UPDATE - Monsanto Brazil seeks royalties for illegal RR soy
Tuesday May 6, 12:46 pm ET
Inae Riveras

(Adds Greenpeace protest details, paras 7-10)

SAO PAULO, Brazil, May 6 (Reuters) - The Brazilian unit of U.S. farm products maker Monsanto Co. (NYSE:MON - News) said it was seeking royalties for the illegal use of the firm's trademark genetically-modified "Roundup Ready" (RR) soybeans in Brazil.

"The recent formal evidence of illegal planting of RR soy in Brazil was one of the principal reasons that motivated Monsanto to open discussions with diverse segments of the soy production chain to guarantee intellectual property rights," Monsanto said in a statement released late Monday.

The production and sale of GM soy are banned in Brazil, but illicit GM soy planting has grown rapidly in recent years as farmers, mostly in the south of the country, are believed to be smuggling in RR soy seeds from Argentina and Paraguay where they are planted legally.

By unofficial estimates, about 30 percent of Brazil's current soy crop may be black market GM soy. Brazil, the world's No. 2 soybean producer after the United States, is expected to finish harvesting a record 49.6-million-tonne crop in May.

For several years, the Brazilian government turned a blind eye toward the black market in soybeans. But this year, the new administration of President Luiz Inacio Lula da Silva officially recognized for the first time that illegal GM soy planting was taking place on a wide scale.

Rather than face the daunting task of destroying up to a third of the national crop, the government in March issued a decree decriminalizing the sale of GM soy until January 2004, after which it will again become illegal.

Environmental campaigners and longtime GM opponents Greenpeace protested the government decree before Congress on Tuesday. Representatives drove a tractor symbolizing Monsanto over signs portraying the environment, food safety and Brazilian law.

"The measure benefits Monsanto by allowing it to sell a product that has not passed any type of evaluation and violates a judicial ruling that demands studies on environment impact and food safety or norms on labeling," said Mariana Paoli, a Greenpeace biotechnology specialist.

RR soy has passed several international environmental and food safety studies, but has not yet completed such testing in Brazil. Monsanto's RR soy was approved for sale in Brazil by the National Council on Biotechnology in 1998.

But Greenpeace and local consumer watchdog IDEC secured a court order demanding the company complete a five-year environmental study in Brazil before selling its RR soy in Brazil.