South America Calling

Brazil's Intacta Impasse Continues

With harvest just one month away, U.S. biotech giant Monsanto and the majority of Brazilian soy purchasers remain in dispute over the collection of royalties on Intacta RR2 Pro soybeans.

The St. Louis-based seed firm wants soybean crushers and exporters to collect royalties on its new genetically engineered soybean technology, which is present in 20% to 25% of the current crop.

Back in September, the two parties reached a framework agreement for buyer collection but there is a deadlock over fees, Carlo Lovatelli, president of the Brazilian Soy Industry Association (Abiove) said Tuesday.

He explained that Monsanto is negotiating with each individual company but that Abiove had set a guideline of fee for its members, which buy 80% of Brazil's soybeans.

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"At the moment, Monsanto is not offering anywhere near enough to cover the costs of collection," said Lovatelli.

In Brazil, reusing seeds is common and it is easy for farmers to avoid paying royalties in subsequent seasons after an initial purchase. The easiest way to collect is for the trading firms to charge on purchase.

Buyers collected royalties on first-generation Roundup Ready beans after threats that cargoes could be embargoed at European ports for piracy. But that action came in the context of widespread illicit use of Roundup Ready in Brazil's south ahead of the technology's official introduction in 2005.

"The situation is different now and we want to be paid properly for offering this service to Monsanto," the executive said.

Despite the impasse, Lovatelli said the industry would not likely refuse to accept Intacta beans come February, saying he was hopeful of an agreement before then.

Brazil is the world's No. 2 soybean producer and expected to produce between 91 and 96 million metric tons this season.

Monsanto charges up to R$115 per hectare ($17 per acre) for the use of Intacta in Brazil.

The company said it has closed collection agreements with some trading companies But none of the big companies have signed, said Lovatelli.

(CZ)

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