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Monsanto may pull its biotech soybean seeds from Argentinaqrcode

May. 12, 2016

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May. 12, 2016

Monsanto Company
United States  United States
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Monsanto Co. said it could pull its biotech soybean seeds out of Argentina, one of the biggest overseas markets for U.S. agricultural firms, as it confronts difficulties collecting seed royalties and a decline in the country's currency.
 
The seed giant is discussing with Argentina's government a royalty-collection plan that Monsanto says is necessary to recoup investment on genetically engineered soybeans that can repel destructive worms, which Monsanto began marketing in Argentina about two years ago.
 
The administration of Argentina President Mauricio Macri, elected in December, has raised questions around Monsanto's royalty-collection model, in which some farmers pay the fees up front and others pay when they deliver their crops to grain elevators and exporters.
 
"We are doing a full review of our business plan there," said Michael Frank, chief commercial officer for Monsanto, speaking at an investor conference.
 
Officials at Argentina's Ministry of Agriculture and its U.S. embassy had no immediate comment.
 
Monsanto is considering its path in Argentina as the company deals with other challenges in foreign markets.
 
The European Union has yet to approve a new variety of Monsanto soybean for import, raising concern among some grain traders that trade disruptions could arise if approval isn't granted by the time U.S. farmers begin to harvest the new roughly 2 million acres Monsanto estimates will be planted this year.
 
In India, a joint venture between Monsanto and a local seed company is similarly reviewing its biotech seed business after India's agriculture ministry implemented new price controls for genetically modified cotton.
 
Argentina has emerged as one of the top global crop-producing countries and an increasingly important market for companies like Monsanto, DuPont Co. and Syngenta AG that sell seeds and pesticides to farmers. Monsanto generated about 5.8% of its $15 billion in fiscal 2015 sales in Argentina, including both seeds and herbicides. The company doesn't disclose soybean seed sales in the country.
 
The country has warmed to genetically modified seeds, accounting for about 13.6% of all biotech crop acreage planted last year, according to the International Service for the Acquisition of Agri-Biotech Applications. But Monsanto, the world's largest seed company, has struggled in the past to collect so-called technology fees on genetically engineered seeds sold in Argentina.
 
The government there permitted farmers to save soybeans grown from Monsanto's "Roundup Ready" seeds, which allow the plants to withstand the company's trademark herbicide, and replant them, which led to widespread bootlegging. Monsanto has said it doesn't expect to collect royalty fees on those seeds.
 
Monsanto aims for a different outcome with its new soybean seeds, called Intacta RR2, which the company says allow soybean plants to withstand worms as well as Roundup, and yield four bushels per acre more than Monsanto's older soybean version. Mr. Frank said Tuesday that "a majority of elevators" are testing soybeans to determine whether they contain Monsanto's new genes. Such tests are part of a system Monsanto says is legal in Argentina and required to ensure payment for Monsanto's technology, and to make further investments in seeds tailored to Argentine soils.
 
"We will be very diligent in our efforts to secure our investments and intellectual property there," Mr. Frank said.

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