Monsanto disappointed in talks with Argentina on soybean technology

Monsanto laments that there is not a predictable way to collect royalties on the value new patented soybean technologies bring in Argentina.
Monsanto laments that there is not a predictable way to collect royalties on the value new patented soybean technologies bring in Argentina. | File photo

The lack of a mutual agreement in recent talks between the Monsanto Co., Argentina's Ministry of Agriculture, soybean growers, the broader agriculture industry and the government of Argentina has left Monsanto disappointed.

As a result, Monsanto is “reinforcing its commitment to enforce its private contracts and intellectual property rights both inside and outside Argentina,” in an effort to fulfill the company’s obligation to its farmer customers around the world “who expect and deserve a level playing field,” Business Wire reported.

“Additionally, until such time that there is further clarity within Argentina on a predictable way to collect royalties on the value new patented soybean technologies bring, the company plans to take measures to protect its current assets and will suspend launching any future soybean technologies in the country, including Roundup Ready 2 Xtend soybean,” the publication stated.

Monsanto President Brett Begemann said in a statement last week that the government’s actions did not go hand in hand with promises made to support intellectual property rights and private agreements.

“We were optimistic that a solution would be secured to allow the legally operating soybean technology royalty system to continue uninterrupted following recent discussions between the Ministry of Agriculture for Argentina and the soybean industry stakeholders,” Begemann said. “While the Government of Argentina has acknowledged to us that they were committed to supporting a conducive environment for continued investment and further long-term development of agriculture through recognition of intellectual property rights and a recognition of private agreements, the recent actions are not consistent with that position. Both endorsing and actively supporting these basic principles are necessary to create a predictable business environment, which invites foreign investment.”

Begemann added that although the company is concerned that the recent government actions “may adversely affect its private agreements,” Monsanto will remain committed to continued dialogue with the Government of Argentina to encourage new investments in Argentina.

The Minister of Agriculture expressed concerns over the existing system during talks and submitted several proposals to the soybean industry stakeholders. But the parties could not come to a mutual solution.

“In light of the continued evolving business environment in Argentina, (Monsanto) is doing a full review of its business plans and projections for Argentina and will assess any implications to its balance sheet and earnings,” Business Wire reported.

Monsanto receives royalties when soybean growers opt to use Intacta RR2 PRO soybean technology. In Argentina, growers who use the technology are afforded flexibility and choice in payment timing – royalties can be paid when certified seed is purchased and at various intervals up until the point of grain delivery and beyond.

Argentina growers have many options. Intacta RR2 PRO soybean technology only became available last season. Before then, growers relied on conventional pesticides to control insects – a method which is still an available option for them. Because Intacta RR2 PRO technology has proven to be a better option for growers, many switched to the new technology.

According to the University of Buenos Aires,  Intacta RR2 PRO soybeans “could provide Argentina with an economic benefit of $3.5 billion over the next five years.”

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