Biotechnology

Biotechnology is changing the face of agriculture, with farmers adopting genetically modified seeds at unprecedented rates. The global area planted with these seeds increased more than fifteenfold between 1996 and 1998. The genetically modified seeds that are the most widely grown are herbicide--tolerant soybeans and insect-resistant corn--specifically, Roundup Ready soybeans and Bacillus thuringiensis (Bt) corn. Farmers in the United States and Argentina have been at the forefront of adopting this new seed technology. Although genetically modified seeds can be a powerful weapon in a farmer's arsenal of weed control and insect protection tools, these seeds have typically sold for a premium over conventional varieties. U.S. farmers have raised concerns about the pricing of genetically modified seeds. This report provides information on the (1) prices of Roundup Ready soybean seeds and Bt corn seeds in the United States and Argentina and (2) major reasons for any price differences between the two countries for these seeds.

GAO noted that: (1) in 1998, available data indicate that the ranges of commercial prices for popular varieties of Roundup Ready soybean seeds were higher in the United States than in Argentina; (2) however, for popular varieties of Bt corn seeds there were no clear differences in prices; (3) since GAO found price differences for Roundup Ready soybean seeds and not for Bt corn seeds, GAO focused its analysis of reasons for price differences on Roundup Ready soybean seeds; (4) GAO identified two primary reasons for price differences: (a) greater control over patented seed technology in the United States; and (b) extensive black market sales of soybean seeds in Argentina; (5) Roundup Ready soybean seeds are patented in the United States, they are not patented in Argentina; (6) among other things, patents give a company more control in setting prices and restricting a products use; (7) for example, farmers in the United States are required to pay technology fees for the use of Roundup Ready soybean seeds and are not allowed to replant the seeds; this is not the case in Argentina; (8) a strong black market for seeds in Argentina has also contributed to lower prices in that country; (9) an estimated 25 to 50 percent of the soybean seeds grown in Argentina are sold in violation of Argentina's seed law; and (10) the law was designed, among other things, to protect plant breeders intellectual property rights by requiring that all seeds be certified prior to sale.