Bayer settles U.S. rice contamination case

KANSAS CITY, Missouri (Reuters) - Germany’s Bayer AG has agreed to settle a lawsuit brought by a group of Texas rice growers over claims the company’s experimental biotech rice contaminated the U.S. supply four years ago and decimated exports.

Bayer said it had agreed to pay $290,000 to settle the case, involving eight plaintiffs from three farming operations.

The company still faces thousands of claims, and a lawyer for some rice farmers said the settlement marked a key victory as it was the first time Bayer had agreed out of court to pay rice farmers damages arising from the contamination.

“After all these years, Bayer appears to be starting to take responsibility,” plaintiffs’ attorney Adam Levitt said in a statement.

Bayer said it continued to participate in mediation talks with other plaintiffs in ongoing litigation.

“Bayer CropScience has always been willing to settle such biotech rice litigation cases on reasonable terms and is pleased to be able to do so in this instance,” said Bill Buckner, president and CEO of Bayer unit Bayer CropScience LP.

In February, a jury ordered Bayer to pay $1.5 million in damages to three farmers for losses due to contamination by Bayer’s genetically modified rice. The company was ordered to pay $2 million in a related case last December.

The chemical and drug maker has been struggling to defend itself against claims from farmers across the United States after genetically altered rice developed by a subsidiary for research showed up in the food supply chain in August 2006.

The rice variety had not been approved for commercial cultivation and its presence in the U.S. crop led Japan and the European Union to restrict U.S. rice from crossing their borders, triggered a plunge in rice prices.

The long-grain rice in question had a protein known as Liberty Link, which allows the crop to withstand applications of a certain weed killer.

More than 7,000 long-grain rice producers in Missouri, Arkansas, Louisiana, Mississippi and Texas claimed they suffered damage.

The United States is a small rice grower but has been one of the world’s largest exporters, sending half its crop to foreign buyers.

The U.S. Department of Agriculture and the Food and Drug Administration said there was no public health or environmental risk associated with the genetically engineered rice and the two agencies chose not to punish Bayer for the contamination.

Editing by Lisa Shumaker and Dale Hudson