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Monsanta, Argentina reach agreement on soybean royalties

Monsanta, Argentina reach agreement on soybean royalties

Argentine Seed Institute will oversee detection of crops grown illicitly from Intacta soybean seeds.

by Pablo Gonzalez

Monsanto Co. agreed to allow Argentina to help collect soybean royalty payments, according to two people with knowledge of the situation, a deal that may hasten the end of a lengthy dispute between the U.S. seed company and farmers in one of the world’s biggest agricultural exporters.

Related: Monsanto said to reject Argentina request in seed dispute

The accord may lead to a cultural shift for farmers in the world’s third-largest soybean exporter who generally avoid paying royalties and instead use GMO seeds saved from previous harvests or purchased from non-registered suppliers. (Photo: keattikorn/Thinkstock)

St. Louis-based Monsanto also agreed to give the government full control of the testing of soybean cargoes, according to the people, who asked not be identified because the accord hasn’t yet been signed. The Argentine Seed Institute, also known by its Spanish acronym Inase, will oversee the detection of crops grown illicitly from Monsanto’s Intacta genetically modified soybean seeds, the people said.

The accord may lead to a cultural shift for farmers in the world’s third-largest soybean exporter who generally avoid paying royalties and instead use GMO seeds saved from previous harvests or purchased from non-registered suppliers.

Monsanto said last month it was reviewing the future of its business in Argentina. That announcement followed a government resolution in April that gave it control of the soybean testing, a setback for the company, which had been funding the network of laboratories doing the work.

Test results

Under the accord between Monsanto and the government, Inase will delegate testing to several grain exchanges, but mainly the Rosario Grain Exchange, the people said. The port city of Rosario is the departure point for about 85 percent of Argentine soybeans.

Among the details still to be discussed is how fast Monsanto will learn about test results showing Intacta seed was used without permission, the people said. Until now, the Monsanto-funded Rosario lab has sent positive tests to the company in real time.

“Monsanto remains committed to dialogue with the government in order to find a mutually agreeable solution,” the company said Wednesday in an e-mailed statement. In a separate statement, the Agribusiness Ministry said it was cautious about providing more information and would say only that there’s "goodwill from both parties to hammer out a deal."

With 72 percent of its current season soybean crop harvested, Argentina is expected to produce 56 million metric tons this season. The U.S. and Brazil are the world’s largest growers of the crop.

Related: Argentina says Monsanto Intacta soybean patent may take months

To contact the reporter on this story:

Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net

To contact the editors responsible for this story:

Simon Casey at scasey4@bloomberg.net

Robin Saponar

© 2016 Bloomberg L.P

TAGS: Soybean
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