Bayer $750 Million Accord in Modified-Rice Case Accepted by Most Farmers

A Bayer AG (BAYN) unit said a $750 million settlement with U.S. rice farmers who sued after their crops became tainted by a genetically modified strain is binding now that the requisite number of growers has accepted the deal.

First announced in July, the agreement ended scores of cases filed against Bayer CropScience by growers in Arkansas, Louisiana, Mississippi, Missouri and Texas.

“A sufficient number of now-verified registrations for the settlement program have been filed by growers to represent 85 percent of U.S. long-grain rice acreage, a threshold point established for the agreements to become binding,” Bayer CropScience said today in a statement.

Bayer CropScience and a Louisiana State University facility in Crowley were testing a strain of the rice for resistance to Bayer’s Liberty-brand herbicide.

The genetically modified variety cross-bred with and “contaminated” more than 30 percent of U.S. rice lands, Don Downing, lawyer for the farmers, said at the first trial in November 2009.

U.S. exports fell as the European Union, Japan, Russia and other overseas buying ceased or was slowed for testing of U.S.- grown long-grain rice, growers alleged.

Bayer CropScience denied the testing program was negligently managed and claimed sale prices rebounded after the initial drop. The unit of Leverkusen, Germany-based Bayer AG said the trace amounts of the LibertyLink rice posed no threat to people.

Jury Awards

Juries in the first six cases to be tried awarded farmers about $54 million in total compensatory and punitive damages before the company settled a seventh case three days into an October 2010 trial in federal court in St. Louis.

Under the accord, farmers who sustained market losses would be paid a maximum of $116 for each acre of rice they grew, with that amount declining annually from 2006 through 2010.

A farmer who grew rice in all five years could collect a maximum of $300 an acre.

Downing, a partner at Gray, Ritter & Graham in St. Louis, didn’t immediately return a voice-mail message seeking comment on Bayer’s statement.

Another attorney for the growers, Adam Levitt, of Chicago- based Wolf Haldenstein Adler Freeman & Herz LLC, confirmed the settlement threshold had been attained.

“Hitting the threshold was a combination of the extensive efforts of the lawyers involved and the understanding of the farmers of the importance of the settlement,” Levitt said.

The case is In re Genetically Modified Rice Litigation, 06-md-01811, U.S. District Court, Eastern District of Missouri (St. Louis).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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