SAO PAULO -- Brazil's agriculture minister apparently overstepped his bounds when he said he'd let U.S. biotechnology giant Monsanto Co. (MON) sell genetically-modified seeds to the world's second-biggest soybean grower.
The unexplained attempt by Agriculture Minister Marcus Vinicius Pratini de Moraes to trump a three-year court battle sent Monsanto's shares rallying, but a subsequent legal filing has cut short the company's celebration by forcing the dispute back into the courts.
And the outlook for Monsanto getting GMO approval in Brazil looks increasingly bleak. Besides the legal battle that consumer and environmental groups are fighting here, reports that European researchers found unidentified genetic material in the soybeans, provided local activists with further ammunition.
On July 24 - just one day before Monsanto posted second-quarter results that showed flat revenue growth - Pratini told investors in New York that Brazil would allow the sale of Roundup Ready soybeans. Hopes of bigger sales in Brazil helped Monsanto shares to spike 6.9% on July 25 to $34.26.
But a subsequent court filing by a public prosecutor dashed Monsanto's hopes, at least for now. A federal judge asked Pratini to clarify his position, pointing out the decision appeared to have ignored a court ruling requiring environmental impact studies in such cases.
"I don't know what made the minister think he can just trump the justice system, because he simply doesn't have the power to do so," said Aurelio Rios, a federal prosecutor working the case.
An Agriculture Ministry spokesman declined to comment on Pratini's motives, saying only that "the minister always intended to wait for a judicial resolution before making a decision (on the approval of Monsanto soy)."
After being notified by the judge, Brazil's agriculture minister reversed his position on Aug. 8 and said he would only register the herbicide-resistant soybeans when the issue is eventually resolved in the courts.
News of the reversal sent Monsanto's shares plummeting the next day on Wall Street, dropping 5.6% to $33.50.
Meanwhile, the obstacles facing Monsanto continue to mount. Earlier Friday, Brazil's biosafety commission moved on reports out of Europe and said it intends to request additional information from Monsanto about the make-up of Roundup Ready following the discovery of an unidentified DNA sequence in the product.
In a statement regarding the DNA sequence, Monsanto said that it stands by the safety of Roundup Ready soybeans because the DNA sequence mentioned in the scientific paper was already present in original crops subject to safety tests when the product was launched.
Government Makes No Secret Of Support For GMOs
The pro-technology minister's move has opened a debate as to why he apparently tried to sidestep the legal process. While the ministry keeps mum on the matter, consumer protection activists and other observers have their own theories.
"It was a bluff," said Andrea Salazar, an attorney for Brazil's consumer protection agency, one of the petitioners in the original lawsuit against Monsanto that ended up creating a de facto moratorium on GMOs in Brazil.
"From the beginning of this case Pratini has bent over backwards to try and help Monsanto get their soybeans approved in Brazil, and what he said in New York is just another example," she added.
Activists have long complained that Brazil's government has never been neutral in the GMO debate. Rios, the federal prosecutor handling the case, said Pratini's recent comments have only made matters worse.
"The minister was imprudent, and that's going to create an even bigger cloud of suspicion over the government on this matter," he said.
Rios added that Monsanto recently asked the Agriculture Ministry's legal department to review the case against them, possibly in an attempt to pressure the ministry into speeding up the lagging approval process.
Monsanto officials in Brazil were unable to be reached for comment.
While Pratini's back-tracking is a setback to Monsanto's GMO quest in Brazil, it doesn't appear to be a fatal blow.
In a recent research note, UBS Warburg said "we see the stops and starts as signs the government is trying to put all its ducks in a row before granting biotech commercialization," and that it has "no doubt that ultimately biotech beans will be approved in Brazil."
If that is to happen, though, Monsanto will first have to conclude an environmental impact study. The company has said it hopes to conclude the study in time for Brazil's next planting season, in October, but most analysts are now betting on 2002 at the earliest.
"When Pratini made those comments, the market assumed they (Roundup Ready soybeans) would be approved before winter, but now that looks unlikely," said Sergey Vasnetsov, an analyst with Lehman Brothers in New York.
(Corrected 2228GMT)
After being notified by the judge, Brazil's agriculture minister reversed his position on Aug. 8 and said he would only register the herbicide-resistant soybeans when the issue is eventually resolved in the courts.
(In an item timed about 5:21 p.m. EDT (2121 GMT), it was misstated that the soybeans are disease-resistant.)
|
If you have come to this page from an outside location click here to get back to mindfully.org |