Brazil's largest soybean cooperative, Aprosoja, has decided to drop a lawsuit against U.S.-based Monsanto and is encouraging farmers to sign agreements with the seed giant, the group's lawyer said on Friday.
Aprosoja decided after a long assembly in top soy producing state Mato Grosso late on Thursday that members should accept Monsanto's offer to reduce the price on its new Intacta RR2 pro soybeans in exchange for dropping a case against the company over its old seed technology, Roundup Ready.
"Yesterday, the agreement was accepted by the producers; next week the judicial action will be retired," Ricardo Tomczyk, a lawyer who represents Aprosoja, told Reuters.
Another entity, Mato Grosso state's farm and ranch federation Famato, had already decided to support the agreement. Tomczyk said individual farmers could still sue Monsanto for royalties, but they will no longer have the backing of the country's two powerful farm groups.
Monsanto's genetically modified technology is present in 85 percent of Brazil's soy fields and helped the country become an agricultural powerhouse over the past decade. Brazil is virtually tied with the United States in soybean production.
The company is also fighting off legal battles with farmers over its business practices in the United States.
Monsanto offered on July 24 to give Brazilian farmers a discount on Intacta seeds of 18.5 reais ($8.15) per hectare, or 16 percent off the 115 reais per hectare price if they signed an agreement promising not to sue Monsanto for royalties paid in previous years.
Producers harvest nearly three tonnes of soybeans per hectare on average in Brazil. Monsanto says Intacta, which is resistant to worms, will save farmers money on chemical sprays.
The lawsuits in Brazil started because farmers claimed Monsanto's right to charge royalties on Roundup Ready expired in 2010 under Brazilian law while the company said its patent didn't expire until 2014, the same as in the United States.
Monsanto already stopped charging royalties on Roundup Ready sales in February after Brazil's Upper Tribunal of Justice (STJ) rejected the company's 2014 patent claim. But some farmers wanted the firm to pay back the royalties collected since 2010.
China, which buys 70 percent of Brazil's soy, approved Intacta imports on June 10, clearing the way for the new seeds to be sold in Brazil and giving Monsanto a way out of the royalty dispute in its second largest market after the United States.
Monsanto's spokesman in Brazil declined to say how sales of Intacta were progressing but estimated 2.8 million bags of the seeds would be available for the 2013/14 crop that will be planted starting in September in Brazil. This represents about 8 percent of the expected demand for seed.