Illegal soy seeds enrich Brazil farms

JULIO DE CASTILHOS, Brazil — They are counting on another bumper soy crop in southern Brazil, where a new breed of rebel farmers works the fields in air-conditioned tractors and runs to town in big new pickups.

The seeds being sown — and making the farmers rich — are genetically modified to provide healthier yields at lower costs than conventional soy. They originally were smuggled in during a long-standing legal ban on so-called transgenic seed.

While Brazil’s ban didn’t stop many farmers, it made it impossible for Monsanto Co. to collect seed revenues or crop royalties, as it does from farmers in the United States and elsewhere.

American farmers are livid, but growers in towns such as Julio de Castilhos are beaming.

“Every year it’s just getting better,” said Rodrigo Martins. Now 24, he started farming soy at age 17 and gave up plans to go to law school because he was making so much money. “With [genetically modified] soy, you produce lots more profits in six months instead of a year, and it’s not as much work.”

In response to soaring world demand for soy used in products ranging from animal feed to processed food, Brazil’s production has skyrocketed. It is expected to surpass the United States next year as the world’s top soy exporter.

An estimated 10 percent to 20 percent of Brazil’s soy crop is grown with seeds smuggled in from neighboring countries and replicated locally. In Rio Grande do Sul, Brazil’s third largest soy-growing state, transgenic seeds are used to produce up to 90 percent of the annual harvest, analysts say.

U.S. Sen. Charles E. Grassley, Iowa Republican, accuses the Brazilian government, which rarely enforced the ban on transgenic soy, of letting the situation get out of control.

Brazil’s soy farmers are getting what amounts to an indirect subsidy, he contends, and are robbing Monsanto of money to develop new seeds that would help American farmers become more competitive.

“It’s unfair competition,” Mr. Grassley said.

Brazilian farmers acknowledge using illegal seed, but say their actions are forcing the government to legalize transgenic soy. Brazil permitted the planting of transgenic soy for the first time this season, and a bill is wending through Congress that would create the country’s first rules allowing biotechnology in agriculture.

Critics are worried about long-term environmental effects. Brazil’s ban was in line with that of most European countries, which do not permit genetically engineered crops.

Smuggled transgenic seeds were introduced in Julio de Castilhos by a Uruguayan trucker in 1996, and skeptical farmers were amazed at the results. Oli Amadeu Facco planted five acres with the seeds, and they produced 50 percent more than his land cultivated with conventional seeds.

“I couldn’t believe it, but it came out more green, just beautiful,” said Mr. Facco, a burly 35-year-old who also travels from farm to farm as an agriculture specialist for the local soy farmers cooperative.

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