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Genetically Modified Soybean Seed Patent Expiry

Apr 03, 2018



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  • 7/28/2019 Genetically Modified Soybean Seed Patent Expiry


    Impact of GM Soybean Seed Expiry

    MARCH | 2011

    Copyright Beroe Inc, 2011. All Rights Reserved 1

    GM Soybean Seed Patent ExpirywillencouragemorefarmerstouseGMsoyseed




  • 7/28/2019 Genetically Modified Soybean Seed Patent Expiry



    Due to the simplicity o the GM RR soy system, itsadoption by armers has increased. In the United Statesand Argentina, over 90% o soy crops were made up o theGM RR variety in 2009. Today, GM RR varieties dominatesoy production in North America and Argentina and arewidely cultivated in Brazil, Paraguay, Uruguay, and Bolivia.Globally, 77% o the soybean that is harvested comesrom GM soy seeds. In the US, 91% o the soy harvesteds rom GM soy seeds.


    n the last three years, US seed prices increased by 64%.n addition, Monsantos licensing royalty ees drove uphe price o Roundup Ready soybean seed to $15.65 per

    bag rom only $6.50 in 2000. DuPont Pioneer Hi-Bredannounced a 35% increase in soy seed in 2009 and isprojecting double-digit price hikes in 2009-2013. Thesedrastic price hikes have slowly begun to rustrate growersand have led some producers to look or GM seed o lowerquality at lower prices. A recently released 35-year study

    conducted by the Organic Center on seed pricing indicated

    that armers spent 4-8% o their arm income on seeds uptill 1997. Now, however, they spend an average o 16.4%o their income on genetically modied soybean.


    The patent or the Roundup Ready soybean seed isscheduled to expire in August 2011 in Canada. As a result,more armers are expected to use GM soy seed instead onon GM seed or cultivation. Currently, more than 60%o soybean acreage in Canada uses the Roundup Readysystem. In the United States, this same seed technologywill remain under US patent protection until 2014.

    Major Milestones

    The Roundup Ready soybean seed patent is set to expire

    in August 2011.

    Contract obligations prohibiting the saving of GM seeds

    under the Technology Stewardship Agreement willremain in eect in 2011.

    A farmer may decide to buy certied Roundup Ready

    seed rom a company holding a valid license or RoundupReady soybean without any contractual obligations orroyalty payment to Monsanto in 2012.

    A farmer may decide to save seeds from its 2012 harvest

    or replanting in 2013, as long as the seed companyrom which it purchased the seed does not have anycontractual obligations preventing it rom doing so.

    A Canadian farmer may decide to plant soybean saved

    rom his/her own seeds in 2013.

    Copyright Beroe Inc, 2011. All Rights Reserved 2

    INTRODUCTIONGenetically modied Roundup Ready (GM RR) soy was developed by Monsanto and was rst commercialized inhe United States in 1996. Due to the RR gene, a crop can be sprayed with glyphosate, which kills weeds and other

    plants but allows the crop to continue to grow. Farmers across the world nd it dicult to buy and cultivate GMcrops due to the high costs involved. Farmers must pay a licensing ee and sign a contract with the biotechnology

    company or limited permission to plant patented seeds or a single crop season. The percentage a armer spendson seeds has almost doubled in the last 20 years. As a result o high productivity, however, more than 80% o soyharvest is currently rom GM seeds.

    Serious saety concerns about the transgenic modications introduced into GM RR soy have been raised. Contraryo claims by the GM industry and its supporters, the US Food and Drug Administration has never approved GM soy

    seed as sae. A number o studies have revealed that health hazards and toxic eects are associated with GM RRsoy. The debate between natural ood and GM seed adoption is largely based on various economic and agriculturalproductivity benets, as well as health and environmental costs.

  • 7/28/2019 Genetically Modified Soybean Seed Patent Expiry

    3/4Copyright Beroe Inc, 2011. All Rights Reserved 3


    Soybean Seed

    Production costs vary depending on location, croppingsystems, and fuctuations in energy prices. The majorexpenditures in soybean production include planting,harvesting, seed, and pesticides. On average, the total costo irrigated soybean is around $400 per acre. Ater thepatent expires in the US and Canada, the production costwill decline signicantly and allow more armers to useGM soy seed.


    Socioeconomic Impact

    Public health and socioeconomic concerns have beenraised in various regions where GM soybean seed is used.According to experts, it has decreased domestic oodsecurity and ood buying power among a signicant sectoro the population. In addition, this seed promotes inequalityn wealth distribution.

    Other Major Concerns

    Farming populations will be displaced and forced to

    relocate to the cities o Argentina.

    A few large-scale agribusiness operators will control themajority o agricultural production.

    The diversity of food production will reduce and fewer

    people will be able to access a varied and nutritiousdiet.


    n its Third Assessment Report (TAR), the Inter-governmental Panel on Climate Change concludes thathuman activities are the main contributors to globalwarming. Each nation is adopting measures to combatssues related to climate change. Global initiatives have

    been taken up by governments and companies to reducehe impact o their operations on the environment. As

    a result, the use o biouels as a sustainable source o

    uel is increasing. The two major eedstocks used or theproduction o biouels are corn and soybean oil.

    The greenhouse gas (GHG) emissions o corn-basedethanol range rom 1.1- 2.0 kg o CO2 equivalent perkilogram o ethanol, while GHG emissions o soybean

    oil are just 0.4-2.5 kg o CO2 equivalent per kilogramo soybean oil. Hence, soy is expected to be the obviouschoice among biouel producers i the price o soy reducesin the uture.


    The patent or GM RR soy seed is set to expire in 2011in Canada and 2014 in the US. Consequently, a armersproduction cost is expected to all by around 50%.The

    decline in costs will induce armers to plant soybeaninstead o other crops, such as corn and sugarcane, whichwill increase the production o soybean.

    Soybean prices are expected to drop by 50-100 cents/bushel due to the expiry o the soybean GM seed patent.The projected all in the price o soybean is expectedto drive the use o soybean oil as a major eedstock orthe production o biouels. A 2009 lie cycle analysiso biodiesel done by the USDA ound that soy biodieselyields 4.56 times the ossil energy needed to produce it.

    In comparison, petroleum diesel has a ossil energy rationo only 0.84.









    2 005 2 006 2 007 2 008 20 09 20 10 20 14 20 20

    Global Soybean P roduction (Thousand Metric Tons)

    CAGR 2007-2010: 4.7%


    CAGR 2014-2020: 10.2%

  • 7/28/2019 Genetically Modified Soybean Seed Patent Expiry


    Disclaimer: Strictly no photocopying or redistribution is allowed without prior written consent rom Beroe Inc.The inormation contained in this publication was derived rom careully selected sources. Any opinions expressedrefect the current judgment o the author and are subject to change without notice. Beroe Inc accepts no responsibilityor any liability arising rom use o this document or its contents.

    For more inormation, please contact


    Saurabh Goyal | Senior Research Analyst

    Source:Industry Experts, Soybean Associations, FAPRI, USDA and Suppliers Website

    Copyright Beroe Inc, 2011. All Rights Reserved 4