimed at combating only illegal sales of saved seeds.

"In Europe, around 70 percent of the seeds planted have been purchased from authorized dealers, while here that proportion is less than 20 percent," said Laurel. "The rest includes seeds that were culled and legally saved for the farmer's own use, as well as seeds sold on the black market, which reduces the motivation of seed companies for investing in R&D."

The Argentine Agrarian Federation, which represents small and medium farmers, mainly soybean producers, also defends the right to replant saved seeds, and insists that it is not the Federation's members who are illegally selling seeds.

"You need a big structure for that," Jorge Solmi, the head of the Federation's Buenos Aires office, commented to IPS.

The international environmental watchdog Greenpeace, which accuses Monsanto of using the threat of pulling out of Argentina to "blackmail" the government into approving the planting of transgenic corn, agrees that it is not the small farmers who are selling seeds on the black market, because they do not have the warehouses needed for the selection and storage of seeds.

Solmi admitted, however, that some farmers do find it profitable to sell culled seeds to cooperatives, neighboring farmers or seed collectors, thus washing their hands of the final use given to the seeds.

Culled seeds sold for replanting fetch twice the price of seeds that go towards the production of soybean meal or oil.

Laurel agreed that the patent rights of those who invest in biotechnology should be respected. But in his view, the growth of the black market for GM seeds is not the responsibility of farmers, but of the state, due to the lack of necessary controls and enforcement procedures.

The National Seed Institute (INASE), in charge of overseeing seed production and sales and guaranteeing the transparency of the sector, was closed down in 2000. Since then, illegal seed sales have spiralled out of hand.

The Secretariat of Agriculture decided to reopen the Institute and seek an in-depth solution to the problem.

The state loses an estimated $62 million a year due to the illegal sales of soybean and wheat seeds, according to a study by ARPOV that focused on the evasion of tax and other payments to state coffers.

INASE official M—nica Peque–o told IPS that Argentina's "seed law" has "excellent" foundations, and provides a legal framework that is continuously updated by regulatory decrees as new challenges arise in the fields of agriculture and biotechnology.

Peque–o said the possibility of drafting a bill on "global royalties" is currently being studied. The new law would levy a sales tax on bags of seeds, to create a fund that would be proportionally divided between companies that own seed patents. The fund would be administered by the Secretariat of Agriculture.

Although seed companies accept the proposal, because it upholds the spirit of protecting intellectual property, farmers are opposed to it, rejecting any new tax, as well as any mechanism that threatens the right to save seeds for replanting.

The Secretariat of Agriculture is also studying the possibility of adhering to the 1991 act of the International Convention for the Protection of New Varieties of Plants, as seed companies are demanding.

The Convention protects seed-patent holders because it forces farmers to report how seeds obtained in their harvests were used.

Argentina is currently a signatory to the 1978 act of the Convention, which provides strong protection for the right of farmers to save and replant seeds, and exempts them from providing explanations on how culled seeds were used.

But the 1978 version of the treaty predates the biotechnology revolution, and many small and medium farmers realize that they are facing serious risks of losing the battle for farmers' rights to re-use seeds.