Monsanto Plans To Charge Fee On Argentina's Soy Exports
Dec. 17, 2004
Monsanto announces plans to charge Argentine exporters a licensing fee for every ton of soybeans shipped abroad, according to a Dow Jones report.
"We sent a letter to exporters letting them know about this," said Federico Ovejero, manager of public and government affairs for Monsanto.
Initially the fee would be 2 percent on the per ton value of a shipment and eventually would rise to 3 percent per ton, Ovejero said. At current prices, this would force exporters to pay about $3 for every ton of soy exported.
The plan is part of Monsanto's effort to collect royalties on the use of its genetically modified soybean seeds.
Ovejero said the plan is not definitive. Monsanto is still negotiating with the Agriculture Secretariat and farm groups to reach a consensus about how to ensure royalties are paid, he said. "We are committed to continuing talks with the government and the rest of the players here to reach a consensus," he said. "But on the other hand, we need to implement a (royalties collection) system for the 2004-05 campaign. If there is not an effective system in place by then, we'll move forward with our proposal, which involves selling licenses to exporters."
Around 95 percent of Argentina's soybeans are genetically modified, and most farmers use Monsanto-made seeds. Monsanto struggles to collect royalties on the seeds because they can be used year after year by farmers who pay for them just once. The company stopped selling the seeds in January, saying it was no longer profitable.
Monsanto claims that many seeds are sold unauthorized in Argentina's vast underground seed market, depriving the company of a legitimate source of revenue. Ovejero says this revenue is necessary to ensure Monsanto continues to
invest in new products.
However, farm groups oppose Monsanto's plan. Argentina's Rural Society, the country's largest and oldest farm group, said that royalties should be paid for but not as a licensing fee on the sale of grains.
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