A yearslong battle between farmers and the Syngenta Corp. over whether the Swiss giant rushed to market a genetically modified corn seed, causing millions of tons of lost sales, will come to a head in state court this week.
Minnesota farmers take on Syngenta in court this week
September 9, 2017 at 2:14AM
The civil trial in Minneapolis pits about 22,000 Minnesota corn growers against Minnetonka-based Syngenta Seeds Inc., and its parent company. Similar complaints have been filed across the country, with a federal jury ruling in favor of the farmers in one of the cases.
"The essential question before the court is whether or not Syngenta was negligent in the manner and scope and timing in which it commercialized this new product," said Lewis Remele, Minneapolis attorney and co-lead counsel for the Minnesota farmers.
In this case, the growers did not buy or plant the new corn seed, called Agrisure Viptera. But the producers lost about $450 million in income, Remele said, because Chinese officials halted nearly all U.S. corn shipments to the country for three years, causing the overall price of corn to plummet.
Syngenta officials have said that they acted responsibly in commercializing the new corn variety, that they received approval from U.S. regulators and major export markets other than China, and that lower corn prices in recent years were caused mainly by bumper crops and other market factors, not by Syngenta's conduct.
"Syngenta believes that American farmers should have access to the latest U.S.-approved technology to help them increase their productivity and yield," said company spokesman Paul Minehart in a statement. "Syngenta commercialized Agrisure Viptera in full compliance with U.S. regulatory and legal requirements, including USDA EPA, and FDA regulations."
Syngenta launched Viptera corn in 2010 for planting in 2011, after its approval by U.S. agencies. The seed was genetically modified to kill corn earworm, cutworm and other insects, and gained market share steadily during the next three years.
However, Chinese regulators had not yet approved the new seed for import into their country, and began turning away U.S. shipments that had any traces of Viptera corn beginning in late 2013. Even though Viptera was planted by a minority of U.S. farmers, it was mixed with other corn in grain elevators, rail hopper cars, barges and oceangoing ships, effectively contaminating them with a product that China would not accept. The Chinese rejected millions of tons of U.S. corn for about three years, including any tainted by Viptera or another Syngenta corn seed — Agrisure Duracade — approved by U.S. regulators in 2013 and first planted in 2014.
China eventually approved Viptera for import in 2014 and Duracade in 2017, and has since begun increasing its purchases of U.S. corn.
Syngenta officials have said that China imported very little corn when Viptera was launched, and they expected Chinese import approval within a year or two. Other seed technology companies such as Dow and Monsanto had also commercialized new U.S.-approved seeds for American farmers, they said, without waiting for Chinese import approval.
Furthermore, the company contends that requiring any U.S. technology company to get Chinese approval before it markets a new product sets a bad precedent, and essentially gives China veto power over how seed companies conduct their business.
But Remele said Syngenta should have known that it was gambling when it began selling Viptera to U.S. farmers.
"China has a zero-risk policy, so if you ship a product to China that hasn't been approved by its regulatory agencies, you run the risk of having that product rejected and creating an international trade disruption," he said.
Major trading groups warned Syngenta about that possibility early on, he said, but the company went ahead and launched Viptera anyway. Remele also claims Syngenta misled customers into thinking that China would approve the product much sooner than was likely.
The Minnesota lawsuit is the second major case against Syngenta to come to trial this year, and one of several that are proceeding across the country. In June, a federal jury in Kansas ordered Syngenta to pay nearly $218 million to more than 7,300 Kansas farmers in a similar lawsuit. The company said it intends to appeal the verdict.
Also in June, an Ohio judge dismissed a case filed by an ethanol company. The decision concluded that interpreting the law to make Syngenta liable for the actions of a foreign government, in this case China, inhibits advances in U.S. technology and has a "chilling effect on those parties investing time and resources into their creation."
Another 70,000 Minnesota farmers have filed individual lawsuits against Syngenta that have been combined into a separate case to be heard in the future. Thousands of other corn producers, elevator owners and grain traders in several states also are seeking damages from the company in cases administered by federal courts in Kansas and Illinois. Attorneys in the lawsuits have estimated that damages to farmers nationally totaled more than $5 billion.
Ironically, the lawsuits spurred by the Chinese rejection of shipments come at a time when China National Chemical Corp., a state-owned company, is finalizing a $43 billion acquisition of Syngenta.
Grain exporter Cargill had some of its corn shipments rejected by China because of Viptera and Duracade, and has also sued Syngenta. That lawsuit is pending in state court in Louisiana, with a trial scheduled in 2018.
Tom Meersman • 612-673-7388
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