This blog reports events and interesting tidbits from Rensselaer, Indiana and the surrounding area.

Thursday, March 19, 2015

The Syngenta meeting

I saw an ad in the Rensselaer Republican last week for a Syngenta Corn Lawsuit Town Hall Meeting to be held at the Carnegie Center. I was intrigued and decided to attend.

There were only seven or eight other people there, all farmers. (A post separated me from most of the other people so I could not see some of them.) There were two lawyers at the meeting, one from Greenwood, IN who mostly does estate planning and the main speaker, a lawyer from Texas who dealt with farm litigation. He, however, was not the main lawyer in the case, but rather the team's contact person with farmers.

Syngenta is a large Swiss agribusiness corporation that formed in 2000 from the merger of Novartis and Zeneca. You may have never heard of the company, but you undoubtedly have heard of ancestor companies or branches, names like Ciba-Geigy, Northrup King, Golden Harvest, and Garst. Early this century Syngenta spent about $200 million to develop a genetically modified corn that killed corn pests, including corn root worm. It won a patent for this corn in 2006 and that patent runs out in 2026. Because the corn is genetically modified, it had to be approved for use, and was in the U.S., Japan, Canada, and other nations. Sygenta began selling the seed in 2011 or 2012 before some countries, including China, had approved it. In November of 2013, China rejected a shipment of U.S. corn because it contained traces of the trait of Sygenta's corn. As a result, the Chinese market was effectively closed to U.S. corn and this seems to have caused a drop in U.S. corn prices. China finally approved the Syngenta's corn for use in China in December 2014, but rather than make large purchases from the U.S., decided to import corn from the Ukraine.

Why are there lawsuits pending? The issue is not whether the product was defective or unsafe. The lawyer giving the presentation said it was good corn and would make the company a lot of money in the next decade. Rather the argument was that Syngenta had erred by releasing the corn before Chinese approval, and in doing so, was responsible for the harm caused farmers when China effectively closed their market to U.S. corn. They have an expert witness who estimates the closure of the Chinese market resulted in a drop of between 11 cents and 50 cents per bushel. The disruption also affected the market for dried distillers grain (DDG). The presenter also argued that there may be other damages as farmers adjusted to the lower costs of corn by growing other crops.

The presenters were trying to find farmers to sign up for suits. This is not a class action suit, which they rightly condemned as not in the farmers interests. (Class action suits are a scam in which lawyers have no interests in the plaintiffs and are willing to sell them out for a settlement. If you want a critical view of class actions suits and trial lawyers in general, read Smoke-Filled Rooms: A Postmortem on the Tobacco Deal (Studies in Law and Economics). The lawyer teams represented at the meeting will file each suit individually and then plan to have a sample of about ten cases go to trial. They hope the results of those trials will bring Syngenta to the negotiating table and where the rest of the cases will be settled. Because the case is not about the quality of the corn in question but about a disruption to the corn market, there is no need for a farmer to have grown Syngenta's corn to file a suit. The lawyer team was trying to sign up farmers with a contract that would give the lawyers 40% of any monies recovered but that would have the lawyers bear all the expenses of the case.

There were two reservations in the questions after the presentation. One was that farmers do not care to be a party attacking GMO crops and thereby contributing to the anti-science hysteria that surrounds GMO products. The other was that China may have wanted to disrupt the U.S. market and used the Syngenta corn as an excuse. The lawyers response was that it did not matter what China's intention was, the fact that Syngenta seed gave them excuse was enough to find Sygenta at fault.

For more about the issue, see here, here, here and Google for even more.

1 comment:

Anonymous said...

Sounds pretty flimsy to me.

- Somebody who knows no details