Tuesday, October 23, 2012

Argentine seed law to be revised to attract more biotechnology investments

The Argentine government is revising its seed law and expects that the new seed law will attract the multinational companies to increase their investment in biotechnology business, so as to promote the development of the biotechnology industry in Argentina, according to CCM’s September issue of South America Crop Protection Monthly Report.

The new seed law draft established by the National Seed Committee (CONASE) is submitted to a temporary committee organized by Argentine Ministry of Agriculture. The temporary committee's members are from the Farm Bureau and seed companies producing transgenic products, and they discuss some details of the draft at a meeting, but there is still no consensus so far.

Unlike the current seed law, the new seed law draft is mainly focused on the transgenic soybean royalty payments problem. Argentine farmers generally use the new soybean seeds generated from the old seeds bought from the seed companies without paying any royalty so as to cut the planting cost, but the new law is to prevent farmers from doing so, since this action has hurt many seed companies, thereby eroding their willingness to invest in Argentine biotechnology business. Corn planting area is the second largest in Argentina, but different from soybean seeds, corn's pollination process dilutes the transgenic traits quickly and farmers need to buy corn seeds directly from the companies every year to enjoy the yield-enhancing benefits.

Currently, the main argument is how to implement the royalty payments for the seed companies in the future. It is estimated that the new law will be continuously debated over the next few months and the Ministry of Agriculture is optimistic that the Congress may pass the draft at the end of 2012. "We've decided to push forward the seed law draft in an effort to prompt Argentina to be a leader in food production," Agriculture Minister Norberto Yauhar said in a press release in Aug. 2012. Although the new seed law will raise the farmers' cost in planting soybean, the yield-enhancing benefits brought by the new transgenic soybean seeds such as the new products made by Monsanto and the promising future of soybean processing industry in Argentina will guarantee the farmers' interest to some extent.    
As the new seed law will have the potential to improve the income from the seed royalty payments, many multinational enterprises are optimistic about the future of the Argentine biotechnology market.
Carlos Becco, Director of Syngenta Soybean Department in Argentina, believes that the establishment of the new seed law is a good news for the country, which not only helps his company increase the competitiveness in Argentina, but also creates more favorable conditions for attracting new investment in Argentina. The data statistics reflect the importance of the royalty payments in biotechnology investment. According to the information of the seed industry, the R&D of a new event represents an average investment of USD136 million and an average term of 13 years. 
The new seed law will help companies recoup their investment in a shorter period and improve companies' willingness to invest in new programs, thereby promoting the development of biotechnology. Among the biotechnology companies, Monsanto will become the biggest beneficiary when the new seed law is officially launched. Recently, transgenic soybeans planted in Argentina are mainly the Roundup Ready (RR) soybean produced by Monsanto. 
As the new seed law will be launched in the future, it is believed that the transgenic business in Argentina will recover, regaining the competitiveness against Brazil and even returning to the dominating position in South America.
Before 2006, the total authorized transgenic products in Argentina surpassed Brazil, dominating the biotechnology field in South America. But in 2006, the Brazilian government established a country-level biotechnology policy which redesigned the regulatory framework for transgenic application process. This policy streamlined the application process and made the benefits obtained by seed companies more reasonable. Thanks to Brazilian government's action, biotechnology investment environment in Brazil gradually became attractive and many multinational enterprises decided to develop their biotechnology business in Brazil instead of Argentina.  
In addition to the multinational companies, Brazilian enterprises are also willing to invest in biotechnology business under the favorable policy. For instance, an imidazolinone tolerant soybean co-developed by Brazilian Agricultural Research Corporation (Embrapa) and National Institute of Agricultural Technology (INTA) now is at the final stage of testing and will be launched in the coming years.
Due to the lack of the royalty protection in Argentina, the transgenic development in Argentina has stagnated and is surpassed by Brazil. According to the statistics, adding the new soybean and corn from Dow AgroSciences approved by the Argentine government, Argentina has approved a total of 27 events including corn, soybeans and cotton as of Aug. 2012, compared with 33 in Brazil. Argentina has more maize events approved than Brazil, 20 versus 18. As for soybeans, 5 events have already been authorized in Brazil, versus 4 in Argentina.  

Source: South America Crop Protection Monthly Report 1209

Content of South America Crop Protection Monthly Report 1209
GM crops help increase consumption of pesticides in Brazil
Soybean seed in Brazil may be in short supply in 2012/13
Venezuela to import more rice by exporting urea
Brazil sells rice in stock
Brazil to invest USD18.9 billion in fertilizer industry
Pesticide companies face difficulties in registration in Latin America
Brazil extends credit limit for corn planting
Argentine seed law to be revised to attract more biotechnology investments 
Cheminova's Authority ® gets registration in Brazil 
Proficol enters Peru pesticide market
Ecuadorian government continues efforts to control snail plague
Argentina starts new round of control for grapevine moths
Cassava pests may break out in Southern Brazil
Brazilian transgenic planting area to increase by 12% in 2012/13

South America Crop Protection Monthly Report , a monthly publication issued by CCM International on 31th of every month, offers timely update and close follow-up of South America's  Crop Protection industry dynamics, analyzes market data and finds out factors influencing market development.

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