January 20, 2012

Brazil Farmers Encouraged to Plant non-GMO Soybeans

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Researchers from Embrapa continue to stress to Brazilian farmers that the use of conventional soybeans (non-GMO or in other words, not Roundup Ready) is an economically viable option throughout Brazil. To promote their program for conventional soybeans, they have set up a series of eight demonstration plots throughout the principal production areas of the state of Parana illustrating the advantages of conventional soybeans. They have also recently published a guide called Free Soybeans (Soja Livre) promoting the growing of GMO-free soybeans in Parana. Embrapa's goal is to give the farmers in Brazil an option as to what kind of soybeans they plant and not to feel that their only option is to plant Roundup Ready soybeans.

The push-back to Roundup Ready soybeans has already gained a footing in Mato Grosso where about a quarter of the production is conventional soybeans. Part of the resistance to Roundup Ready soybeans is rooted in the formula used to determine how much royalty must be paid to Monsanto. In fact, there is a meeting scheduled for next week in Mato Grosso to discuss how the royalty is to be paid.

Monsanto prefers a payment up front when the seed is purchased of 1.0% to 1.2% of the eventual value of the soybeans that will be produced. Monsanto estimates that in northern Mato Grosso each kilogram of Roundup Ready seed will produce 72 kilograms of soybeans. If a farmer achieves a yield higher than what the company originally estimated, then the payment would increase proportionally. Farmers are adamantly opposed to this method of payment because they feel a higher yield could be the result of many things and not just Roundup Ready technology.

An alternative method of payment would be when the soybeans are sold, but then the royalty increases to 2% of the value of the soybeans. Additionally, collecting the royalty at the point of sale would require extensive testing and bookkeeping on the part of the grain elevator or co-op.

Farmers who grow conventional soybeans are also concerned about the royalty program because of the ease of contamination of their conventional soybeans with Roundup Ready soybeans. If a farmer had grown conventional soybeans and subsequently they got contaminated with as little as 0.1% Roundup Ready soybeans during harvesting or transporting, the grower would be required to pay the 2% of the value of the crop. Farmers contend that the contamination could have come from combines and trucks not being properly cleaned between fields or even cross pollination due to insects. They feel such a program is highly unfair and open to abuse.

Even though the soybeans in the state of Parana have suffered from an extended drought, the demonstration plots are illustrating that early-maturing conventional soybeans have a yield potential just as good as or better than GMO varieties and they can actually result in more income for the farmer.

If a producer grows 1,000 hectares of conventional soybeans in Parana he saves about R$ 23,000 by not having to pay royalties. He then gets paid a premium of about R$ 2.00 per sack for his conventional soybeans. Therefore, if his field yields 55 sacks per hectare, the premium equates to R$ 110,000 in additional income. Using herbicides other than Roundup will probably cost a little more, but then there would be less chance of developing herbicide resistant weeds on his farm. In the end, backers of conventional soybeans feel they can be more profitable by not using Roundup Ready soybeans.