Monsanto makes deal with Brazilian farmers to drop royalty fees

January 25, 2013
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Monsato's deal with Farmers

Food manufacturers that are attempting to build new factories and sites for their expansion in Brazil will have to work with the farmers in the area and cultivate a strong relationship to ensure their prosperity. The laws in Brazil surrounding tariffs and taxes on all transactions and trade taking place on an international level will affect the way a number of companies operate. However, with the help of a Brazilian lawyer, these regulations can be followed while benefiting both parties.

The world's largest seed company, Monsanto Corporation, will be waiving two years of its royalty fees for its Roundup Ready soybean seeds collection if Brazilian farmers stop the process of a patent dispute lawsuit, according to Bloomberg. Farmers would not have to pay the technology fee but would waive the right to gain back royalties that were previously paid. This new agreement would resolve the disputed allegation that the Roundup Ready soybeans patent expired in 2010.

“This agreement reflects the support of key grower associations and provides a mechanism to allow all parties to focus on the long-term solutions that will support the Brazilian agriculture industry and its growing demands,” Rodrigo Santos, president of Monsanto Brazil, said in a statement.

The company, however, will be excluding Brazil soybean sales from its profit forecast. Nonetheless, this agreement is beneficial to both parties and the Agriculture and Livestock Confederation of Brazil has supported the negotiations. Nasdaq reported that Monsanto shares have been rising and have reached $102.98 per share. However, farmers who choose not to participate and follow through with the patent dispute claims will have to pay technology royalty fees.

Foreign businesses attempting to develop negotiations with the farmers of Brazil - much like Monsanto - would be wise to do so through legal means. Contacting a Brazilian law firm may benefit companies looking to create contracts with Brazilian businesses.

 

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