Cargill Inc. sued Syngenta Seeds Inc. on Friday in an unusual legal battle over genetically modified food that both companies support.
The fight comes after China refused to accept ships Cargill loaded that were filled with corn grown from genetically modified Syngenta seed.
Despite being one of the world’s most vocal and powerful backers of genetically modified seeds, Cargill accused Syngenta Seeds of shipping the corn without first ensuring that Chinese officials would allow it into their country. Both Cargill and Syngenta Seeds are based in Minnetonka.
“I want to be clear about this,” Dave Baudler, president of Cargill AgHorizons U.S., said in a statement released by the company. “Cargill is a supporter of innovation and the development of new GMO [genetically modified] seed products. But we take exception to Syngenta’s actions in launching the sale of new products … before obtaining import approval in key export markets for U.S. crops.”
Syngenta countered with a statement that called Cargill’s suit “without merit.”
The seed in question — called Agrisure Viptera trait (MIR162) — “was approved for cultivation in the USA in 2010,” the company said. “Syngenta commercialized the trait in full compliance with regulatory and legal requirements. Syngenta also obtained import approval from major corn-importing countries.”
China has declared genetically modified food safe, but in August the country’s Ministry of Agriculture refused to renew certificates that allowed Chinese research groups to grow genetically modified rice and corn. The country also refuses to import foods with genetic modifications not approved by the government.
Cargill says that since November 2013, China’s Ministry of Agriculture has refused more than 1.4 million metric tons of corn after it found traces of Viptera on corn-carrying ships. Cargill claimed $90 million in damages from the rejections.
A Cargill spokesman said the corn in question was diverted to other ports where it was accepted. But Cargill wants to send a message about Syngenta’s business practices, which Cargill says do not meet industry standards and are penalizing other corporations.
“Unlike other seed companies, Syngenta has not practiced responsible stewardship by broadly commercializing a new product before receiving approval from a key export market like China,” Mark Stonacek, president of Cargill’s grain and oilseed supply chain in North America, said in a statement announcing the lawsuit. “Syngenta also put the ability of U.S. agriculture to serve global markets at risk, costing both Cargill and the entire U.S. agricultural industry significant damages.”
A recent study by a national grain industry trade group estimated that uncertainty in the market had cost U.S. producers $2.9 billion.
Syngenta countered that it has been “fully transparent” in commercializing the new modification over the past four years.
Syngenta has been successful in marketing Viptera seed. The Cargill suit says the product has found its way “into all levels of the U.S. corn supply.” The ubiquity of the seed has effectively closed China as an export market for U.S. corn, Cargill charged.
The notion of contaminating a market by successfully commercializing a product poses a difficult economic dilemma, said University of Minnesota agricultural economist Bill Lazarus.
“I can certainly see how trace amounts [of genetically modified substances] could find their way into the corners of ships,” Lazarus said. “If it moves that easily, what do you do about it?”
Lazarus believes genetically modified food may be necessary to feed the world’s population. But with countries in Europe already restricting genetic modifications and China growing increasingly picky, Lazarus said the issues raised by Syngenta’s sales and Cargill’s suit may become more common.
On the other hand, Lazarus spent time in China this summer and proffered another explanation for the country’s current stance on U.S. corn.
These days, China has a large surplus of rice and corn, he said. “They’re probably looking for excuses to not import it now.”