ST. LOUIS--(BUSINESS WIRE)--Monsanto Company (NYSE: MON) today expressed its disappointment that recent discussions with the Ministry of Agriculture and previous areas of alignment have yet to result in a mutually agreeable solution for soybean growers, the broader agriculture industry and the Government of Argentina. Therefore, as a result of its obligations to its farmer customers worldwide, who expect and deserve a level playing field, as well as the company’s owners, Monsanto is reinforcing its commitment to enforce its private contracts and intellectual property rights both inside and outside Argentina.
Additionally, until such time that there is further clarity within Argentina on a predictable way to collect royalties on the value new patented soybean technologies bring, the company plans to take measures to protect its current assets and will suspend launching any future soybean technologies in the country, including Roundup Ready 2 Xtend™ soybeans.
“We were optimistic that a solution would be secured to allow the legally operating soybean technology royalty system to continue uninterrupted following recent discussions between the Ministry of Agriculture for Argentina and the soybean industry stakeholders,” said Brett Begemann, Monsanto President and Chief Operating Officer. “While the Government of Argentina has acknowledged to us that they were committed to supporting a conducive environment for continued investment and further long-term development of agriculture through recognition of intellectual property rights and a recognition of private agreements, the recent actions are not consistent with that position. Both endorsing and actively supporting these basic principles are necessary to create a predictable business environment, which invites foreign investment.”
During conversations, the soybean industry stakeholders heard the Minister of Agriculture’s concerns with the existing system, which has been legally operating for more than a year, and responded with several proposals. Unfortunately, the parties were unable to come to a mutually agreeable solution.
“While Monsanto is concerned that the recent government actions may adversely affect its private agreements, the company remains committed to engage in dialogue with the Government of Argentina to try and find a solution that will help encourage and spur new investments in Argentina,” Begemann added.
In light of the continued evolving business environment in Argentina, the company is doing a full review of its business plans and projections for Argentina and will assess any implications to its balance sheet and earnings.
Additional Background
For the growers who choose to use Intacta RR2 PRO™ soybean technology, the payment of royalties provides Monsanto and its owners with a return on the significant investments made for the development of the technology and the added value that is delivered to and recognized by growers, while allowing for re-investment in new technologies. The system in Argentina offers growers who choose to use the technology the choice and flexibility in payment timing. These royalties can be paid at the time of purchase of certified seed and at various points along the way up to and after the point of grain delivery.
Growers in Argentina have many choices, including whether or not to use Intacta RR2 PRO™ soybean technology. Until last season, this technology was not available and growers controlled insects through the use of conventional pesticides, an option that is still available to them. Growers switched to the new Intacta RR2 PRO™ technology because the system offers them more value than their previous practices. As an indication of the value of this technology, University of Buenos Aires estimates that Intacta RR2 PRO™ soybeans could provide Argentina with an economic benefit of $3.5 billion over the next five years.
About Monsanto Company
Monsanto is committed to bringing a broad range of solutions to help nourish our growing world. We produce seeds for fruits, vegetables and key crops – such as corn, soybeans, and cotton – that help farmers have better harvests while using water and other important resources more efficiently. We work to find sustainable solutions for soil health, help farmers use data to improve farming practices and conserve natural resources, and provide crop protection products to minimize damage from pests and disease. Through programs and partnerships, we collaborate with farmers, researchers, nonprofit organizations, universities and others to help tackle some of the world’s biggest challenges. To learn more about Monsanto, our commitments and our more than 20,000 dedicated employees, please visit: discover.monsanto.com and monsanto.com. Follow our business on Twitter® at twitter.com/MonsantoCo, on the company blog, Beyond the Rows® at monsantoblog.com or subscribe to our News Release RSS Feed.
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are “forward-looking statements,” such as statements concerning the company’s anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company’s actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company’s exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public understanding and acceptance of our biotechnology and other agricultural products; the success of the company’s research and development activities; the outcomes of major lawsuits; developments related to foreign currencies and economies; pursuit of acquisitions or other transactions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company’s estimates related to distribution inventory levels; the recent increases in and expected higher levels of indebtedness; the company’s ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters, accidents, and security breaches, including cybersecurity incidents, on the agriculture business or the company’s facilities; and other risks and factors detailed in the company’s most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
