Farmers Say Syngenta Is Crippling Corn Sales

COLUMBIA, S.C. (CN) - A federal class action claims Syngenta Corp. recklessly brought genetically modified corn seed to market, and then cost farmers millions when its assurances that China would embrace the altered crops proved to be unfounded.

In their lawsuit, South Carolinians John and Beth Houser, who do business as Houser Farms in Bishopville, S.C., claim Syngenta crippled the corn market by introducing its genetically-modified seeds, and then, in an effort to build sales of its product, repeatedly lied to farmers, exporters, and the general public about the likelihood of China allowing genetically modified corn to be sold there.

China has historically been a substantial importer of corn from the United States. Today, it ranks as the third largest export market for American corn, and it has substantially increased corn imports in recent years, according the U.S. Department of Agriculture.

Syngenta develops and markets genetically-modified corn. Once it develops a new variety, it licenses the seeds to its subsidiaries and other manufacturers who then sell them to farmers across the country, the Housers say.

Syngenta entered MIR162, also known as Agrisure Viptera - a genetically engineered corn trait - into the U.S. market in 2009. A second generation of the seed line, known as Agrisure Duracade, was sold for planting in 2014. In both cases the corn was modified to protect it from insects, tolerate herbicides, and to allow it to be grown with less water than naturally-occurring corn.

Syngenta's genetically modified seeds are approved for use in the United States and several over countries, but not in China, where the company has a pending application for approval.

The Housers say they have always been careful to buy only non-modified seeds or those whose genetically-modified traits have long been approved by all major corn importing countries, including China.

They do so, they, explain because they sell their corn through a commodity-based system in which the crops from thousands of farms are commingled and consolidated, and then shipped to foreign markets through exporters.

According to the Housers, one bad apple - in this case kernel -- can indeed spoil the whole bunch, and that's exactly what happened in November 2013, when Chinese regulatory authorities detected traces of MIR 162 in United States corn shipments.

The regulators quarantined the corn and ultimately sent it back to the United States.

"As a result of China's prohibition on the importation of MIR 162 corn, even in trace, low-level amounts, and Syngenta's decision to continue marketing MIR 162 to a small minority of U.S. corn farmers - the vast majority of U.S. corn has been effectively excluded from what was previously the third-largest export market for U.S. Corn, causing farmers within the State to suffer significant damages as corn prices have dropped from the loss of the Chinese market," the Housers say.

They contend Syngenta misled farmers to believe that approval of MIR 162 in China was imminent, and that even if China failed to approve its modifications, the lack of approval would have no material impact on the corn market.

"Syngenta's decision to bring Viptera to the market crippled the 2013/14 corn export market to China and caused damage to plaintiffs and other Class members," the Housers say. "Syngenta knew, or should have known, that releasing Viptera would lead to the contamination of U.S. corn shipments and prevent U.S. corn from being sold to export markets such as China, which had not granted regulatory approval of MIR 162.

Then, "[e]ven in the wake of significant harm," they say. "Syngenta released its second generation MIR 162, Duracade, for 2014. This further exemplifies Syngenta's reckless disregard and deliberate ignorance of the consequences its conduct on the corn market. Syngenta's conduct caused Plaintiffs and the Class members to lose million of dollars in lost sales and income."

The Housers are seeking both compensatory damages, and to have Syngenta enjoined from selling its genetically-modified corn seed until such time as it is approved for sale in China on claims Syngenta violated the Lanham Act, public nuisance, trespass to chattels, negligence, tortuous interference with business relations, product liability.

They are represented by William Hopkins Jr. of Pawley's Island, S.C., and Roman Shaul, of Beasley, Allen, Crow, Methvin, Portis & Miles of Montgomery, Ala.

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