When it comes to no-tilling Roundup Ready soybeans, your competitors in Argentina have a distinct advantage due to lower seed prices. The inability to enforce intellectual property rights has given that nation’s bean producers a comparative advantage.
After it became clear 4 years ago that Roundup Ready soybean seed was selling for less in Argentina than in the U.S., Congress directed the federal government’s General Accounting Office to analyze the South American cropping situation.
“This study clearly showed that soybean seed was cheaper in Argentina than in the U.S., while corn seed was priced the same,” says University of Illinois ag economist Peter Goldsmith. “This pricing phenomena reflects differences between corn and soybeans and a firm’s ability to protect its intellectual property.”
The real reason that Roundup Ready soybean seed is cheaper in Argentina is that no system exists to effectively protect the intellectual property rights that would allow seed companies to charge a noncompetitive price. As an example, 80 percent of Argentina’s soybean seed is saved by farmers or distributors who “brown-bag” seed and sell it in plain bags without any company logo.
Goldsmith says there are also larger trade disputes between North and South America in regard to intellectual property that affect your bean growing efficiencies. Multinational companies have little influence in these South American countries as they are dependent for sales on a network of distributors who may actually be brown-bagging their seed. In some instances, the sale of Roundup Ready seed may actually…