Farmers, Food Safety Group Sue Monsanto After Oregon Wheat Incident

June 7th, 2013

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Category: Food Safety, Grains

(The Wall Street Journal) – Two Pacific Northwest wheat farmers and a food-safety group have filed a purported class-action lawsuit against Monsanto Co. (MON) in the wake of the discovery of unapproved genetically modified wheat in an Oregon field.

The Center for Food Safety, a Washington, D.C. group that announced the lawsuit, said the discovery has put the food supply and export market at risk. The lawsuit follows a similar lawsuit filed by a Kansas wheat farmer, announced earlier in the week.

The U.S. Department of Agriculture announced on May 29 it was investigating the discovery of genetically modified wheat in the Oregon field. Monsanto had conducted field trials for several years on the wheat, engineered to survive application of the herbicide glyphosate, but suspended the research in 2005 amid concern from the U.S. wheat industry that the seed would hurt export business. The seed was never sold commercially.

Japan and South Korea have restricted U.S. wheat imports in the wake of the discovery as they await further testing. Monsanto is a major developer of genetically modified crops, which face intense opposition in many parts of the world.

“Monsanto has put our farmer’s wheat market at grave risk,” Andrew Kimbrell, executive director for the Center for Food Safety said in a statement. “They must be held accountable.”

A spokeswoman for the group said that so far two farmers were plaintiffs in the lawsuit, and that it hoped to add more.

Filing a lawsuit now is premature, Monsanto’s Chief Litigation Counsel Kyle McClain said in a statement. Both Monsanto and USDA Secretary Tom Vilsack have said the discovery appears to be an isolated instance. Mr. McClain said the unexplained finding in the Oregon field “is scant basis for a lawsuit.”

The finding has threatened to upend the wheat market, although so far the reaction from the Chicago Board of Trade’s wheat futures market has been muted. Front-month July wheat futures are down 0.7% since the discovery was announced.

Still, the stakes could be extremely high for Monsanto, the world’s biggest seed producer. In 2011, Bayer AG (BAYN.XE, BAYRY) agreed to a $750 million settlement with U.S. rice farmers who had sued the company after two of the German chemicals firm’s genetically modified traits contaminated their crops.

That contamination, dating to 2001, caused rice prices to plunge and hurt exports for years, according to industry officials. The size of the U.S. rice market is a fraction of the wheat market, some attorneys have noted.

Other lawsuits are possible if the wheat situation is not resolved. Adam Levitt, a Chicago attorney who was co-lead counsel for the plaintiffs in the Bayer case and in an earlier lawsuit related to genetically modified corn contamination, said his firm has been contacted by “dozens of farmers” and that it continues to investigate.

“We think that the other shoe has yet to drop,” he said, adding that if it does, it will file a lawsuit as well.

Owen Fletcher and Kristin Jones contributed to this article.

Write to Ian Berry at ian.berry@dowjones.com

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