Monsanto, the Missouri based biotech and chemical company, is in the throes of a lawsuit brought about by 5 million Brazilian farmers seeking retribution totaling near $8 billion for what they claim is unfair collection of royalties on crops by Monsanto.
According to the claims from the farmers, Monsanto’s annual “renewal” seed harvest royalties are excessive, which includes an initial royalty and an ongoing 2 percent royalty on the sales of the crops produced through Monsanto seeds, regardless of what generation of seed the farmers are using after their initial purchase from Monsanto.
Renewal farming has been practiced for millennia and involves using seeds from previous harvest seasons, but Monsanto, which has patented all of its genetically modified seeds, says the patents give the company the right to collect royalties on the use of its seeds for as long as they are providing crops for farmers.
A Brazilian judge ruled in favor of the farmers, and says Monsanto owes at least $2 billion in unfair royalties collected since 2004, but Monsanto has appealed the court’s decision, arguing that the farmers knowingly agreed to the royalty clause on the seeds.
Brazil has swiftly become the world’s second largest producer of genetically modified soybeans behind the U.S., making up more than 25 percent of the country’s farm exports. A 2011 report found that genetically modified crops—mainly soy, corn and cotton—are actually outpacing the growth of conventionally grown crops in Brazil. Last year the country produced more than 50 million acres of GMO soy, 20 million acres of GMO corn and nearly 2 million acres of GMO cotton.
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