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Monsanto Faces $7.5 Billion Payout to Brazilian Farmers

June 29, 2012

This article is re-posted from CorpWatch.org.

Monsanto, the largest seed corporation in the world, may have to pay as much as $7.5 billion to five million Brazilian soy farmers.



The company has long dealt out severe legal sanctions against farmers it suspects of “pirating” its seed. But now the farmers have turned the tables on Monsanto, by suing the company and winning.

Genetically modified (GM) soy production in Brazil began illegally in 1998 with seeds smuggled in from Argentina. Farmers favored the engineered product because it was resistant to Roundup herbicide (another Monsanto product) making it easier to plant. In 2005 Brazilian president Luiz Inacio “Lula” Da Silva, realizing that many farmers had switched over, legalized Roundup Ready soy despite the misgivings of environmental activists. Last year the country planted 30.3 million hectares of GM crops, most of which were soy.

Most of this soy is exported to Europe, where the soy is used to feed cattle and for biofuels, and to China, whose burgeoning beef industry has an enormous and ever growing demand for cattle feed. Soy comprises 26 percent of Brazil’s farm exports.

That same year, Monsanto began to charge Brazilian growers a two percent tax for their GM soy production. Farmers that buy seed from Monsanto are also required to sign a contract in which they pledge not to save seed for future harvests, a millenia-old custom among farmers.

Monsanto penalized farmers who did not keep GM soy strictly separated from non GM soy. (also marketed by Monsanto) If tests of non GM soy crops uncovered Roundup Ready soy, Monsanto required farmers to pay a three percent fee.

The biotech industry claims that the farmers either knowingly or unknowingly mix the two strains together. It has long downplayed the allegation that GM seeds spread through pollination or inventory errors, a process known as “genetic contamination.”



In 2009 a group of rural syndicates from Rio Grande Do Sul, Brazil’s southernmost state, took Monsanto to court, charging that separating GM and non-GM soy was virtually impossible and that therefore the “Monsanto tax” was unjust.

“The issue is that segregating GM and conventional soya is difficult, since the GM soya is highly contaminating”, http://www.nature.com/news/monsanto-may-lose-gm-soya-royalties-throughout-brazil-1.10837 João Batista da Silveira, president of the Sindicato Rural de Passo Fundo and one of the leading plaintiffs, told Nature magazine.

In April 2012 a Rio Grande Do Sul judge ruled that Monsanto’s fees were illegal and noted that the Roundup Ready seed patent had already expired in the country. The company was not only ordered to stop collecting the royalty fees but to also return all such fees collected since 2004. Such collected royalties amount to $2 billion.

Monsanto appealed the ruling but was dealt another blow on June 12 when the Brazil Supreme Court decided unanimously that whatever the Rio Grande Do Sul courts rule on this matter should apply to the whole of Brazil. This caused the number of plaintiffs to balloon to five million and the total royalty owed to rise to $7.5 billion.

Monsanto also claimed that when farmers saved seed to replant it in the following seasons, they were required to pay royalties every season. But the plaintiffs counter that Brazilian law allows them to save seed.

“Monsanto gets paid when it sells the seeds,” Jane Berwanger, lawyer for the farmers told MercoPress. “The law gives producers the right to multiply the seeds they buy and nowhere in the world is there a requirement to pay (again)… Producers are in effect paying a private tax on production.”

In an official statement, Monsanto stated: “While the lawsuit lasts and the courts do not render a final decision on the merits, the royalty collection system for the use of Monsanto’s Roundup Ready technology will continue operating normally based on legal safeguards established.”

Toxic Impact Of Roundup Ready Soy

In 2008 Chemical Research in Toxicology published a study by Gilles-Eric Seralini, a French specialist in molecular biology and professor at the University of Caen, that indicated that Roundup is lethal to human cells. According to his research, doses far below those used on soy crops cause cell death in a few hours.

In 2010 Chemical Research in Toxicology, published a peer-reviewed study by Argentine embryologist Andres Carrasco, leading researcher at the National Council of Scientific and Technical Research and director of the molecular embryology laboratory at the University of Buenos Aires, which determined that glyphosate, Roundup’s active ingredient, is extremely toxic for amphibian embryos in doses much lower than those used in agricultural sprayings, as much as 1,540 times lower.

See Biosecurity Project Puerto Rico for more.

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