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Corn+Soybean Digest

Tech Fees Fund Future Research

Seed improvement research costs money, and companies that conduct research need a way to get paid for their discoveries.

That's the justification behind seed technology fees collected from farmers by companies that hold patents on transgenic crops. And it's the reason why farmers will continue to pay extra for the technology if they want to plant Bt corn.

Some companies include the technology fee in their seed price, while others (mostly those selling hybrids with Monsanto's YieldGard gene) price the seed and technology separately.

Dan Holman, Monsanto communications director for Bt corn, says the reason for the separate technology fee on Bt corn is that the company was not heavily in the seed business when the Bt gene was developed.

Even though Monsanto now owns Asgrow and is in the process of buying Dekalb, Holman says the separate technology fee will remain.

"Our strategy is broad licensing of the technology to a number of seed companies. We believe this is best for farmers, since it will allow more to use it."

"Since all we really have to show for our corn Bt research is the technology, this allows us a return," Holman continues. "Most of the technology fees we receive are plowed back into research and development of new products we hope will continue to improve pest management for farmers."

The premium or technology fee that farmers pay for seed with the Bt gene is based on the value of the product to the farmer, says Scott Erickson, Pioneer corn product marketing director.

Holman notes that technology fees or premiums for Bt seed are generally less than the cost of scouting and applying a pesticide for European corn borer control. At the same time, control from pesticides is generally not as good as that from the Bt gene.

This fee, in most cases, has been roughly $30/bag, or $10/acre for corn. Monsanto recently announced that the YieldGard technology fee will drop to $24/bag for 1999, or about $8/acre. The tech fee for AgrEvo's StarLink Bt, available from Garst, will also be $24/bag.

Additional fees aside, growers also sign an agreement to plant a portion of their corn ground to non-Bt hybrids. This establishes a refuge in which corn borers can survive. The industry is working to provide a solution to meet grower needs regarding refuges.

Seed companies selling Bt corn are required to educate growers on the need for corn borer refuges. But some growers are inclined to plant all their corn acres to Bt and let the neighbor's field be the refuge.

If everybody does that though, there is a fear that any corn borers that survive may be resistant to the strain of Bt used in the corn. If surviving insects mate, a new strain of Bt-resistant corn borers might develop.

"It's imperative that growers uphold their agreement to maintain a non-Bt corn refuge if they want to have this technology to use in the future," says Erickson at Pioneer.

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