South America Calling
Alastair Stewart South America Correspondent

Thursday 10/18/12

Brazilian Farmers Battle Over Monsanto RR Royalties

Brazil's Soybean Producers Association (APROSOJA) late Wednesday issued a statement encouraging all state farm associations to bring legal action against U.S. biotech company Monsanto over the incorrect charging of royalties on first generation Roundup Ready soybeans.

The advice comes after soybean farmers in Mato Grosso, the No. 1 producing state, and Rio Grande do Sul, the No. 3 state, obtained key court decisions against the St. Louis-based company's Roundup Ready royalties policy.

Last week, a Mato Grosso court temporarily suspended the payment of royalties on Roundup Ready seeds in the state, upholding an injunction brought by the state's agricultural farm federation that argued the relevant patents had run out in October 2010.

The court must still give a final ruling and Monsanto has vowed to fight its position that the patent lasts till 2014. But, after losing an appeal against the injunction, on Wednesday Monsanto announced it would drop royalty charges across Brazil until further notice.

Brazilian farmers pay royalties at 2% on seeds sales, or at around 3% on the subsequently harvested produce.

A final ruling against Monsanto would open the way for farmers to sue for the royalties paid over the last two years.

Just as big was an April decision by a court in the southern city of Porto Alegre that farmers in Rio Grande do Sul don't have to pay royalties on seeds replanted from their own crop harvested the year before. The judge also ruled that royalties charged on such seeds since 2003/04 should be returned.

Monsanto is appealing the decision and, again, we await a final ruling, but the stakes in this legal battle were raised in July when the Supreme Appeals Court (STJ), Brazil's second highest court, said the Porto Alegre court's final sentence would apply across Brazil.

The case straddles two contradictory laws. One recognizes the prevalence of international patents and another allows farmers, especially small farmers, to use their crop as seed without paying the original seed provider.

Farm leaders claim the decision involves royalties of $7.5 billion. That may be an exaggeration but a lot of own use and pirated seeds are employed across Brazil. The Brazilian Seed Association (ABRASEM) estimates 36% of soybean seeds used in 2010 weren't certified.

Monsanto argues that they have obtained numerous previous Brazilian court rulings that upheld their right to charge royalties and say it remains confident it will ultimately win these legal battles, and any others that may arise. Watch this space.


Posted at 1:47PM CDT 10/18/12 by Alastair Stewart
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