Argentine Soybean Tangle

By TAOS TURNER

MONSANTO, THE LEADING producer of genetically modified plant seed,
is having trouble in tango territory.

The St. Louis-based company has spent the past decade watching
Argentine farmers embrace one of its premier products, Roundup Ready
soybeans.

The seeds are herbicide-resistant, so by using them farmers can easily
ill weeds to boost yields and profit margins. Argentine soybean output
has tripled to !" million metric tons since #""$, when %onsanto
&'(uotes'main.html)symbol*%+,- .ticer/ %+,0 started selling
Roundup Ready in Argentina and the 1.S. Argentina is now the world2s
,o. ! soybean producer and e3porter and the ,o. 4 modified-crop
producer.

5ronically, however, revenue from Roundup Ready has evaporated.
Around "67 of Argentine soybeans are Roundup Ready, but each year
fewer farmers pay %onsanto royalties. The company says that it received
royalties on 8ust #97 of the Roundup Ready crop planted this season in
Argentina, costing it millions of dollars in lost revenue.

5n the 1.S., where Roundup Ready accounts for about "#7 of soybeans,
%onsanto gets paid via sales at more than 4:: seed companies. ;These
companies pay %onsanto a royalty when growers purchase their seed,;
says %onsanto spoeswoman Lori <isher. ;=undreds of thousands of
farmers have signed agreements since #""$ to use %onsanto2s
technology, and growers understand that they may only benefit from the
technology for the season for which they are purchasing their seed.;

Argentina lacs such accords. %oreover, because the seeds reproduce
each season, farmers can replant them without paying the royalties. 1.S.
law prohibits this> Argentina2s doesn2t.

%eanwhile, %onsanto has been unable to patent Roundup Ready in
Argentina, as it has elsewhere. So, early last year, %onsanto stopped
selling Roundup Ready in Argentina. That spurred heated debate among
farmers and public officials and led to multiparty tals to solve the
problem.

=owever, negotiations achieved little, so %onsanto began playing
hardball. This year, it told Argentine e3porters it would see a ?#6 per-
ton fee on soybean shipments to compensate for unpaid royalties. The
fee would be collected on e3ports to countries recogni@ing %onsanto2s
patent.

This infuriated farmers, who assumed they would end up paying the fee.
<arm groups called %onsanto a greedy monopoly, and Argentina2s
Agriculture Secretary %iguel Aampos, slammed the multinational for its
;thug-lie attitude.; =e said %onsanto was betraying a nation that has
long been a ;strategic ally of biotechnology.;



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Last month, %onsanto dropped a bombshell by confirming it had filed
lawsuits in Denmar and =olland over soybean shipments to those
countries. Aampos reacted angrily and called %onsanto ;a national
embarrassment.; Argentina e3ported ?#.$ billion of soybean products to
the Guropean 1nion in 4::B.

The Gconomy %inistry, which oversees the Agriculture Secretariat, is also
concerned. 5t collects some ?4 billion annually from soybean e3port ta3es
and doesn2t want trouble. And with congressional elections in +ctober,
government officials don2t want to alienate farmers, who are already
upset about high e3port ta3es.



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Aampos says Argentina will participate as a third party in the lawsuits and
that it will prevail in court. =owever, another Argentine official familiar
with the issue says %onsanto has the upper hand. 5n the end, G.1. buyers
will as Argentine e3porters to bear additional import costs, and these
will be passed onto farmers. %onsanto, the official says, will eventually
get its royalties. 5t2s unclear how much %onsanto might collect. 5f recent
agreements between %onsanto and farmers in Bra@il and Haraguay are
any guide, Argentines could end up paying around ?!-to-?6 a ton.

=owever, the problem could still be resolved without G.1. courts, which
could tae years to settle the issue. ;Ie e3pect to get an agreement,;
says <ederico +ve8ero, a spoesman for %onsanto Argentina. %eanwhile,
investors, other biotech firms, and farmers in neighboring Bra@il and
Haraguay, where %onsanto has been negotiating similar deals, are
watching to see what happens.

CRUDE OIL *RICES ROSE <riday after a volatile wee mared by
%ideast terror fears and a production outage in Andean producer Gcuador.
,ew Jor %ercantile G3change September crude oil rallied ?4.:9, to
?$6.!6 a barrel.



TA+S T1R,GR is a reporter for Dow Eones ,ewswires in Buenos Aires