Paraguay soy farmers ask courts to halt Monsanto royalties

A group of Paraguayan farmers asked the courts to stop U.S. biotech company Monsanto from charging royalties for use of its genetically modified soybeans in the world's No. 4 exporter.

The farmers say royalty payments should be halted because the company charges growers about $40 million per year to use its Roundup Ready soy even though its patent on the seeds has expired.

They were inspired by a similar case in neighboring Brazil where a state court ordered Monsanto to stop charging for use of the seed technology.

"There are 34 farmers who are making this presentation initially but there are hundreds more who agree with it," said Regis Mereles, head of the Soy Producers' Association.

"The association has proposed ceasing payments without any prejudice to other negotiations on different strains," he said, referring to the new soybean technology, known as Intacta RR2 Pro.

Unlike Roundup Ready 1 technology, Intacta RR2 Pro offers protection against caterpillars.

A Monsanto spokesman in Paraguay, where the company receives $4 per tonne of soybeans, declined to comment on the farmers' legal action.

The company has defended an agreement signed with farming associations in 2004 that established payments for the use of its seed technology, which is present in about 95 percent of the beans produced in the South American country.

It says the deal was meant to apply until 2014 and argues that its royalty rights remain in place for as long as there are valid patents on the technology anywhere in the world.

Paraguay trails far behind neighboring Brazil and Argentina as a soy exporter, but production is growing steadily and farmers are expected to gather a record crop of 8.4 million tonnes this season thanks to favorable weather.