Genetically Engineered Soybeans: Acceptance and Intellectual Property Rights Issues in South America

Publication Date: October 2003

Publisher: Library of Congress. Congressional Research Service

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Research Area: Science and technology

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Abstract:

U.S. soybean growers and trade officials charge that Argentina and BrazilÐthe United StatesÕ two major export competitors in international soybean marketsÐgain an unfair trade advantage by routinely saving genetically-engineered (GE), Roundup Ready (RR) soybean seeds from the previous harvest (a practice prohibited in the United States) for planting in subsequent years. These groups also argue that South American farmers pay no royalty fees on the saved seed, unlike U.S. farmers who are subject to a technology fee when they purchase new seeds each year. The cost saving to South American soybean growers on the technology fee alone nets out to about $8 to $9 per metric tonÐa considerable cost advantage over U.S. soybeans in the highly competitive international soybean market. This practice also raises concerns about the intellectual property rights (IPR) of Monsanto (the developer of RR technology).

Commercial use of RR soybeans in Brazil remains illegal despite apparent widespread planting. A 1998 government approval of their commercial use remains suspended by court injunction, and resolution over their commercial legality is being considered by an appellate court. However, two recent Presidential decrees have given temporary reprieve to the ban on planting and marketing GE soybeans through December 2004. The eventual outcome on commercial legalization of GE crops in Brazil may have important consequences for intellectual property rights, as well as for international trade in GE crops. This report will be updated as needed.