Brazil's President Bows to Pressure from Monsanto & US on GE Soybeans

Associated Press
Update 1: Brazilian Farmers May Plant GM Soybeans
10.15.2004, 03:43 PM

Brazil's president approved a controversial executive order allowing farmers
to plant genetically modified soybeans just as the planting season goes into
high gear for the world's second largest soy producer.

The measure, published in an official government newspaper Friday after
being signed by President Luis Inacio Lula da Silva late Thursday, was hotly
contested by environmentalists, who want to keep in place Brazil's ban on
genetically modified crops because of fears they harm the environment.

But it was a victory for agriculture biotechnology giant Monsanto Co., which
needed the order to collect royalties from Brazilian farmers who use cloned
or smuggled versions of the company's popular Roundup Ready seeds to cut
production costs.

After losing profits for years from widespread illicit use of GM soy seeds
in Brazil, U.S.-based Monsanto started collecting the royalties last year
when a similar executive order was passed for the first time.

Monsanto needed the new order because the previous measure applied only to
the 2003-2004 harvest. It will also allow the company to re-negotiate
royalty payments with Brazilian soy farmers using the seeds.

Monsanto called the decision an important step toward permanent approval for
genetically modified crops in Brazil, but Greenpeace criticized Silva's
government for again finding a way to legalize a crop banned in 2000.

"It is a sign of disrespect to Brazilian society to allow a variety of GM to
continue being cultivated that hasn't passed an adequate environmental
review," Greenpeace said in a statement.

Brazilian farmers recently started planting their 2004-2005 soybean crop
amid predictions that the harvest could generate 60 million metric tons, a
20 percent increase from the 2003-2004 crop.

Latin America's largest country is second only to the United States in soy
production, but easily has the potential to become the world's largest soy
producer because of cheap land, low labor costs and plentiful water.
Production has boomed over the last decade amid rising worldwide demand,
especially from China for soy used in products ranging from animal feed to
cooking oil.

Experts estimate about 30 percent of Brazil's soy is grown with GM seeds,
but the figure is near 90 percent in Brazil's southernmost state of Rio
Grande do Sul, where the seeds were first introduced in the 1990s after
being smuggled in from neighboring countries with no GM bans.

Monsanto's soy seed is engineered to withstand the spraying of herbicides,
which saves farmers money by cutting down on the number of workers and weed
killers needed. Brazil's ban on GM crops did little to stop farmers, because
it was rarely enforced.

The company disputed claims that GM crops harm the environment, saying Rio
Grande do Sul soy farmers have boosted their profits while significantly
reducing the amount of herbicides used to kill weeds.

"Farmers have opted to use genetically modified soy because of the benefits
the product offers," said Monsanto spokesman Lucio Mocsanyi.

Monsanto has complained bitterly for years about Brazilian farmers using the
company's technology without paying for it, and has also lobbied the
government to legalize genetically engineered crops. Although the company
can continue collecting the royalties, the order does not allow it to sell
its seeds in Brazil.

Silva managed to avoid some of the controversy over GM soy last year because
the order approving planting and harvesting was signed by Vice President
Jose Alencar while Silva was traveling abroad, a move many believed was
intended to disassociate the president from the decision.

He later pledged not to approve another temporary measure authorizing GM soy
planting and harvesting.

But a bill in Congress that would create a framework to legalize GM seed
sales and crops got bogged down this year amid predictions it would not be
passed until November, long after Brazilian farmers must finish planting.

Silva faced divisions in his administration over the new order. In the end,
he sided with Agriculture Minister Roberto Rodrigues and went against the
advice of Environment Minister Marina Silva.