Farmers sue, say GMO hurt corn prices

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Farm Forum

China’s refusal to buy corn from the United States in 2013 because it may have contained genetically modified seed has spawned lawsuits by farmers and major grain companies against the Swiss company Syngenta, which developed the seed.

“It was a co-mingling of a non-approved GMO that hadn’t been approved by the Eastern Rim countries. It was introduced into the market, and when the first bag of corn was rejected by China, corn prices started to drop. They started turning around barges of several million metric tons of corn,” said Minneapolis attorney Dan Homolka, who is among a group of lawyers recruiting farmers as clients in lawsuits.

The modified seed, known as Viptera, was approved for planting in the United States in 2010 and Syngenta asked China to allow its import. Syngenta began selling the modified seed before China’s approval and China cut off imports from America in 2013.

“It was approved in the United States, but it hadn’t been approved in the market and (Syngenta) killed the market,” Homolka said. “We’re not anti-GMO corn lawyers. It’s just an economic condition that occurred.”

The seeds are genetically modified so that earworms and cutworms won’t eat the corn plant.

The lawsuits alleged the plants from the modified seed cross pollinates with other corn plants, effectively causing the potential for all corn seed to be “contaminated.”

The lawsuits claim China’s ban cut U.S. corn exports by 85 percent.

Attorneys in the case say farmers nationwide lost an estimated $6.3 billion as corn prices plunged from about $7.50 a bushel to around $3.50 a year later.

Bruce Peterson, a Northfield farmer and president of the Minnesota Corn Growers Association, isn’t convinced the GMO seed and China’s reaction had as much to do with corn prices falling as other market pressures.

“China made this announcement and the price did drop, but it was also a period we were growing bigger crops. So I think supply and demand had more to do with it. The higher-priced corn was bound to come down,” Peterson said.

And Peterson said, China is known for creating trade tensions in hopes of driving down prices of commodities it buys and boosting the price of its commodities. “China uses issues like this as a tool to better their trade.”

Homolka said attorneys across the country have been filing suits on behalf of farmers. “With 88 to 92 million acres of corn in the U.S., there are a lot of people affected,” he said. Court records show that nearly 150 cases have been filed in Minnesota, with a handful coming from the Mankato area.

Since the lawsuits were filed, China has approved the import of the modified seed for food and animal feed use. But attorneys say farmers already have been damaged and deserve compensation.

Two large grain exporters, Minnesota-based Cargill and Illinois-based Trans Coastal Supply Co., are also suing Syngenta.

The lawsuit is not a class-action case but rather a “mass tort” in which farmers file individual suits. But the cases are consolidated into a single civil action. Mass torts attempt to reduce the number of court cases by taking to court a small number of cases considered to be representative of the larger pool of plaintiffs.

In this case most of the cases are being consolidated in the federal court in Kansas with one judge overseeing it.

But Homolka’s group is fighting to keep the Minnesota cases consolidated in Minnesota. He argues that because Syngenta’s North American headquarters is based in Minnesota, his clients have a legal right to have their cases handled in Minnesota courts.

Homolka said that if farmers don’t file a suit, which costs them nothing, they will most likely not be included in any eventual settlement. He and his team have been holding town hall meetings around the state to tell farmers about the case.

“We talk to potential clients and they can ask us questions. They actually meet the attorneys who are going to represent them.”

There is some precedence in the GMO case. In 2011 Bayer AG agreed to a $750 million settlement resolving claims with about 11,000 U.S. farmers who said a strain of the company’s genetically modified rice tainted crops and ruined their export value.

Paul Minehart, head of corporate communications for Syngenta in North America, said in an emailed statement that the company has followed all regulatory and legal requirements regarding Viptera.

“Syngenta believes that the lawsuits are without merit and strongly upholds the right of growers to have access to approved new technologies that can increase both their productivity and their profitability,” he said.

“Viptera has demonstrated major benefits for growers, preventing significant yield and grain quality losses resulting from damage by a broad spectrum of lepidopteran pests.”