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Brazil state wants GM-free zone, soy growers don't

(Thursday, Oct. 9, 2003 -- CropChoice news) -- Inae Riveras, Reuters, 10/07/03: SAO PAULO, Brazil - Less than two weeks after Brazil legalized genetically modified soybeans, its No. 2 soy state Parana is set to make them illegal again, to the chagrin of its farmers.

The state bill has the support of the governor, and the legislative assembly is expected next week to approve the measure that would force its soy producers into a GM-free niche market.

"There is a specific demand for conventional soy, above all from Asia, involving exclusive long-term contracts (to supply it) with differentiated payments," said Felisberto Batista, a director in the Parana agriculture Secretariat.

Brazil was the last agricultural exporter of its size to prohibit GM crops, although soy farmers have ignored the ban for several years and smuggled illegal transgenic soy seeds from neighboring Argentina where they are widely planted.

Vice President Jose Alencar signed a temporary decree last month legalizing GM soy planting and sales in the hope of bringing a thriving GM black market under regulation.

"It is preferable to watch the evolution of the (GM soy) market for a year or two," Batista said. "Then we could begin to plant (GM). To plant GM and then decide would be more difficult."

Producers in Rio Grande do Sul, Brazil's No. 3 soy state, have planted GM soy illegally for several years, and the biotech seeds now account for about 80 percent of the crop.

Parana is also in talks to create a contiguous GM-free zone with its northern neighbor state Santa Catarina, which already has a law on the books banning GM soy.

"The world tends to pay more for GM-free foods," said the Agriculture Secretary of Santa Catarina, Moacir Sopelsa.


"We want the producer to have the option," said Nelson Costa, superintendent of Parana's Organization of Cooperatives (Ocepar). "If the market wants a non-GM product, it should pay a premium for it. If it doesn't pay, it will become like Argentina," where GM soy accounts for 90 percent of output.

Cooperatives in Parana currently maintain a program that allows producers to certify their soy as GM-free. But the prices they receive are only about 2 percent to 3 percent higher than for the conventional product, a premium that Costa says "poorly compensates for the costs of segregation and certification."

A recent study by Ocepar showed that even if producers were paying full royalties for GM soy and not buying the seed on the black market as they are now, the cost of soy production would fall in Brazil with the adoption of the GM technology.

Monsanto Co. , whose Roundup Ready Soybeans make up most of the black-market GM soy in Brazil, has not said what royalty it would charge local producers for its seeds.

But using the difference of 31.6 percent estimated between conventional and GM seed prices in the United States, the costs of output from conventional seeds would still exceed GM production by 10 percent, according to Ocepar.

GM soy producers have to spray fields fewer times with less herbicide than conventional producers, thus reducing operating costs significantly. Herbicide costs, one of the main production inputs, would fall 54 percent, Ocepar estimated.