South America Calling
Alastair Stewart South America Correspondent

Tuesday 09/04/12

Aprosoja's Worried About China RR2 Imbroglio

Wind the clock back eight years and Brazil's soybean industry was collectively tearing its hair out after China turned away a series of its soy cargoes due to fungicide contamination.

At first came the indignation. Brazilian exporters complained the claims were bogus, a ruse to return unwanted beans. Then came the wider realization that they would have to suck it up as Brazil now depended on China for soy sales in the same way the Middle Kingdom depended on it for supplies.

Fast-forward to the present day and the relationship between Brazilian farmers and Chinese crushers is much better, but the specter of Chinese rejection is once again worrying people here.

In a statement released Monday, the Mato Grosso Soybean and Corn Producers Association (APROSOJA) implored farmers not to plant Monsanto's new soybeans Intacta RR2 Pro in the upcoming 2012-13 season for fear that they will contaminate shipments to China, causing authorities there to once again return them. Brazil has approved the new pest-resistant seeds for planting but China hasn't approved them for consumption.

Monsanto hasn't launched the seeds commercially in Brazil but it did run tests at 500 properties last year and has committed to expand the testing this year. APROSOJA's big problem is with the size of that expansion. According to Carlos Favaro, APROSOJAs president, the concern is that Monsanto will look to plant increase 'test area' from around 1,000 hectares (2,470 acres) last season to as much as 500,000 hectares (1.2 million acres) next year, effectively rolling out the seeds on the local market unofficially.

Contractually, farmers who participated in the tests are obliged to destroy the RR2 Pro beans after harvest. But APROSOJA is worried that, in practice, Monsanto is promoting the sale of RR2 Pro beans.

"Even with all the control and monitoring mechanisms proposed by Monsanto, we still see an enormous risk that the Intacta RR2 Pro variety of soybean seeds will be introduced on the Brazilian market, " said the APROSOJA statement.

According to APROSOJA, the Brazilian Vegetable Oils Industry Association (ABIOVE) is also concerned exporters won't have the means to spot contamination, especially since a record crop is expected and infrastructure will be stretched to the limit.

What makes this so risky for farmers, according to APROSOJA, is that in order to plant the RR2 Pro, they must sign a contract that puts all responsibility for subsequent contamination of  on the producer.

So, in theory, if a cargo is rejected in China, the farmer is liable for costs and damages that could ruin him or her.

As such, APROSOJA recommends that producers take no risks and don't take part in this year's tests of RR2 Pro.

Monsanto have yet to react to the statement, merely reconfirming that they plan to expand testing in 2012-13.

Posted at 5:44AM CDT 09/04/12 by Alastair Stewart
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