Monsanto Sues Farmer Customers Over Piracy Issues
The seed company's efforts to protect its technology often turn farmer against farmer
PAUL ELIAS (AP) and ANNE FITZGERALD / Des Moines Register 30jan2005
Monsanto Co.'s "seed police" caught Bill Quick in 1998, forcing the Redding, Iowa., farmer to settle out of court for a five-figure sum.
Quick's mistake: He saved Roundup Ready soybeans from one year to plant the next year's crop.
The agribusiness company has won millions in judgments and settlements from farmers it has accused of technology piracy.
"They're trying to make an example out of people," said Quick, who raises row crops and cattle in Ringgold County. "It hurt quite a bit, but it didn't put us out of business."
Saving Monsanto's seeds, genetically engineered to resist bugs and weed-killing sprays, violates provisions of the company's contracts with farmers.
In a case a year ago, Tennessee farmer Kem Ralph was sued by Monsanto and sentenced to eight months in prison after he was caught lying about a truckload of cotton seed he had hidden for a friend.
Ralph's prison term is believed to be the first criminal prosecution linked to Monsanto's crackdown. Ralph has also been ordered to pay Monsanto about $1.7 million.
Since 1997, Monsanto has filed similar lawsuits 90 times against 147 farmers and 39 agricultural companies from 25 states, according to a report issued recently by the Center for Food Safety, a Washington, D.C., organization that has been critical of biotechnology. Many of the lawsuits have been settled out of court. The amounts that farmers agreed to pay Monsanto generally have not been disclosed, although a North Carolina farmer settled for $1.5 million, the report said.
So far, Monsanto has won more than $15 million in judgments, ranging from $5,595 to more than $3 million.
Nineteen cases are ongoing, including one filed by Monsanto last summer in response to a class-action lawsuit brought earlier against the St. Louis agribusiness by 27 farmers and companies in 13 states, including Iowa.
At least six lawsuits filed by Monsanto have involved Iowans, the report showed.
Monsanto sued in January 2002. It was dismissed without prejudice that spring, but Monsanto sued the Ellsworth company and its owner, Mark Hill, the following year. That case is still pending, and Monsanto is seeking $75,000 from Hill.
Two other cases involving Iowans resulted in judgments for Monsanto - one for $175,000 and another for $1 million.
The company itself says it annually investigates about 500 tips that farmers are illegally using its seeds and settles many of those cases before a lawsuit is filed.
In this way, Monsanto is attempting to protect its business from pirates in much the same way the entertainment industry does when it sues underground digital distributors exploiting companies' music, movies and video games.
In the process, Monsanto has turned farmer on farmer and sent private investigators into small towns to ask prying questions of friends and business acquaintances.
Monsanto's licensing contracts and litigation tactics are coming under increased scrutiny as more of the planet's farmland comes under cultivation for genetically engineered crops.
Some 200 million acres of the world's farms grew biotech crops last year, an increase of 20 percent from 2003, according to a recent report.
Many of the farmers Monsanto has sued say that they did not read the company's technology agreement close enough. Others say they never received an agreement in the first place.
Still others have claimed that their signatures were forged on agreements with Monsanto, said Joe Mendelson, a lawyer who works for the Center for Food Safety.
"You've got some pretty angry farmers out there," he said.
The company counters that it sues only the most egregious violations and is protecting the 300,000 law-abiding U.S. farmers who annually pay a premium for the company's seed technology. Soybean farmers, for instance, pay a "technology fee" of about $6.50 an acre each year.
Some 85 percent of the nation's soybean crop is genetically engineered to resist Roundup, a trait many farmers say makes it easier to rid their fields of weeds and ultimately cheaper to grow their crops.
"It's a very efficient and cost-effective way to raise soybeans, and that's why the market has embraced it," said Ron Heck, who grows 900 acres of genetically engineered soybeans outside of Perry, Iowa.
Heck, who is also chairman of the American Soybean Association, said he does not mind buying new seed each year and appreciates Monsanto's crackdown on competitors who do not pay for their seed.
"You can save seed if you want to use the old technology," Heck said.
Even some of the farmers sued by Monsanto agree.
"It's not all Monsanto's fault," said Quick. "I can see both sides."
The company said the licensing agreement protects its more than 600 biotech-related patents and ensures a return on its research and development expenses, which amount to more than $400 million annually.
"We have to balance our obligations and our responsibilities to our customers, to our employees and to our shareholders," said Scott Baucum, Monsanto's chief intellectual property protector.
Still, Monsanto's investigative tactics are sowing seeds of fear and mistrust in some farming communities, company critics say.
Baucum acknowledged that the company walks a fine line when it sues farmers.
"It is very uncomfortable for us," Baucum said. "They are our customers, and they are important to us."
Related: Prosecuting American Farmers: Monsanto's Investigations, Coerced Settlements & Lawsuits - Center for Food Safety 12jan05