Brazil GMO soy sales start slowly; royalties cited
July 25, 2005
Reuters
By Roberto Samora

SAO PAULO, Brazil, July 25 (Reuters) - Sales of genetically modified (GMO) soybean seeds for next harvest, which were legalized earlier this year in Brazil, are very slow, industry sources said on Monday.
Farmers' financial difficulties and royalties charged by U.S. biotech giant Monsanto Co. <MON.N> are seen as the main reasons for the slowness.
"The market isn't moving. GM sales are sluggish and things are generally quiet because farmers don't have cash," said Ivo Carraro, executive director of the Central Cooperative of Agricultural Research (Coodetec, Brazil's biggest producer of GM seeds.
Coodetec has sold less than 10 percent of its seeds, compared with 90 percent at the same time last year, he said, adding that low soy prices, weak dollar and crop losses due to drought had squeezed farmers' purchases.
Coodetec, one of Monsanto's partners in Brazil, produced around 2.5 million 40-kg bags of GM seeds for next year's harvest.
Brazil will have some 3 million bags of GM soybean seeds for the 2005/06 (Oct/Sept) crop, which would cover 2.2 million hectares, or a little less than 10 percent of the soybean planted area in 2004/05.
Following lengthy negotiations, Monsanto reached a deal with seed growers in mid-July to charge 0.88 real per kilo for use of its Roundup Ready (RR) soybean technology. Its RR seeds are cheaper to grow because they require less chemical protection.
As the market considered the charge to be excessive, Monsanto sought to boost sales by offering farmers credit in proportion to the volume of their GM seed purchases.
In addition, seed producers can offer farmers discounts by passing on some of the bonuses they receive from Monsanto for various services.
"These benefits could be given to farmers," said Narciso Barison Neto, interim president of the Brazilian Seed Producers Association (Abrasem).
Monsanto also made an agreement earlier this year with soy producers from Rio Grande do Sul state under which those using illegal Argentine seed must pay a charge equivalent to 2 percent of 2005/06 soy sales.
Coodetec's Carraro said that the situation concerning GM soy sales should become clearer in August and September.
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