Mosanto may exit biotech seed business from Argentina

US-based Monsanto may withdraw its biotech seed business from Argentina as it faces issues in collecting royalties for genetically engineered (GE) soybeans.

The firm has discussed with President Mauricio Macri’s administration and industry representatives to find a mutually agreeable solution for soybean growers and the value chain for a soybean technology royalty system in the country.

According to Monsanto, the royalty collection plan is essential to regain investment put on GE soybeans, which are claimed to repel destructive worms, enabling farmers to reap profits on their investments.

Monsanto began selling the GE soybean seeds in the country approximately two years ago, reported The Wall Street Journal.

The government had questioned the company’s royalty-collection model, where some farmers pay the fees upfront while others pay when they supply their crops to grain elevators and exporters.

The company is also concerned about the country’s currency value.

These reasons have led Monsanto to review its biotech seed business in Argentina, where the company earned 5.8% of its $15bn sales in the 2015 fiscal year.

In addition, the company is also facing challenges in other overseas markets. For instance, the EU is yet approve a new variety of soybean.

Some traders are worried that there could be trade disruptions if Monsanto does not secure approval by the time US farmers begin harvesting roughly two million acres of soybean being planted this year.

In India too, the agriculture ministry issued price controls over genetically modified cotton.