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Cablegate: Monsanto Argentina President On Seed Royalty Issue

VZCZCXYZ0009
RR RUEHWEB

DE RUEHBU #1153 2281247
ZNR UUUUU ZZH
R 151247Z AUG 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1791
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 001153

USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: EAGR ECON AR
SUBJECT: MONSANTO ARGENTINA PRESIDENT ON SEED ROYALTY ISSUE

1. (SBU) Summary: Juan Ferreira, outgoing president of Monsanto
Argentina, met with the Ambassador to say farewell prior to his new
assignment to Europe and to thank the Ambassador for his support for
Monsanto in dealing with the GOA. Ferriera noted a decision by the
GOA to impose additional duties on Monsanto's pesticide imports from
production plants in Brazil (the GOA is claiming that the Brazilian
content is not sufficient qualify for Mercosur duty-free treatment)
and Monsanto's strategy of focusing on ensuring adequate IPR
protection for new GMO seed technologies that it hopes to introduce
to the Argentine market in the future. Ferriera also discussed
development of new agricultural technologies and the impact they
will have on production in Argentina. Subsequently, Ambassador was
able to support Monsanto's agreement with Chaco province to work
with local cotton farmers on using biotechnology to improve
production. End Summary.

2. (SBU) Ferriera requested the meeting with the Ambassador on July
22 to discuss Monsanto's domestic operations and to thank the
Ambassador for the support and advise he has provided for Monsanto
in its dealings with the GOA. Ferriera stated Monsanto has
frequently been the target of the Argentine government and noted
that the most recent incident was the decision of the GOA to charge
additional duties on Monsanto pesticide imports from its production
plants in Brazil. The GOA is alleging that the Brazilian content is
insufficient to qualify for duty-free treatment under Mercosur
internal free trade rules. Ferriera stated that Monsanto is quite
certain that it is complying with Argentine and Mercosur
requirements and will be appealing the decision.

3. (SBU) Ferriera reviewed the ongoing dispute over payment of
royalties for seeds using Monsanto's technology, including Round Up
Ready seed varieties. He explained that Monsanto is continuing its
revised strategy of focusing on the future and ensuring IPR
protection for new technologies that it will be introducing in the
future. Monsanto would like to see in Argentina a similar system to
the royalty collection system now in place in Paraguay and Brazil.
In both countries, producers are paying for the seed technology they
are using and part of the money is being used to development new
technologies specific to those countries.

4. (SBU) Monsanto did not have high-profile discussions with the
GOA on the royalty issue during the extended farm strike, but it has
maintained contacts with farm organizations and provincial governors
to build support for a system to ensure that suppliers are paid for
introducing new technologies to improve production in Argentina. In
response to the Ambassador's question about technologies that will
be available if Monsanto can resolve the issue of royalties,
Ferriera explained that new soybean seed varieties will allow
Argentine producers to increase yields by 10 to 15 percent.
Monsanto also has available technology for significantly improving
yields for cotton varieties.

5. (SBU) Ferriera said that Monsanto was having good discussions
with cotton producers expanding use of Bt cotton in Chaco province
in the north of Argentina and helped to expand cooperation there.
On August 12, Monsanto signed a cooperation agreement with the
governor of Chaco province. Ambassador was able to support this
effort in an op-ed carried August 13 in Chaco's leading daily and in
conversations with the governor on this same day. Governor
Capitanich was very enthusiastic about working with Monsanto to
improve and expand local cotton production.


6. (SBU) COMMENT: The weak Argentine rules on IPR enforcement for
seed varieties remain a significant impediment for U.S. companies
that wish to introduce new seed technology in Argentina. The
current emphasis of Monsanto on highlighting new yield-enhancing
technologies that could be made available is an approach we support,
as they work to build support for improvements in IPR protection in
genetically modified seed stock. The Embassy agriculture section is
currently working with Monsanto to organize the visit of a group of
Argentine journalists to the U.S. to learn about new technologies
and the importance of IPR protection. Ambassador will meet the
journalists August 15. END COMMENT.

WAYNE

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