Royalty for Monsanto's Intacta RR2 Pro soybeans in Brazil set at US$ 21 per acre

Date:08-01-2013

Genetically modified soybeans have been grown legally in Brazil for ten years and the second generation of GMO soybeans are now about to make their debut in Brazil for the 2013/14 growing season. The second generation of GMO soybeans called Intacta RR2 Pro will start to be sold by Monsanto within a week. The company has approximately 2.8 million sacks of Intacta seed to sell this growing season, which is enough to plant approximately 10% of Brazil's 2013/14 soybean crop.

Monsanto just announced that the royalties for the Intacta RR2 Pro soybeans will be R$ 115 per hectare or approximately US$ 21 per acre. That will be the royalty for farmers who continue in litigation over refunds they have requested for royalties they paid over the last two years for Roundup Ready soybeans. If a farmer drops out of the litigation, the royalty for Intacta RR2 Pro soybeans declines to R$ 96.50 per hectare or US$ 17.75 per acre. These will be the royalties for the next four growing seasons.

The first generation GMO soybeans were resistant to Roundup herbicide which allowed farmers to reduce their production costs by only using Roundup herbicide. The royalty charged for the Roundup Ready soybeans was R$ 26 per hectare or approximately US$ 5.00 per acre. The Intacta soybeans are resistant to Roundup herbicide and also to most of the common insects that attack soybeans in Brazil. This new technology is expected to reduce production costs for farmers by eliminating most of their insecticide applications.

The new soybeans will require that a refuse of non-Intacta soybeans be planted nearby where the insects can migrate and be controlled by traditional chemical methods. The refuse acreage must be no less than 20% as large as the Intacta acreage and it must be on the same farm and not more than 800 meters from the Intacta soybeans. Without providing refuse areas, the insects will eventually become resistant to the new technology.

The production of Roundup Ready soybeans in Brazil started out clandestinely in the state of Rio Grande do Sul in 1998 as farmers in the state brought in Roundup Ready soybeans from Argentina. In 2003, the federal government officially authorized the planting of Roundup Ready soybeans in Brazil and in 2007 the National Technical Biosecurity Commission (CTNBio) authorized the planting of GMO corn in Brazil. During the 2012/13 growing season an estimated 89% of the soybeans grown in Brazil and 85% of the full-season corn in Brazil were GMO varieties.

In June of this year China gave it's OK for the importation of Intacta RR2 Pro soybeans allowing Monsanto to start selling the seed for the 2013/14 growing season. According to the Brazilian Association of Seed Producers (Abrasem), the demand for Intacta RR2 Pro soybeans will probably exceed the supply until the 2015/16 growing season.