NOTE: In April 2012, the courts of Brazil's state of Rio Grande do Sul suspended the collection of royalties on GM soy seeds by Monsanto as a result of a lawsuit brought by farmers' groups.
The ruling also provided for the reimbursement of royalties paid since the harvest of 2003/2004, as the business practices of Monsanto violated the rules of the Brazilian Cultivars Act.
According to an attorney for the farmers, their claim could have led to the reimbursement of about 6.2 billion euros to five million farmers in Brazil.
http://www.gmwatch.org/component/content/article/14091
Now Monsanto has come up with a proposed deal (see article below) to buy off the farmers. Monsanto is offering to give the farmers two years' worth of royalty-free GM soybeans if they forgo their claim. Farmers who accept this deal will gain less benefit than they would have IF they had won their claim.
It's expected that many farmers will accept Monsanto's deal because it offers a guaranteed 'benefit', albeit a smaller one than they stand to gain if they beat Monsanto's appeals right through the court system and ultimately win their case.
For Monsanto, the proposed deal keeps farmers planting GM soybeans and avoids the company having to repay royalties to the farmers if the farmers win their case. Also, its royalty practices, which the farmers' associations say are illegal, will continue unchallenged.
But the soy farmers' association Aprosoja has advised farmers NOT to sign the agreement with Monsanto, in the interests of safeguarding the rights of farmers and of upholding Brazilian law (article in Portuguese):
http://ruralcentro.uol.com.br/noticias/royalties-de-soja-produtores-do-mato-grosso-terao-duas-opcoes-64688
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Monsanto Offers Brazilian Farmers Royalty-Free Soybeans
By Jack Kaskey
Bloomberg
Jan 23, 2013
http://www.bloomberg.com/news/2013-01-23/monsanto-offers-brazilian-farmers-royalty-free-soybeans.html
Monsanto Co. (MON), the world's biggest seed company, agreed to waive two years of royalties on its Roundup Ready soybean seeds for Brazilian farmers who agree to forgo claims in a patent dispute.
Growers who sign the agreement won't pay the technology fee on soybean seeds that are genetically modified to tolerate glyphosate herbicide, marketed by Monsanto as Roundup, in the current and subsequent growing seasons, St. Louis-based Monsanto said today in a statement. Growers would waive the right to try to recoup royalties previously paid.
The agreement would resolve claims by growers who claim the patent on the original Roundup Ready soybeans expired in 2010, ending their obligation to pay Monsanto royalties on the seeds. Monsanto argues that Brazilian law extends the patent to late 2014, when it expires in the U.S.
"This agreement reflects the support of key grower associations and provides a mechanism to allow all parties to focus on the long-term solutions that will support the Brazilian agriculture industry and its growing demands," Rodrigo Santos, Monsanto Brazil president, said in the statement.
The agreement resolves uncertainty about Monsanto's ability to collect fees on its new Intacta soybean, which is scheduled to begin sales in Brazil during the next growing season. Intacta is engineered to produce an insecticide as well as to tolerate Roundup.
Profit Forecast
Monsanto rose 0.7 percent to $103.08 at the close in New York. The shares have gained 8.9 percent this year.
Monsanto has already told investors not to count on any revenue from Brazil soybeans this year. The company is excluding from its profit forecast an estimated 20 to 25 cents a share of earnings from soybean sales in Brazil, it said on Jan 8.
The agreement is supported by the Agriculture and Livestock Confederation of Brazil and 10 state agriculture federations in soybean producing regions of the country, Monsanto said.
The company suspended royalty collections in Brazil for a couple of months late last year after a court ordered them stopped in the state of Mato Grosso.