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Monsanto Continues to Bully Farmers

Monsanto vs Homan McFarling: Judge Clevenger Understands

by David Dechant
for CropChoice

(Thursday, Dec. 5, 2002 -- CropChoice guest commentary) --Monsanto's
prosecution of Percy Schmeiser for saving seed has been well publicized, as
it should be. However, Monsanto's other numerous legal actions against
farmers need more publicity. The Monsanto v. Homan McFarling case is one
such example.

Last week, the Northeast Mississippi Daily Journal reported that
Mississippi soybean farmer Homan McFarland will have to pay Monsanto
$780,000, unless the US Supreme Court agrees to hear his case and reverses
the US Court of Appeals decision, which had found that the Court for the
Eastern District of Missouri had not erred in finding Homan guilty of
infringing Monsanto's patent.

However, one of the three Appeals Court judges, Clevenger, dissented. He
referred to Monsanto's technology agreement as a "contract of adhesion"
and, therefore, argued that Monsanto's clause requiring that any disputes
be settled in a Missouri court is unenforceable. He wrote, "My colleagues
have the honor of making this court the first to enforce a forum selection
clause in a contract of adhesion against a defendant in derogation of his
constitutional rights." In other words, by requiring that farmers go to
trial outside of their home district, the tech agreement violates their
Fifth Amendment right to due process under the law.

So just what is a contract of adhesion? It is generally described as a
standard form contract. That means it's the same for everyone, written by
the party with the strongest bargaining power and offered under the
condition of "take-it-or-leave-it," giving the signer no chance of
modifying any of the terms.

To any farmer who has signed a Monsanto tech agreement, this sounds
familiar. All farmers sign the same contract, and the terms are, in fact,
lopsided and very much in Monsanto's favor. There has been no bargaining on
farmers' behalf for better terms. If farmers want to plant Roundup Ready
(RR) soybeans, they have to sign the contract whether they like it or not.
And, as Clevenger notes, over 200 seed companies offer RR soybean seed, but
all require that farmers sign Monsanto's technology agreement.

Upon noting that the majority of soybeans planted in the US are Roundup
Ready and that Mississippi farmers have weeds that are especially difficult
to control without Roundup, Clevenger says, "Taken together, these facts
indicate that farmers like McFarling have little choice but to sign the
Technology Agreement if they wish to remain competitive in the soybean
market."

This is most refreshing to hear! At least there is one Judge who has enough
sense not to fall for the simplistic argument that farmers don't have to
plant patented seed if they don't want to. Clevenger hits the nail right on
the head: the need to be competitive forces many farmers to plant RR
soybeans, even if they don't like the tech agreement. And, it's not just in
Mississippi. Several Midwestern farmers say that a lot of landlords now
expect weed free soybean fields, so if they want to rent land, they have to
grow RR soybeans to keep the landlord satisfied.

To further expand on Clevenger's argument, what would happen if Monsanto
succeeds in its quest at the World Intellectual Property Organization and
the US Patent and Trademark Office to patent soybean genes and genetic
markers that confer high yields? One result could be, for example, that
Monsanto monopolizes traits that help soybean varieties that produce 10
percent more. Then, it would be able to collect tech fees on nearly 100
percent of the acres planted to soybeans, as no farmer could stay in
business growing lower yielding soybeans, and no seed company would be able
to sell soybean seed without incorporating Monsanto's patented traits.

Furthermore, the macroeconomic effect of wide scale adoption of RR soybeans
makes the tech agreement and Monsanto's iron handed enforcement of it
particularly onerous. That is, because soybeans have become easier to grow,
more of them are grown, and because a big crop in the aggregate is always
worth less than a small crop, soybeans are cheaper than they otherwise
would be. In fact, any individual benefit a farmer receives growing RR
soybeans is negated or even reversed by having to sell his crop cheaper.

As Iowa State University agricultural economist Neil Harl aptly notes in
describing a phenomenon he calls the Great Paradox, "The aggregate effect
of these crops is to increase output, but because of inelastic demand,
producers receive less money." So while farmers have to adopt new
technologies to remain competitive, that same technology puts financial
pressure on them. While this has been occurring for years, the one thing
that's different with biotechnology is that farmers are expected to give up
their traditional rights, such as seed saving. So, it should be no surprise
Monsanto expects them to give up their Fifth Amendment rights, too.

So how hard is it to stay clear of Monsanto and its tech agreement? With RR
soybeans now making up three fourths of soybean seed sales, it is hard not
to buy RR soybean seed. For example, I told my seed salesman months in
advance that I wanted six bags of short season soybean seed to plant as a
trial, as I had never grown soybeans before, not being a traditional crop
here in Colorado. I emphasized that I wanted conventional, non-GMO seed.
But when the salesman delivered the six bags, they were all RR. When I
asked the salesman why he didn't bring conventional seed, he said, "that's
all I could find in a short season variety. Take the seed, get it off my
hands." I told him, "thanks but no thanks," and he loaded the six bags back
onto his pickup.

Moreover, seed companies are combining other traits in RR soybeans. Last
year's Garst seed catalog, for instance, advertised 12 new cyst nematodes
resistant varieties as the "dirty dozen." However, all twelve were RR, so
if a farmer wanted to plant one of these new nematode resistant varieties,
he would be planting a RR variety. And, as a recent Soybean Digest article
reports, "With the exception of a handful of food-grade/conventional
soybeans, Roundup Ready varieties are the list of new selections for the
2003 planting season."

In the end, if the Supreme Court allows the Appeals Court verdict to stand,
Homan McFarling is likely to lose everything. He has a reported net worth
of $75,000 and all he'll have to show for a lifetime of hard work is a huge
debt to Monsanto. And, it will be a miracle if his health isn't affected,
too. Again, making this particularly onerous is the fact that Monsanto
eagerly introduces its patented seed into countries where it knows fully
well beforehand that it cannot prohibit seed saving, like it did in
Argentina, China, and wants to do in Brazil. In fact, it is still releasing
new varieties in Argentina, even though it cannot stop seed saving.

Perhaps if North American farmers had someone to negotiate the tech
agreement on their behalf, they would have gotten far more amenable terms.
Daniel Charles reports in his book, "Lords of the Harvest," that Pioneer
seed company paid a mere $500,000 to Monsanto for the right to use the RR
gene forever. In fact, given the volume of seed that it sells, Pioneer
could have charged no or very little tech fee, rather than following all
other seed companies in charging a uniform fee.

Monsanto doesn't have to rule with an iron hand. A chart in the USDA's
Economic Research Service report, "Agricultural Research and Development:
Public and Private Investments Under Alternative Markets and Institutions,"
shows that at least 73 percent of the soybean and cottonseed planted in
1992 was purchased new, and this is before the Plant Variety Protection Act
was tightened up in 1994. And, the share of new seed sold every year can be
even greater, if seed companies would give a little friendly encouragement
and keep the price reasonable.

Finally, it is important to remember that making crops easier to grow or
making them produce more doesn't always benefit farmers. It doesn't take a
PhD to figure out that when something is easier to grow, fewer farmers are
needed to grow it. Or alternatively, more of it gets grown, again hurting
farmers because a big crop in the aggregate is usually worth less than a
small one.

In no way does this mean that production-increasing technology should be
rejected. The point is that when farmers don't benefit upon wide scale
adoption and when consumers don't want to eat food grown with such
technology, why be in a big hurry to adopt it and spread it around the
world? Something first should be done about the terms under which
competitive pressures force farmers to eventually adopt it. Otherwise,
there are going to be thousands more farmers who find themselves in a legal
battle with an infinitely more powerful opponent.

About the author: David Dechant grows alfalfa, corn and wheat in Colorado.

Notes:

1. Monsanto did not get any U.S. patents on soybeans for discovery of
high-yield markers.

However, it still could get one on any given Tuesday! It appears to have
filed for a patent on glycine max plants and seeds. The company named the
United States as "designated state" for its patent application published
under the Patent Cooperation Treaty (publication number WO/0018963).
Extreme secrecy makes it difficult to know whether the U.S. Patent and
Trademark Office will issue a patent corresponding to the above number.

2. Monsanto has applied for another, very similar patent in the United
States. The representative patent claim is as follows:

Claim 23. "A Glycine max plant comprising an allele of a quantitative trait
locus located on linkage group U03 associated with enhanced yield in the
Glycine max plant, wherein said Glycine max plant has a yellow seed coat
and wherein said allele of the quantitative trait locus is also located on
linkage group U03 of a black seed coat Glycine max PI290136 plant and
linked to a DNA molecular marker selected from the group consisting of SEQ
ID NO: 19-37."

Patent Application Number: 10/037,598

Filed in US: 04 January 2002

Patent Owner: Monsanto

Status: Sitting in the Patent Office waiting for examination to begin.

Related item:

* 'It's time to wake up,' says grain buyer;
http://www.cropchoice.com/leadstry.asp?recid=1136

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