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Argentina struggles with Roundup Ready soybean royalties Steven Lewis Food Chemical News, USA, 22 Nov 2004 Argentina struggles with Roundup Ready soybean royalties Argentina's agriculture ministry has refused to meet Monsanto's demand for royalty payments of $3 per ton for Roundup Ready soybeans exported over the past 10 years When Monsanto announced in September that it was renewing biotech soybean research in Argentina, it appeared that the Argentine government and the company's management were on the road to resolving a decade-long royalty- related dispute (see FCN Sept. 13, Page 5). Relations deteriorated shortly thereafter, when the agriculture ministry balked at the company's demand for retroactive royalty payments. Tensions came to a head when Monsanto management informed Argentine exporters that the company intended to collect royalties on RR soybean shipments upon arrival in foreign markets where the patent is respected. Benito Legeren, head of the Argentine Rural Confederation, estimated that overseas royalty collections would cost Argentine soybean producers $200 million, enough to erase profits in the upcoming year. In order to forestall this development, Legeren called on the agriculture ministry and producer associations to enter into negotiations with Monsanto. Although the parties have engaged in dialogue, hopes for a prompt negotiated royalty agreement faded this month. Argentina's National Advisory Commission on Biotechnology (CONABIA) announced that Monsanto's patent is not enforceable in Argentina, because the patent request for RR soybeans was submitted 14 months after the variety was created, two months beyond Argentina's deadline for application. CONABIA acknowledged that Monsanto might try to charge royalties on Argentine soybeans once they reach foreign markets where Monsanto's patent is respected. However, the report downplayed the economic impact on producers and exporters, because a large share of Argentina's soybean exports is destined for European markets where the patent is about to expire. Although all parties agree that negotiating is in their best interest, Argentina's private and public sector have not agreed on a negotiating stance. The agriculture ministry supports a "global royalties" plan, devised by the National Seed Institute, under which producers would pay a royalty fee into a trust fund. Fees collected by seed companies that sell certified RR soybean seeds would also be paid into the fund, and ultimately the money would be paid out to settle Monsanto's royalties claim. But Argentina's industrial sector and internal revenue agency have rejected the global royalties plan. Revenue agency head Roberto Lavagna said the plan would "limit development of agricultural production for the next 20 years." He recommended that royalties be collected on a per-sack basis and paid to Monsanto in increments. The inability of interested parties to settle on a royalty collection plan puts the burden on Argentina's Congress to pass legislation that requires intellectual protection for biotech crops and establishes a system for collecting royalties. Support for such legislation is growing, because there is consensus that settling with Monsanto is preferable to having the company collect royalties when RR soybeans reach export markets.
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