Deadline looms in $750M genetically modified rice settlement

CHUCK BARTELS

AP Busi­ness Writer

LITTLE ROCK, Ark. — Rice grow­ers who lost sales after genet­i­cally mod­i­fied rice seed mis­tak­enly entered the U.S. mar­ket five years ago have until Mon­day to sign on to a $750 mil­lion set­tle­ment pro­posed by the com­pany blamed for the problem.

More than 10,000 farm­ers in Arkansas, Louisiana, Mis­sis­sippi, Mis­souri and Texas sued the Ger­man con­glom­er­ate Bayer Crop­Science after the mod­i­fied strain of long-grain rice got loose in 2006. The mis­take led to lost sales in major mar­kets, such as the Euro­pean Union, and left many grow­ers with huge losses.

Matthew Davis, a rice grower from Almyra, Ark., is among farm­ers hop­ing to set­tle. He recalled hear­ing the news that the crop was con­t­a­m­i­nated and then watch­ing prices plunge.

“Every­body was in shock … but you get used to bad news when you farm,” Davis said. “It sure messed us up in 2006.”

Bayer pro­posed the set­tle­ment but set a thresh­old of 85 per­cent of rice acreage involved. Bayer can opt out of the deal if not enough farm­ers sign up for the set­tle­ment, but the com­pany doesn’t have to.

“Bayer Crop­Science is hope­ful that the 85 per­cent of acreage thresh­old of grower par­tic­i­pa­tion will be met,” Bayer spokesman Greg Cof­fey said in a writ­ten statement.

Farm­ers filed the law­suits after a strain of genet­i­cally mod­i­fied rice was mis­tak­enly released from a Louisiana test plot and made its way into the stream of com­mer­cially mar­keted rice.

The pro­posed set­tle­ment applies to long-grain rice, often used in pilaf or mixed with beans. Farm­ers who grow medium-grain rice, often used in sushi, or short-grain rice, found in cereal, weren’t affected.

The long-grain rice vari­ety wasn’t approved for human con­sump­tion at the time, but no health prob­lems became asso­ci­ated with the rice and the trait has remained in the food supply.

It will take about a month for claims adjus­tors to review fil­ings by farm­ers to ensure they are valid. Once that process is com­plete, farm­ers will start receiv­ing checks, assum­ing enough chose to participate.

The set­tle­ment would pay $155,000 to a farmer who planted 500 acres of rice annu­ally from 2006 to 2010, a rate of $310 per acre. Farm­ers can col­lect more if they switched to crops that typ­i­cally offer lower prof­its, such as wheat or soybeans.

In Arkansas, which pro­duces half the nation’s rice, Davis said he knows some farm­ers who quit because they couldn’t endure the finan­cial toll.

After the mis­taken release, the U.S. Food and Drug Admin­is­tra­tion ruled that the genet­i­cally mod­i­fied rice is safe to eat, but that didn’t bring back the Euro­pean market.

“I don’t think we’re ever going to be made whole, but you get what you can,” said farmer Jonathan Hill­man of Stuttgart, Ark.

Hill­man said the effect was imme­di­ate when word came out in 2006 about the genet­i­cally mod­i­fied rice.

“We didn’t do any­thing wrong. Bayer lets this hap­pen and it affects us more than it does Bayer,” Hill­man said.

Bayer was accused of know­ing there was con­t­a­m­i­na­tion, but the com­pany has not admit­ted fault and stated when announc­ing the set­tle­ment that “Bayer Crop­Science believes it acted respon­si­bly in the han­dling of its biotech rice.”

The set­tle­ment is open to affected grow­ers even if they haven’t filed lawsuits.

Arkansas is first in rice pro­duc­tion, fol­lowed by Cal­i­for­nia and then Louisiana.

Attor­ney Don Down­ing of St. Louis rep­re­sents a num­ber of grow­ers in the set­tle­ment. He said he doesn’t expect a rush of farm­ers to sud­denly decide Mon­day that they want to sign up.

“The vast major­ity of farm­ers made that deci­sion a long time ago,” Down­ing said, though he added that there have been a few stragglers.

Sep­a­rately, Bayer and a group of farm­ers from Lonoke, Ark., are await­ing a rul­ing by the Arkansas Supreme Court on whether a $50 mil­lion ver­dict against Bayer will stand.

A jury awarded the farm­ers $5.9 mil­lion in actual dam­ages and $42 mil­lion in puni­tive dam­ages, an award Bayer argues is excessive.

Down­ing said he’s opti­mistic the 85 per­cent level will be met and doesn’t think the out­come of the Lonoke case is weigh­ing on their decisions.

“I’ve talked to hun­dreds of farm­ers … and not one indi­cated that was a fac­tor for them,” Down­ing said.

Attor­ney Richard Coff­man of Beau­mont, Texas, expressed a sim­i­lar sen­ti­ment and said farm­ers want to resolve the mat­ter by agree­ing to the set­tle­ment with Bayer.

“For my 600 farm­ers, we’re not watch­ing the Arkansas case. We’re fil­ing claims,” he said. “They decided it’s time to set­tle rather than risk what can hap­pen down at the courthouse.”

Lawyers have held meet­ings in cities across rice grow­ing areas, let­ting farm­ers know what their options are.

Bayer’s pro­posal is based on jury awards already made in law­suits that weren’t part of the settlement.

The Mon­day dead­line affects the major­ity of farm­ers who grow long-grain rice. Two cat­e­gories have later dead­lines: farm­ers who planted cer­tain vari­eties and farm­ers who feel they have greater dam­ages than aver­age and have to file greater documentation.

Posted by AP News on Nov 18 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.