US-based company Monsanto, world's largest seed company, suspended collection of royalties for its Roundup Ready soybeans in Brazil while it appeals a state court ruling on intellectual property rights.
An appellate court in Mato Grosso this week upheld an injunction requested by a group of growers to stop fee collections in the state before a trial challenging patents for the genetically modified beans. Monsanto will temporarily suspend the collections nationwide to "maintain operational consistency," the St. Louis-based company said Wednesday on its website.
Growers say the patent on the original Roundup Ready soybeans expired in 2010, ending their obligation to pay Monsanto a technology fee on the seeds.
Monsanto says that Brazilian law extends the patent to 2014, when it expires in the US. Monsanto is counting on growth in Latin America, particularly Brazil, to meet its earnings forecast.
Monsanto said it expects appellate courts to decide whether collections can resume over the next several weeks, prior to the start of the trial in state court.
The outcome of the case won't affect sales of Intacta soybeans, a newly patented product engineered to produce insecticide and tolerate Roundup herbicide. Farmers are currently testing Intacta beans prior to full commercial sales next year.
A 20 million dollars agreement signed Wednesday by the United Nations and Brazil will seek to transfer the expertise of the South American country to support cotton farmers in developing economies.
"This agreement represents an excellent opportunity to demonstrate the effectiveness of South-South cooperation between developing world partners as a vehicle for sustainable economic growth," said the Director-General of the Food and Agriculture Organization (FAO), José Graziano da Silva, at the signing ceremony at the agency's headquarters in Rome.
Cotton is fundamental to the economies of many developing nations, particularly in West and Central Africa, where around 10 million small farmers depend on the sector for their income, according to FAO.
As a result, the sector occupies a strategic position in the development and poverty-reduction strategies of a number of governments in Africa, Asia and Latin America.
The four year project will target participating countries with technical assistance and training in best practice in cotton cultivation and marketing.
Experiences, technologies and techniques acquired through the initiative will be captured and disseminated to promote further knowledge- and skills transfer, FAO said in a news release.
As one of the major producers of cotton in the world, Brazil also has considerable experience in devising new technologies for the cotton production chain, including through cooperative rural development efforts undertaken with other cotton producers such as Benin, Burkina Faso, Chad and Mali.
The project seeks to capitalize on these experiences to strengthen the agricultural sectors in developing countries and foster cooperation on rural development.
Initially, the project will focus on Haiti and Mercosur countries, with the possibility of extending it to other developing countries in Latin America and Africa.
The Brazilian Cotton Institute will provide 10 million dollars in financial support, while the Brazilian Cooperation Agency will supply an additional 10 million.
FAO Regional Office for Latin America and the Caribbean will contribute 200,000 dollars worth of non-financial support, including the provision of expertise and technical information, as well as mobilizing its international networks in support of the project.