October 2014

October 2014

Sale of GMO Seed To Farmers Before Worldwide Import Approval Sparks Numerous Lawsuits

Syngenta lawyers have been busy. And the legal fallout from China’s rejection of Syngenta’s Agrisure Viptera, a genetically-modified (GM) corn product, does not look to end any time soon. At this point, the only sure prediction is that there will be no true winners in this battle.

Syngenta AG is a Swiss-based agribusiness company that owns several American agricultural technology companies, including Syngenta Seeds, Inc. The conflicts arise from corn seed Syngenta developed with the MIR162 insecticidal trait. Syngenta promoted MIR162 as the first trait stack-labeled for control of “true armyworm.” After U.S. regulators approved Agrisure Viptera in 2010, Syngenta began selling the GM seed for planting in the 2011 crop year.

Most U.S. trading partners—including Canada, Japan, Argentina, and the European Union—also approved the GM trait. China, however, did not grant import approval, despite receiving the initial application from Syngenta in March of 2010.

It was during this same period that the Chinese market for U.S. corn exploded. During the 2010-2011 trade year, China imported 979,000 metric tons of corn from the United States. This was comparable to the 950,000 metric tons Canada imported during the same year. One year later, however, China imported 5.2 million metric tons of corn from the U.S., as compared to Canada’s 870,000. Japan remained the largest importer with annual imports of 14.9 million metric tons of U.S. corn.

Read the full article here.

Iowa Bankruptcy Court Further Clarifies the Iowa Ag Supply Dealer’s Lien

The United States Bankruptcy Court for the Northern District of Iowa has issued another opinion clarifying the scope of the agricultural supply dealer’s lien under Iowa Code Chapter 570A. This time, the feed supplier prevailed.

The debtor, a farmer conducting a farrow-to-finish operation for swine production, filed for Chapter 12 bankruptcy protection in 2009.  After the bankruptcy petition was filed, the debtor’s hogs were sold pursuant to a court order and the proceeds were placed into a cash collateral account. Two creditors asserted competing liens in the proceeds. A feed supplier claimed a “super priority” agricultural supply dealer’s lien under Iowa Code § 570A.5(3). The debtor’s bank claimed a perfected Article 9 “blanket lien” in the proceeds. The $358,841.10 proceeds were insufficient to cover both claims.

The bank attacked the ag supply dealer’s lien on several fronts. In 2011, the Iowa Supreme Court answered a certified question in the case ruling that the feed supplier had super priority on increases in the hogs’ value from acquisition price to final sale. Oyens Feed & Supply Co. v. Primebank, 808 N.W.2d 186, 194 (Iowa 2011).  In the trial following the Iowa Supreme Court decision, the bank attempted to lower this amount. Because the debtor ran a farrow-to-finish operation, he did not purchase outside swine. He birthed and raised replacement gilts rather than purchasing them. The bank argued that the debtor’s “acquisition price” in the livestock he raised was the “cost to produce each hog—facility maintenance costs, electricity, vet bills, semen, wages, expenses for the gilt, etc.” The feed supplier argued that the acquisition price as intended by Iowa Code § 570A.5(3) was $0.

Read the full article here.



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