July 24 (Bloomberg) -- Monsanto Co., the world’s largest seed company, is offering Brazilian farmers a 16 percent discount on its newest genetically modified soybeans if they drop claims that patents on older beans expired years ago.
Monsanto’s insect-fighting Intacta soy went on sale today in Brazil for 115 reais ($51.23) per hectare, the St. Louis-based company said in a statement. Farmers who agree to release Monsanto from patent claims will pay 96.50 reais for the next four years, it said.
Grower groups have argued that the patent on Monsanto’s older Roundup Ready soybean seeds expired in 2010 and the company should repay royalties collected since then. Monsanto says Brazilian law extends the patent to late 2014.
The Mato Grosso State Growers Federation, which represents farmers in the Brazilian state, said today in an e-mailed statement they agreed to drop their patent claims.
Introduced in the 1990s, Roundup technology lets crops survive applications of Roundup herbicide. Monsanto has excluded Brazilian royalties on Roundup Ready soybeans from its 2013 earnings forecast because of the dispute.
Intacta, engineered to tolerate Roundup and kill insects, creates a 100 million-acre sales opportunity in Latin America, Monsanto said last month. Intacta is the first seed Monsanto created specifically for the Latin American market. It’s engineered to kill insects by producing an insecticidal protein derived from Bacillus thuringiensis, or Bt, a technology similar to one widely used in corn and cotton.
“Intacta pricing is welcome news for Monsanto shareholders and validates the impressive value offer delivered from higher yields and reduced insecticide applications,” Robert Koort, a Houston-based analyst at Goldman Sachs Group Inc. who rates the shares a buy, said in a note today.
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