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DAVID KRUSE

By Staff | Apr 2, 2010

Monsanto’s patent driven monopoly on its Roundup-Ready soybean genetics ends in 2015. Seed companies can then include the RR gene in soybean seed without paying royalties to Monsanto.

Competition will then be rejuvenated in the soybean seed business and the cost of RR soybean seed should decline. Does that mean that farmers will be able to save RR soybeans as seed? Unfortunately, the answer appears to be no. Despite the patent expiring, reportedly, the Plant Variety and Protection Act still bans farmers from using seed without the approval of the company that sold it.

Seed companies looking to protect their market share of the seed business are not likely going to grant approval to farmers to save their seed, therein reducing the aggregate size of the soybean seed market.

I would see that as incentive to amend the Plant Variety Act to permit farmers to save seed when none of the genes in the seed are protected by a patent. Denying farmers who purchase generic seed the full rights of control over use of that seed, would appear to be an over-extension of commercial control of seed. I’m sure that seed companies would disagree. It has been reported that Monsanto will allow farmers to save RR seed but suffice it to say that I’ll believe that when I see it.

The American Soybean Association sees other potential problems with the marketing of generic RR soybean seed after 2015. International registration and licensing must be maintained. Monsanto is doing that work now.

Who will maintain business in foreign countries for RR soybean genetics later on if Monsanto allows them to lapse? Also seed companies need access to the data package of a protected trait in order to register and incorporate it into their breeding program. How do they gain that access? Will Monsanto provide it with a smile? Monsanto has announced that it will not deny rights to seed companies who sell RR2 soybeans to sell RR, which was of concern to some that they may do this.

Monsanto’s answer for losing its patent on RR soybean seed is its patent on RR2 soybean seed. It is hoping that farmers will find next generation RR2 soybean seed so superior to RR soybean seed that farmers will abandon RR for RR2. Time will tell whether they can accomplish that transition.

RR2 seed performance and the market will dictate farmer’s choice. Former ISU Extension soybean specialist, Palle Pedersen, evaluated Monsanto’s claims of 7-11 percent yield advantage for RR2 over RR. Pedersen observed, “The yield data I have seen in Iowa for Roundup Ready 2 was variable. We didn’t see the 11 percent yield increase on a consistent basis.”

University of Wisconsin soybean specialist, Shawn Conley also evaluated Monsanto’s RR soybean genetics to Farm Futures Magazine saying that in 2009, he “saw no yield advantage for Roundup Ready 2 over Roundup Ready 1 soybeans in the southern region of Wisconsin. In the Central and north-central regions, however, they saw a solid two bushel-per-acre yield increase for Roundup Ready 2 over Roundup Ready 1. However, that yield increase did not pay for the increased cost of Roundup Ready 2 seed.”

Purdue University soybean Extension specialist, Shawn Casteel, reported that “Not everyone saw the 7-11 percent yield increase from Roundup Ready 2 that was advertised.”

Pedersen further notes that “if Roundup Ready 2 is like Roundup Ready 1, it will take a few years to get its genetics cleaned up.”

Initially, Monsanto bred RR soybean seed genetics into poor varieties and oversold their yield potential relative to non-GMO seed. There was a yield lag, or yield drag, on RR varieties. Eventually, the yield lag was bred out of RR varieties mostly because virtually all genetic breeding work on non-GMOs stopped with all seed breeding focus being put on RR seed varieties.

The best yielding seed was no longer available without the RR gene. The point was that the RR1 gene didn’t boost yield, but farmers bought and planted it anyway because of the other benefits of a RR growing program. With the patent expiring on the RR1 trait, all Monsanto is selling this time around with RR2 seed is yield, because the Roundup trait no longer collects a royalty.

Monsanto still claims a 7-11 percent yield improvement from RR2 genetics, so will have to back it up with real time results or back down the price of the seed. If RR soybean seed cost declines the amount of the current royalty, RR2 soybean seed should fall by a like amount.

Also, like with non-GMO and RR soybean seed development, if all future breeding programs only go to RR2, the underlying genetics of RR1 seed may fall away just like non-GMO seed varieties did. Monsanto still wields enormous control.

Still, this time is different. Farmers don’t have to buy RR2 soybeans in order to use the RR herbicide program. This time all Monsanto is selling is yield so either yield gets delivered, or the market will lower the cost of RR2 seed and trim what RR2 farmers plant.

Monsanto says that what they charge for their seed should not bother farmers because every year, “We literally take their investment in us and reinvest it in them.” That’s worth a chuckle.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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