Business of buying

Mar 31, 2000 12:00 PM, Kurt Lawton

Are Roundup Ready seed prices fair in the U.S.? Many farmers seem to be echoing this question in light of a recent General Accounting Office report that compared U.S. Roundup Ready (RR) soybean seed prices with those paid in Argentina. According to the report, "the average commercial price paid for RR soybean seeds dropped significantly in Argentina - from about $25 for a 50 lb. bag in 1997 to about $9 in 1999. In comparison, U.S. farmers paid about $21.50, which includes the $6.50/bag technology fee."

Wrong question? In response to the report, farmers and the American Soybean Association called on Monsanto "to remedy inequities that are disadvantaging U.S. farmers in the global marketplace."

But first, understand Argentina. Its patent law is relatively new and untested for plants. And its seed laws are not being enforced, which has created massive black market seed sales, estimated at 25 to 50% of the RR seed sold. Plus, farmers there are saving and replanting RR soybean seeds. All of this led to Monsanto's price drop.

"We price our products to remain competitive in response to local market conditions," says Carl Casale, Monsanto's vice president for North American ag markets. "Unfortunately, the influence of black market sales and the lack of intellectual property protection in Argentina have resulted in the erosion of the value of our technology there. We're as unhappy about this as the American farmer."

Right question. Why did Monsanto introduce a technology for which it doesn't have a patent in Argentina, where protection and enforcement of intellectual property rights are risky?

"In reality, the technology would have made it there whether we introduced it or not," says Dan Verakis, spokesperson for Monsanto. "In Brazil this year, where we have not yet introduced the technology, an estimated 10 to 15% of the soybean acres will be Roundup Ready."

American Soybean Association President Marc Curtis states that before seed companies decide to introduce their new technologies to potential overseas markets, they first "should consider their ability to protect intellectual property rights and enforce contracts...in those markets."