Thursday, September 29, 2011
Judge sides with grain company
By Mateusz Perkowski
September 29, 2011
A major biotech seed developer won’t be able to force a global grain elevator company to accept its genetically engineered crop.
A federal judge has refused to order the Bunge North America grain company to accept insect-resistant corn developed by Syngenta Seeds.
A conflict erupted between the two companies this summer when Bunge announced it wouldn’t accept Syngenta’s “Agrisure Viptera” corn at its elevators, since the variety hasn’t been approved for shipping to China.
Syngenta countered by filing a legal complaint against Bunge, alleging the firm had violated a 95-year-old warehousing law that prohibits elevators from unfairly discriminating among farmers who seek storage.
The company sought a preliminary injunction that would stop Bunge from exercising its policy of rejecting Agrisure Viptera corn from its facilities.
U.S. District Judge Mark Bennett in Iowa has rejected Syngenta’s arguments, ruling that the company has wrongly interpreted the 1916 United States Warehouse Act.
Syngenta is unlikely to succeed on the merits of the case because it’s up to the USDA to enforce the anti-discrimination principles of the warehousing law — private parties aren’t allowed to sue each other over those provisions, Bennett said.
Even if the law allowed for such lawsuits, Syngenta couldn’t sue for violations of the anti-discrimination principles because it’s a seed developer, not a person who wants to store grains, the judge said.
If Bunge were forced to accept the Agrisure Viptera variety, the firm would spend millions of dollars segregating it from corn that’s headed to China, the judge found.
Such losses would exceed the harm suffered by the biotech company due to the distrust the episode has inspired in some farmers, especially since Syngenta took a risk in marketing the crop without China’s approval, Bennett said.
“While I acknowledge that Syngenta does face a substantial threat of reputational harm in the absence of a preliminary injunction, I am not convinced that the harm is of Bunge’s making,” he said.
In a statement, Bunge said the ruling validates the company’s rejection of Agrisure Viptera corn as a “reasonable business decision.”
Syngenta released a statement saying it will continue to “secure greater clarity for growers” who want to use new transgenic crops.
The dispute is unfortunate for farmers who have been caught between the two agribusiness giants, said Doug Jones, executive director of Growers for Biotechnology, a policy group.
Farmers who expected to deliver Agrisure Viptera corn to a nearby Bunge elevator will have to find another market for their crop, most likely at greater distance and expense, he said.
“There’s no way the farmer comes out ahead on this,” Jones said.
Over the long term, biotech developers may be more reluctant to quickly introduce new transgenic cultivars to the market and farmers may think twice about planting such varieties, he said.
That’s one point upon which the Center for Food Safety, a biotech critic group, can agree.
“Clearly, this will have a chilling effect on growers thinking about growing any variety not approved in export markets,” said Andrew Kimbrell, executive director of the group.
The dispute demonstrates that U.S. biotech and agribusiness groups will have to adapt to foreign attitudes toward transgenic crops, he said.
Other countries often aren’t sympathetic to genetic engineering, which can harm important U.S. export markets, he said.
“I think the behavior here is going to have to change,” Kimbrell said. “International behavior is not going to change.”