More background on what's happening in Brazil.

"The government is being held hostage by farmers who feel free to do whatever they want," says geneticist Rubens Onofre Nodari, a professor at the Federal University of Santa Catarina who also works in the Environmental Ministry's genetic resources section.

1.Brazil delays GM crops and cloning bill
2.Monsanto Prods S. American Nations on Soy
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1.Brazil delays GM crops and cloning bill
Luisa Massarani
24 September 2004
Source: SciDev.Net
http://www.scidev.net/news/index.cfm?fuseaction=readnews&itemid=1618&language=1

[RIO DE JANEIRO] Brazil has postponed the creation of a regulatory framework for a range of biological procedures, including human cloning and genetic modification of crops. But Brazilian farmers are saying they plan to plant GM seeds with or without legal approval.

Meanwhile, Brazilian president President Luiz Inácio 'Lula' da Silva is under pressure to grant the country's farmers special permission to plant soya beans.

The controversial 'biosafety' bill has created tensions between Brazilian scientists, environmentalists, farmers and religious groups and has proved too complex for lawmakers to get to grips with, despite approval in March by the chamber of deputies, Brazil's lower house of parliament (see Brazil's quandary on bioethics).
http://www.scidev.net/Editorials/index.cfm?fuseaction=readeditorials&itemid=107&language=1

After a hectic week in which senator Ney Suassuna proposed an alternative to the approved text, voting on the amended bill had to be postponed. According to senator Heloísa Helena, the broad-ranging legislation is too controversial and there is no consensus among the senators.

Pro-GM farmers were disappointed by the delay, as Suassuna's proposed changes would allow both the production and sale of GM soya. Suassuna's amendments would also permit farmers to store GM seed from the 2004 2005 harvest for their own future planting, although it would not allow them to be sold. Last year, it was announced that Brazilian farmers had already been growing GM crops illegally (see Brazil to allow sale of illegally grown GM food).
http://www.scidev.net/News/index.cfm?fuseaction=readnews&itemid=357&language=1

But with or without government approval, farmers in the southern state of Rio Grande do Sul ”” where GM seeds from Argentina have been smuggled ”” intend to plant GM soya in 2004 for harvest in 2005 and some have already started planting seeds, says Carlos Sperotto, president of the state's Agriculture Federation.

According to Sperotto, about 90 per cent of the 95,000 soya producers in Rio Grande do Sul are growing GM soya. "GM soya is not only limited to Rio do Grande ”” about 20 per cent of Brazilian soya is transgenic", he says.

Germano Rigotto, state governor of Rio Grande do Sul, announced on 17 September that President da Silva will grant 'special permission' for GM soya to be planted in Brazil. This would be the third case of such an intervention since 2003 and would contradict an earlier statement by the president that no such permission would by granted this time.

"The government is being held hostage by farmers who feel free to do whatever they want," says geneticist Rubens Onofre Nodari, a professor at the Federal University of Santa Catarina who also works in the Environmental Ministry's genetic resources section.

Use of GM seeds is not the only controversial aspect of the proposed law, which Nodari is critical of as a whole.

The bill also seeks to ban human embryonic stem cell research along with reproductive cloning, according to the text approved by the chamber of deputies. Religious leaders were pleased with the prohibition of stem cell research, but scientists were not.

As a compromise, Suassuna proposed an amendment to the bill that would allow only research on stem cells taken from surplus embryos from in vitro fertilisation that have been frozen for three years, so long as permission was obtained from the donors.

Nodari, meanwhile, is critical of the bill's scope, which he sees as too broad to be workable. "The legislation joins different issues: genetically modified organisms, which is about creating biosafety rules; transgenic soya, which is about civil disobedience; and stem cells, which has an ethical nature," he says.

Ingrid Sarti, a policy expert and representative of the Brazilian Society for the Advancement of Science in the Brazilian parliament, also criticises the way the legislation consolidates different issues. In Sarti's view, it is emblematic of procedures adopted in the Brazilian National Congress.

"A radical polarisation of the arguments with a strong presence of the private interests and a consequent lack of a clarifying debate have led to the present legal deadlock for the GM crops," says Sarti.

Aloizio Mercadante, a government senator, says the Senate will vote on the legislation at the start of October. If Suassuna's amendments are accepted, the text will be sent back to the chamber of deputies for confirmation before being passed into law.

Link to the final text of the legislation approved by the Chamber of Deputies (in Portuguese)
http://www.scidev.net/misc/lei.doc

Link to the proposed bill to be voted on by senators
http://www.senado.gov.br/web/senador/NEYSUA/Redacao_final_Biosseguranca.pdf
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2.Monsanto Prods S. American Nations on Soy
September 25, 2004
By Hilary Burke
http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20040925&ID=3991069

BUENOS AIRES, Argentina (Reuters) - Monsanto Co. (MON), a company that has pioneered the development of bioengineered crops, is pushing hard to recover millions of dollars in lost revenue in three South American countries where farmers have sown its wonder seeds without paying royalties.

But, despite a determined lobbying drive in Brazil, Argentina and Paraguay -- the three top soybean exporters after the United States -- these nations are unlikely to act quickly enough to satisfy the St. Louis-based agricultural giant, which would like reforms in place now, with the 2004/2005 planting season just beginning.

A bill that could legalize biotech crops in Brazil, one of the only remaining holdouts among major soy-producing countries, has stalled in Congress, delaying the day when Monsanto could counter widespread sales of its seeds on the black market.

In Argentina, the government won't finalize a royalties fund proposal until December -- and then the bill will go to Congress. Meanwhile, in neighboring Paraguay, peasant protests may delay an accord on such fees in that country.

"This is definitely a region of particular interest to the company, because that is where soybean production is growing the fastest,'' said Todd Duvick, a food analyst at Banc of America Securities in Charlotte, North Carolina.

As soy production has surged in South America, particularly in Brazil, U.S. farmers paying stiff technology fees to Monsanto have decried the competitive advantage enjoyed by Latin American farmers using pirated Roundup Ready seeds, which will produce soy plants resistant to Monsanto's Roundup Ready herbicide.

"We believe it is reasonable that he who uses a technology and gains benefits by using it, also pays for it,'' Monsanto spokeswoman Lori Fisher told Reuters.

"Both Argentina and Brazil are important to worldwide agriculture and to any company who wishes to be compensated for the innovations they are bringing to agriculture,'' Fisher said.

For years farmers in Brazil and Paraguay -- where genetically modified crops are illegal -- have planted pirated Roundup Ready soy seeds.

Roundup Ready soy, engineered to withstand the effects of Monsanto's glyphosate-based herbicide, is popular with farmers because it makes soy cultivation cheaper and easier.

Roundup Ready soy is legal and is widely used in Argentina. Royalty fees are built into seed prices, but because soybean seeds are widely traded on the black market, Monsanto is demanding another mechanism.

The company stopped selling soy seeds in Argentina last year, saying it could not make back its investments.

Now it threatens to collect royalties on soy shipments from Argentina to countries where Roundup Ready is patented, if they are found to carry unlicensed Monsanto product.

"This would be a worst-case scenario. It would give rise to conflicts and individual arrangements,'' said Alberto Rodriguez, director of Argentina's Center for Grain Exporters.

"The price for soy would no longer be transparent, because some buyers would have to factor in that cost, depending on the destination for their soy,'' he added.

Argentine farmers often sow saved seeds that they have culled from plants in the prior growing season, which is legal. But they also cull seeds to sell on the black market.

Monsanto's renewed push in Argentina comes after the government in February dropped an antidumping complaint against Chinese-made glyphosate herbicide.

"They're going after (royalties) a bit more aggressively now than perhaps they had in the past because they realize they may be losing some business on their chemical side,'' said Frank Mitsch, an analyst at Fulcrum Global Partners in New York.

SIX YEARS AND COUNTING

Brazil is one of the only remaining major agricultural exporters to ban the commercial use of genetically modified crops, although many of its soybean farmers have ignored the ban over the past six years and planted black-market biotech soybeans.

Brazil's president said on Thursday he may issue a decree granting amnesty to producers of genetically modified soybeans for a third growing season, while a biosafety bill that would make the crops legal makes its way through Congress.

Farmers in Brazil's Rio Grande do Sul, one of the country's leading soy states, agreed in January to pay 10 reais ($3.50) per tonto Monsanto whenever they deliver 2003/2004 beans to grain elevators. Congress has yet to set a national standard.

Monsanto's Fisher said the royalty collection system in this state and neighboring Santa Catarina is being expanded to other soy-producing regions as the 2004/2005 season begins.

"We're very pleased to see Monsanto has been able to start collections at any amount, because we've been placed at an unfair competitive advantage of paying for technology that was pirated in Brazil,'' said Ron Heck, president of the American Soy Association.

U.S. growers aren't the only ones pleased.

"This accord is a success for our producers, because it means Monsanto and other companies can trust them and will be willing to market here new GMO products that are being developed,'' said Irmfried Schmied, trade director for Cotrijal Cooperative in Rio Grande do Sul.

In Paraguay, where biotech crops are in a legal vacuum, some 40 percent to 50 percent of soybeans are genetically modified.

"Monsanto has no right to charge royalties. As of now, none of its varieties is legally sanctioned,'' said Rosa Oviedo, a member of Paraguay's biosafety commission.

A Paraguayan soy producer participating in talks on royalty charges told Reuters on condition of anonymity that the government is likely to delay a decree legalizing biotech crops because of objections by peasants.

So while these three South American nations appear closer to striking a deal with Monsanto, the company's drive to install a broad royalties scheme in each is unlikely to see immediate results.

(Additional reporting by Reese Ewing in Sao Paulo; Mariel Cristaldo and Daniela Desantis in Asuncion)