The WSJ reports that the U.S. Department of Justice has demanded documents on Monsanto's Roundup Ready soybean business practices. A gene that Monsanto engineered allows Roundup Ready soybeans survive spraying with Roundup, a weed-killer. Roundup Ready accounts for 90 percent of domestic soybean crops.
The probe may relate to Monsanto's efforts to induce, persuade, cajole, force, or compel farmers to switch to another Roundup Ready variety that has longer patent protection than the current one. The patent on the latter expires in 2014.
A Monsanto press release says:
Monsanto Announces Continued Cooperation With the U.S. Department of Justice
ST. LOUIS, Jan. 14, 2010 /PRNewswire-FirstCall/ — Monsanto Company (NYSE: MON) announced that the U.S. Department of Justice has issued a civil investigative demand (CID) requesting information on its soybean traits business, primarily seeking a confirmation that, as Monsanto has previously indicated, farmers and seed companies will continue to have access to the first-generation Roundup Ready® trait following patent expiry in 2014.
"Monsanto continues to cooperate with the U.S. Department of Justice inquiries, just as we have over the last several months," said Scott Partridge, Monsanto's Chief Deputy General Counsel. "We respect the thorough regulatory process. We believe our business practices are fair, pro-competitive and in compliance with the law."
Monsanto has voluntarily cooperated with regulators to address their questions about its business and the broader agriculture industry. This request represents a continuation of that process. During this time, the company has provided extensive access to millions of pages of documents to ensure that regulators' questions are addressed. Monsanto noted that it will continue to provide information that is requested of its business.
"Given the pace and scale of agriculture biotechnology adoption as well as the expiration of the Roundup Ready soybean patents in 2014, we understand why regulators would want to know more about competition in modern agriculture and how products are commercialized and used," said Partridge. "We believe that an objective review will show our business and our industry to be competitive."
In December 2009, Monsanto took the initiative to clear up growing confusion in the soybean industry by confirming that Roundup Ready soybeans would remain available after patent expiry. The company remains committed to working with the soybean industry, public and private parties alike on this matter, so that the markets served by soybean farmers are not disrupted. Information about this transition is available online here.
The U.S. Department of Justice and U.S. Department of Agriculture are conducting an ongoing review of the entire agriculture industry, including the seed and trait industry. Monsanto recently submitted comments to the Departments as part of the public comment period which ended on Dec. 31, 2009. The company's comments as well as its response to third party submissions are available on Monsanto's homepage under the "A look at the seed industry" section.