Source: Reuters via Checkbiotech

Argentina's government and biotechnology firms have agreed on the key points of a proposed compensation fund for companies hurt by illegal trading in genetically modified seeds.

The government announced the breakthrough on Tuesday, three months into talks with companies that were launched after global biotech pioneer Monsanto stepped up pressure to charge royalties on soybeans exported from Argentina. "In these three months we've made strong progress and we are now ready to begin drafting the necessary legislation so that seed trade in Argentina is transparent, once and for all," said Agriculture Secretary Miguel Campos in a statement.

"In 30 days we could put a full stop to this issue," he added.

The goal of Argentina, the world's No. 3 soybean producer, is to send a bill to Congress for the creation of a "technology compensation fund" for makers of GMOs, or genetically modified organisms.

The government aims to have the compensation fund set up for all types of seeds in the 2005/06 growing season.

Monsanto is pushing hard to recover millions of dollars in lost revenue in three South American countries where farmers have sown its engineered soybean seeds, called Roundup Ready, without paying royalties.

Argentina's seed business is worth an estimated $1 billion a year and the prosperous black market is mainly in soybeans, the country's top crop and biggest export.

Farmers in Argentina widely use Monsanto's "Roundup Ready" seeds. The pirated seeds produce soy plants resistant to Monsanto's' Roundup Ready herbicide and make growing soy crops cheaper.

In the agreement signed by the government, companies and producers - a copy of which was obtained by Reuters - the parties agree the extra charge will be applied at the moment the commodity changes hands in Argentine markets and will not be a tax on production.

Monsanto says only 18 percent of the 14 million hectares of soybean crops in Argentina are seeded with certified seeds and sold in the legal market.

© Reuters 2004