MSGA/ASA Address Illegal Piracy of Soybean Technology by Brazilian Farmers

To promote a more equitable playing field for U. S. soybean producers, the American Soybean Association, along with the Minnesota Soybean Growers Association, is urging international grain and oilseed traders to adopt a new royalty collection system for exports of Brazilian soybeans and soybean meal derived from illegally obtained Roundup Ready? Soybean (RRSB) seed. Brazilian farmers presently have an unfair competitive advantage over U.S. farmers in the global soybean market because they are receiving all of the cost saving and yield enhancing benefits of Monsanto's Roundup Ready soybeans without paying for the right to use the technology. U.S. growers a paying are premium of $9.30 to $15.50 per acre for Roundup Ready Soybean seed, while Brazilian growers are paying nothing for the technology on seed smuggled into Brazil, thus giving Brazilian growers an ill-gotten competitive advantage over U.S. growers. This translates into a 24 to 41 cent-per-bushel unfair competitive advantage over U.S. growers and soy exporters.

"ASA has long been concerned about the theft of Roundup Ready soybean technology in Brazil because of the competitive advantage this illegal use gives Brazilian growers over U. S. growers who are paying to use the technology," said Gary Joachim, a soybean farmer from Claremont and member of the ASA and MSGA Boards of Directors. "Since the Brazilian government has been unable or unwilling to stop the piracy of Roundup Ready soybean seed, ASA has repeatedly urged Monsanto to do something to correct this inequity."

Following numerous discussions with Monsanto over the past year, ASA leaders recently learned from company officials about Monsanto's plans to implement a royalty collection system based upon the enforceability of intellectual property rights in the European Union, Japan, and other countries where Monsanto has patent protection.

"It's ASA's position that the program outlined is a giant step forward toward leveling the playing field for U.S. soybean producers," said Joachim. "Although it is not a perfect solution, the program does present a viable option given the lack of planting authorization in Brazil, which currently prevents Monsanto from collecting royalties on its patented seed."

ASA is supporting the royalty collection system announced by Monsanto. Under the system, Monsanto will not be able to collect royalties on soybeans grown in Brazil for domestic consumption, which represent about 25 to 30 percent of total Brazilian production, until RRSB is legalized for planting by the Government of Brazil, nor on soybeans destined for export to countries like China that do not currently enforce patent protection for seed technology.

Implementation of the program is set for July 1, 2003, to give the Government of Brazil, Brazilian farmers and Brazilian soy processors and traders advance notice prior to planting and pre-planting commercialization contracts between growers and traders for the 2003/2004 Brazilian crop. The source of the funds paid to Monsanto, ultimately, will be generated from the discounted prices paid to Brazilian producers who deliver soybeans grown from RRSB seed.

"Not cooperating in the implementation of the royalty collection system perpetuates the competitive disadvantage U.S. growers and the entire U.S. soy industry face because of the ongoing theft of Roundup Ready technology by some Brazilian farmers," said Joachim. "In addition, traders and processors who do not cooperate will be assisting in the continued piracy of a patented product, and confronted with inspection and testing for the presence of RRSB in Brazilian shipments arriving in the European Union, Japan and other countries where Monsanto has patent protection and can utilize its legal patent status."