March 28, 2024

Syngenta litigation might reform corn innovations

Meetings scheduled for June 8 in Newton

What exactly is the definition of a genetically modified fruit or vegetable? And what is fair business practice when it comes to marketing American-grown corn to other countries?

Those are heavy and complicated questions to many people — but that’s the level of profound debate entailed in planned litigation involving the American farm industry and the Swiss agri-business Syngenta over corn rejected by China.

Iowa farmers might have a lot at stake in the heated debate about whether Syngenta should have attained China’s formal approval before promoting selling a certain strain of corn seeds with the idea that Chinese approval was merely an upcoming formality.

China later rejected more than one million tons of American corn, lowering demand and worldwide prices, and legal action in the U.S. claims billions of dollars in losses. Iowa is the nation’s leading corn producer, both in quantity for grain production and in export value.

Several attorneys from Iowa and Nebraska are involved in the case, in terms of discussions with farmers, and at least two groups are holding informational meetings around the state. An effort involving one such firm, Gailey & Walsh, based in the Newell area, near Storm Lake, held dozens of “town hall” meetings around the state over the past few months.

The closest non-Des Moines meeting to Jasper County was held in Marshalltown.

“I lead these townhall-type meetings, and we got as few as 20 in some places, and as many as 70 in others,” said Derek Merman, an attorney helping with the Gailey-Walsh effort. “The farmers brought very thoughtful questions.”

Merman said farmers’ concerns weren’t centered entirely around the dollar amount in any lawsuit, or even solely on what actions must be taken in order to pursue a settlement. He said farmers’ concerns ranged widely — from the impact of lawsuits on innovation to ways litigation could change technology.

The attorney said his presentation covers the mistakes many attorneys believe Syngenta made in its process, which they allege cost the market, and depending on interpretations of impact, millions of farmers and others involved in the corn business.

There is not really one case or lawsuit to discuss or even a single type of legal infraction, Merman said. He said there are many questions for the U.S. court system to answer in the months and years ahead, from federal courts deciding on jurisdiction and the size of tort claims, to whether there are enough farmers involved for a class-action suit.

All this must happen before a suit even comes to fruition — whether a suit against Syngenta will even see a courtroom might be years from being known. International grain handlers Cargill, Inc. and Archer Daniels Midland have sued Syngenta, claiming the seedmaker misled the public and the industry about the timeline for Chinese approval.

Merman said a federal court in Kansas City is sorting out “multi-district litigation,” as cases will likely involved plaintiffs from more than one federal court district. However, it isn’t even obvious if there will be a more prominent federal or state case; Syngenta’s U.S. cooperate headquarters is in Hennepin County, Minn., so Minnesota farmers would need to go after the company in their state’s court system.

Merman said more meetings will be scheduled in other parts of Iowa, and he will publicize these meetings.

A group calling itself “Iowa Corn Lawsuit” is also holding informational meetings being held all across the state, include a pair in Jasper County on June 8. A Grinnell meeting will be held at 11 a.m. and a Newton meeting at 2 p.m. at the Pizza Ranch location in each city.

In 2009, Syngenta released a genetically engineered corn trait, MIR162, into the U.S. market. These varieties have been genetically engineered to protect corn against damage from insects, such as the corn borer and corn rootworm.

Its first generation of MIR162 corn was known as Agrisure Viptera (there are now dozens of Viptera varieties available from Syngenta; the MIR 162 strain is the one of concern regarding China). Viptera was marketed and introduced to U.S. farmers without import approval from China secured, Syngenta maintained that approval was imminent.

In April 2012, Syngenta CEO Michael T. Mack said approval would come “in a matter of a couple of days.” However, import approval was not ultimately granted until December 2014 — after making a significant impact on world grain prices.

Without approval of the new corn trait, Merman explains, China destroyed multiple shipments of genetically modified corn from the U.S. In November 2013, China, one of the world’s largest corn importers, began rejecting U.S. corn shipments because they contained a genetically modified variety that had not been approved.

The discovery of Syngenta AG’s Agrisure Viptera corn in the shipments dragged on global prices and, by the end of 2013, more than 545,000 tons of U.S. corn had been rejected by China. By April 2014, the rejected corn tonnage had reached 1,450,000.

That’s when the National Grain and Feed Association announced that estimates for the rejected shipments had cost U.S. agriculture at least $1 billion.

Merman said lawsuits are not necessarily the best way to regulate what he calls irresponsible cooperate behavior, but at times, it’s an essential tool. Syngenta’s profits went up 3.2 percent in 2014. The company is ranked No. 95 on Forbes’ list of most innovative companies.

“It’s kind of a cynical view of the world to think the only way to regulate some companies is through the wallet,” Merman said. “But, sometimes, all farmers can do is make bad behavior expensive.”