Monsanto May Be Forced To Repay Brazilian GM Soybean Royalties Worth Billions Of Dollars

from the that's-gonna-hurt dept

When the history of modern Brazil comes to be written, a special place will be reserved for the soybean, the powerful farmers that grow it — and the deforestation it is driving. And at the center of that tale will be Monsanto, with its patented “Roundup Ready” crop, so called because it has been genetically modified to withstand the herbicide glyphosate, marketed as Roundup.

A recent news story in Nature sketches the twists and turns of that fascinating tale. For example, how the growing of GM soybeans was only legalized in 2005 when it turned out that three-quarters of the crops growing in the southern state of Rio Grande do Sul were already using Monsanto’s GM soybeans. Apparently, these had been smuggled in from Argentina. Monsanto claims that many soybeans still are, and uses this as a justification to impose an unusual levy on Brazilian soybean farmers:

Since the legalization, Monsanto has charged Brazilian farmers 2% of their sales of Roundup Ready soya beans, which now account for an estimated 85% of the nation’s soya-bean crop. The company also tests Brazilian soya beans that are sold as non-GM — if they turn out to be Roundup Ready, the company charges the farmers responsible for the crops some 3% of their sales.

One way soybeans sold as non-GM can turn out to be the Roundup Ready variety is thanks to wind-borne GM pollen landing on non-GM crops. And yet instead of being penalized for contaminating non-GM crops, Monsanto gets paid for it — a neat trick made possible by a crazy patent system in which even those who commit infringement unintentionally are still held liable.

Brazil is now the world’s second-largest producer of GM crops (after the US), and most of them are soybeans, so this levy resulted in huge additional profits for the company down the years — and much resentment from the farmers. This led to a legal challenge being mounted in 2009 by a consortium of farming syndicates in the Rio Grande do Sul state. Earlier this year, this was successful, not least because the key patents had expired:

Giovanni Conti, a judge in Rio Grande do Sul, decided that Monsanto’s levy was illegal, noting that the patents relating to Roundup Ready soya beans have already expired in Brazil. He ordered Monsanto to stop collecting royalties, and return those collected since 2004 — or pay back a minimum of US$2 billion.

Monsanto naturally appealed, and also lodged a further legal action with the Brazilian Supreme Court. But instead of overturning the lower court’s judgment, as Monsanto requested, the Supreme Court has now said that whatever the result of the appeal, it should be applied to the whole country. If the appeal court rules against Monsanto, it would represent a disastrously expensive conclusion to Monsanto’s Brazilian soybean adventure.

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Comments on “Monsanto May Be Forced To Repay Brazilian GM Soybean Royalties Worth Billions Of Dollars”

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35 Comments
Anonymous Coward says:

An important thing to notice here is that Monsanto charges farmers twice for legally purchasing their seeds: once when the farmer buys the seeds, and once when the farmer sells the soy. Charging farmers a percentage of their sales is essentially a government-enforced private tax. To me, this is absurd; I can’t offhand think of any other industries that tax profits as part of a licensing agreement. Whether or not Monsanto’s patents can still be enforced in Brazil, this system of taxation needs to stop.

Anonymous Coward says:

Re: Re:

You could argue that the legacy music- and film-business does the same kind of things with performance fees:
The people at canadian weddings still have to buy the music they want to play at the wedding unless they hire someone who did the purchase of the music for them.

Same kind of thing seems to happen to some extend with cinemas and TV-channels, when it comes to visual performances. That is hard to say for sure though since much of what happens in relation to visual media is backroom dealing with absolutely no openness. The only way I have heard of it is through pricing on tv-recorders and the price of buying a copy of a recording.

Manabi (profile) says:

Re: Re:

The lawsuit was by farmers in the Rio Grande do Sul state and the appeal’s not been decided yet by the supreme court. All they’ve said is that any decision they make will apply to the entire country instead of just that one state. This ups what Monsanto will have to pay back if they lose. Before they just had to reimburse the farmers in that one state, now they’ll have to reimburse all the soybean farmers in the entire country of Brazil.

BentFranklin (profile) says:

I will never understand how they can use the wind to force people to buy buy their licenses.

Also, while I am not particularly concerned about ingesting GMOs in general, I am not at all interested in consuming soybeans that have been doused in Roundup, not matter how resistant they are, because the resistance is at the cellular level, which means the chemicals are still absorbed.

izzitme101 (profile) says:

Ill alway know them as the honeybee killers, scientists keep asking why they are dying, your answers are here.

http://www.naturalnews.com/036010_Poland_Monsanto_GM_corn.html

roundup, incidentally, is a bee killer to.

http://www.naturalnews.com/035920_beekeeper_Illinois_raid.html

http://kojoreport.com/?p=701

those are all recent articles, in the last couple of months, im sure theres a lot more, shame they own the politicians is all.

Greevar (profile) says:

Monsanto needs to go out of business forever.

If we survive, Monsanto will go down in history as the company that decimated our ability to produce food. This march towards monoculture will be our undoing. The more we rely on a single variety of a particular crop (GM corn, instead of many varieties of corn around the world), the more likely we are to encounter a disaster that causes an extinction of that crop and we will have nothing to replace it. Biodiversity is the best way to hedge our bets against the ravages of nature so that we aren’t putting all of our eggs into one basket. Biodiversity and artificial selection should be our means to securing sustainable food sources.

Monsanto doesn’t create GM corn for the good of agriculture, they designed it to maximize their profits, even if that path is directly in opposition to our own survival. It’s amazing how many practically useless or even damaging industries exist just because the pursuit of profit. Even if something has absolutely no utility to mankind and would not be missed, if it brings in a profit, it exists (e.g. banks and other financial institutions).

Monsanto et al, are nothing but parasites that leverage government power to secure monopolies and block innovative competitors. If they were gone tomorrow, I’d say good riddance.

Anonymous Coward says:

Can Monsanto also be fined and/or a bunch of their top people thrown in jail for extortion? Because that’s what their business practice amounts to, extorting money from people just for happening to live kind of near other customers of Monsanto. Simply because plants try to spread their seeds around through the wind & rides from animals that eat the plants as part of nature.

I mean, can you imagine if anyone would ever stand for it if the plant seeds for something MUCH more common that EVERYONE uses, rather than just farmers, like grass? If whole townships had all their citizens start to get sued by Monsanto or a Monsanto copy cat simply because a lawn fanatics bought some genetically modified grass seeds to get an extra strong and healthy and green lawn, and that genetically modified lawn spread all over town from the wind?

Anonymous Coward says:

“and the deforestation it is driving.”

Yep. Gun manufacturers are responsible for people being shot and car manufacturers are responsible for vehicular manslaughter.

Only the watermelon groups, green (environmentalist) on the outside and pink (anti-capitalist) on the inside believe these foods to be dangerous.

We don’t eat many “natural” foods. Oranges, bananas, chickens, pigs and even soy beans were created by humans over hundreds and thousands of years. Now we can create them quickly in laboratories. Just because you don’t understand the science doesn’t mean that it’s bad. It means you are ignorant.

The problem with Monsanto is the patent system. Change it and the company loses it’s power.

Digitari says:

Re: Re:

“We don’t eat many “natural” foods. Oranges, bananas, chickens, pigs and even soy beans were created by humans over hundreds and thousands of years. Now we can create them quickly in laboratories. Just because you don’t understand the science doesn’t mean that it’s bad. It means you are ignorant.”

The REASON it took 1000’s of years is because it was a more natural process, and it still works. The “Easy” way is NOT always better, in a 1000 years I bet your future genetic martial will despise you and people like you (if there is anything alive)

look at Pharmaceuticals as an example, in quite a few cases the side effects are as bad (if not worse) the the symptoms that are trying to be cured. Cross breeding plants either will or will not always get the improvements you are trying to create, however messing with the “code” (DNA manipulation) will cause side effects unforeseen for years, perhaps decades or longer..

I’m a vegetarian, I eat what I grow, and I don’t use pesticide, I’m also a physics major. I’m not “anti-science” by any stretch. but messing with the food supply for profit means minimum input for maximum return.

( and get off my damn lawn )

RD says:

Yep

“One way soybeans sold as non-GM can turn out to be the Roundup Ready variety is thanks to wind-borne GM pollen landing on non-GM crops. And yet instead of being penalized for contaminating non-GM crops, Monsanto gets paid for it — a neat trick made possible by a crazy patent system in which even those who commit infringement unintentionally are still held liable.”

Yes, make the victim pay for the crime. Just exactly the way the founding fathers of the constitution intended it.

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