Litigants line up to sue Monsanto
Herbicides Roundup and dicamba in the firing line
● Some Bayer AG investors were surprised to learn about the thousands of farmers lining up before US courts to argue that Roundup — the blockbuster weedkiller the German company recently acquired when it bought Monsanto Co — had given them cancer. But Roundup is hardly the only chemical in Monsanto’s portfolio carrying legal risks.
There are also lawsuits aplenty for dicamba, its next bestselling herbicide, which US farmers are spraying on about 20.2-million ha of soya bean and cotton crops this summer to combat weeds that have become resistant to Roundup.
Dicamba tends to vapourise after being sprayed and drift onto neighbouring fields, harming crops and other plants that aren’t genetically modified to withstand its effects. More than 1-million soya bean acres are claimed to have been damaged this year as of mid-July, and last summer, that number was more than 3-million.
Monsanto and other crop-chemicals companies have come up with formulations that they say will stay put when applied correctly. Monsanto pins the crop damage on incorrect application by farmers, and says that’s going away with increased training.
The company has received only a third of the complaints about off-target movement than it did last year, while hectares have more than doubled, said Scott Partridge, vice-president at Monsanto. Moreover, 12 states last year saw record soya bean yields.
“Growers are exercising a choice, and they have chosen to purchase and plant and harvest the highest-yielding, most profitable soya beans that are out there,” Partridge said. The technology “has a historic rate of adoption, and it’s one that’s desperately needed by soya bean and cotton growers” to boost productivity.
But some agricultural researchers and farmers say there’s still a problem, and dicamba continues to be a magnet for classaction lawsuits.
These could cover thousands of plaintiffs, according to Tiffany Dowell Lashmet, an agricultural law specialist at Texas A&M University.
Currently, 35 of 37 cases with 181 named plaintiffs have been consolidated into a federal class action, a number that’s far from being in the thousands, Monsanto said.
Meanwhile, rival seed companies are piling on pressure: Beck’s Hybrids, the fourthlargest US soya bean-seed retailer, wrote to the US Environmental Protection Agency (EPA) in July asking it to place new restrictions on the application of dicamba. Monsanto said its competitor could be looking to sell similar technology.
One lawsuit seeks to get dicamba taken off the market altogether. Oral arguments are scheduled for August 29 in the US court of appeals for the ninth circuit in Seattle over whether the law was broken in granting the herbicide a two-year registration, which expires in November.
Farmers using dicamba were supposed to avoid drift damage by following instructions written on an “unprecedented” and “Byzantine” 16,000-word label, said George Kimbrell, the legal director at the Centre for Food Safety, one of four nonprofit groups bringing the suit. The EPA may also have violated the Endangered Species Act, Kimbrell said.
“After more than seven years of exhaustive scientific review and evaluation, EPA approved XtendiMax with VaporGrip Technology for in-crop use,” Bayer said in a statement. “Dicamba-based herbicides have a 50-year history of safe use, when applied according to label directions, and we are confident the government’s exhaustive assessment will prevail.”
Partridge said that such lawsuits are a “recurrent theme” whenever the company brings new technology to the marketplace.
The EPA said it would not comment on pending litigation.
“Our goal is to make a decision in time for growers to make informed seed-purchase decisions for the next planting season,” the agency said in an e-mail.
Bayer lost more than à13bn (R215bn) in market value last week as news of Rounduprelated lawsuits mount. On August 10, a San Francisco jury awarded $289m (R4.1bn) to a groundskeeper who said Roundup, a fourdecade-old herbicide based on a chemical called glyphosate, gave him cancer.
Monsanto points to more than 800 studies indicating that glyphosate is not carcinogenic. Its parent company plans to appeal the verdict.
Bayer also recently failed to block the state of California from listing Roundup as a known carcinogen.
Partridge said the company’s dicambaresistant soya beans had much higher yields than a major competitor.
Dicamba is being sold to farmers for use in conjunction with the company’s Xtend genetically modified soya beans and cotton. For Bayer — which completed its $66bn acquisition of Monsanto in June and hasn’t yet integrated the companies — the loss of Xtend would mean a hit of as much as $400m to future earnings before interest, taxes, depreciation and amortisation, Sanford C Bernstein & Co analyst Jonas Oxgaard said in an August research note.
Oxgaard also said in nearly all states that only followed the EPA’s regulations this year, drift complaints were higher.
The EPA has to “balance farmers’ needs to manage glyphosate-resistant weeds with other farmers’ need to not have their crops destroyed”, he said.
“The likeliest outcome this year is for the EPA to give a one-year temporary registration, and impose even more stringent requirements,” Oxgaard said.
“The likeliest outcome after that is for the registration to be revoked.”
Chris Perrella, an analyst at Bloomberg Intelligence, said that if that happens, it would “derail Monsanto’s plans to roll out dicamba-tolerant seeds throughout the world — the next step in herbicide tolerance — and destroy a lot of value for new products Monsanto is launching over the next couple of years.”
Growers have chosen to plant and harvest the highest-yielding, most profitable soya beans
Scott Partridge
Vice-president at Monsanto