* West Virginia investigating Monsanto for consumer fraud
* Part of wider probe by various states, Justice Dept.
* Involves Roundup Ready 2 soybeans
(Adds Monsanto comment)
By Carey Gillam
KANSAS CITY, June 25 West Virginia officials
have notified global seed giant Monsanto Co (MON.N) that they
are probing whether or not the company engaged in unfair or
deceptive practices in marketing its new genetically altered
The West Virginia Office of the Attorney General said in a
letter to Monsanto dated June 24 that it wants to meet with
officials from the St. Louis-based company to discuss
investigators' concerns that Monsanto has violated consumer
The letter states because of the "significant issues
involved" it is willing to hear from Monsanto before "moving
forward with compulsory process or actual litigation."
The Attorney General's office said in the letter that
investigators have reviewed several studies by agricultural
experts showing that Monsanto's advertised claims of higher
yields for its high-priced new soybean seed, called Roundup
Ready 2 Yield, have not been realized.
As well, U.S. Department of Agriculture statistics show no
increase in the state's average yield for the last harvest.
West Virginia officials said that farmers had relied on
advertising claims by Monsanto that its Roundup Ready 2 Yield
soybean seeds would yield 7-11 percent more than Monsanto's
original Roundup Ready soybeans.
"My office is concerned that West Virginia farmers are
paying much higher prices for soybeans with the Roundup Ready 2
trait when the yields do not live up to the claims and do not
justify the increased prices," the letter from West Virginia
Attorney General Darrell McGraw Jr. states.
Officials said if Monsanto's yield claims cannot be
substantiated, it is violating West Virginia consumer
protection laws and is subject to "injunctive relief,
restitution and disgorgement, as well as civil penalties."
"We believe the West Virginia's Attorney General letter is
based on a misunderstanding of our national marketing
materials," said Monsanto spokesman Lee Quarles. "Monsanto can
provide data demonstrating the performance of the Genuity
Roundup Ready 2 Yield."
Quarles said that more than 40,000 soybean yield records
collected between 2007 and 2009 showed the "rolling average
yield benefit" of its own Roundup Ready 2 seed variety was 3.6
bushels or more than 7 percent compared to competitors' seeds
also engineered to tolerate Monsanto's Roundup herbicide.
West Virginia is only one of several states that have been
looking into similar concerns over Monsanto's seed pricing
strategies and product marketing, with a particular focus on
the company's handling of the release last year of its new
Roundup Ready 2 Yield soybean seeds.
The U.S. Department of Justice has also been scrutinizing
Monsanto's moves in the U.S. seed industry amid allegations by
competitors and others of unfair pricing and antitrust
The company has repeatedly said its conduct is above-board
and its products are priced fairly for the value they deliver
to farmers. But the company last month said it was examining
and adjusting its seed pricing across the marketplace and
taking farmer complaints to heart.
"Every year, dozens of seed companies advance new varieties
that offer the potential of higher yield. These companies stake
their reputation on meeting grower expectations. This is no
different for Monsanto," Quarles said.
Roundup Ready soybeans, which are genetically altered to
tolerate the company's herbicide, have been wildly popular with
U.S. farmers and for years have been the soybean seeds of
choice, planted on the vast majority of U.S. soybean acreage.
But Monsanto's patent on the product is expiring in 2014
and Monsanto has been trying to convince customers to move to
the newer version, which have been priced, by some accounts,
more than 40 percent higher.
(Reporting by Carey Gillam and Peter Bohan; Editing by