Agribusiness giant Syngenta is facing a wave of potentially costly lawsuits filed by disgruntled U.S. exporters and farmers who claim they racked up major losses because the company’s genetically modified Agrisure Viptera corn can’t be exported to China.
Switzerland-based Syngenta, one of the world’s largest purveyor of of seeds, contends the lawsuits are without merit. The company’s global headquarters for its biotechnology research efforts are in Research Triangle Park, and its insect-resistant Viptera corn was discovered here.
Food conglomerate Cargill filed the first such suit against Syngenta last month, contending it suffered more than $90 million in damages because its corn shipments have been rejected by Chinese authorities since November.
China hasn’t approved Syngenta’s Viptera corn and has rejected shipments upon detecting “even a trace amount” of it, according to Cargill’s lawsuit. Such “contamination” is inevitable, the lawsuit states, given the prevalence of corn grown from Viptera seed, cross-pollination of corn between farms and the commingling of corn from different farms when transported. “According to one study, the loss of the Chinese market for U.S. grown corn has already cost the U.S. grain industry up to $2.9 billion in damages,” the Cargill lawsuit states.
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Since Cargill filed its complaint, more than a dozen suits with similar claims, many of them seeking class action status, have been filed by farmers, said James Pizzirusso of Hausfeld, a Washington law firm that is coordinating lawsuits filed in several states. At least one other exporter, Trans Coastal Supply, also has sued Syngenta.
The lawsuits also contend that domestic corn prices have fallen because of the loss of the Chinese market, which previously was the No. 3 export market for U.S. corn. Syngenta promoted the sale of Viptera seed to farmers “to line its own pockets at the expense of farmers who it knew would be impacted by China’s rejection of this GMO (genetically modified) trait,” Pizzirusso said.
Syngenta generated $14.7 billion in worldwide sales last year, including $3.2 billion in seed sales. It also produces crop protection products such as herbicides and insecticides. Syngenta invested about $200 million to develop Viptera corn, according to one lawsuit.
Syngenta said it was limited in what it could say about pending litigation, but issued a statement stating that the lawsuits have no merit and that the company “strongly upholds the right of growers to have access to approved new technologies that can increase both their productivity and their profitability.”
The company also noted that Viptera was approved for cultivation by U.S. regulators in 2010 and that it was commercialized “in full compliance with regulatory and legal requirements.”
“During this time,” the company said, “Agrisure Viptera has demonstrated major benefits for growers, preventing significant yield and grain quality losses resulting from damage by a broad spectrum of … pests.”
David Hickerson, an attorney with Foley & Lardner in Washington who specializes in international litigation, said the suits against Syngenta face a legal hurdle.
“Cargill can still sell its corn certainly anywhere in the U.S. and almost any other country, just not China,” said Hickerson, who is not involved in the lawsuits. “It’s not Syngenta’s duty to ensure that the corn can ... be sold to China.”
The lawsuits by farmers face a similar obstacle, he said.
“Obviously, in any given case, a judge might disagree with Syngenta and a jury might disagree with Syngenta,” he added. “But they’ll have strong arguments that they owed no duty to an individual farmer to make sure the worldwide market would stay available to them. They wouldn’t have that duty because they couldn’t control” what China does.