Cargill Inc. filed suit Friday against Syngenta Seeds Inc. over a genetically engineered variety of corn that led China to largely shut down imports of U.S. grain. Cargill alleges in the lawsuit that it has lost more than $90 million because of the disruption.
Syngenta commercialized the insect-resistant variety, known as Agrisure Viptera, despite warnings that it could disrupt trade if it wasn’t first approved by China, according to the lawsuit filed in a Louisiana state court.
Even after “it became clear that Viptera faced significant regulatory challenges in China, Syngenta continued to aggressively promote and sell the product, wantonly disregarding the harm that its actions inflicted, and continue to inflict” on Cargill, the lawsuit alleges.
China has been rejecting U.S. corn shipments since November 2013 after discovering the Syngenta corn. The lawsuits seeks to recover the damages to Cargill’s business plus interest.
“Unlike other seed companies, Syngenta has not practiced responsible stewardship by broadly commercializing a new product before receiving approval from a key export market like China,” said Mark Stonacek, president of Cargill Grain and Oilseed Supply Chain North America.
In a statement responding to the lawsuit, Syngenta said that it had been “fully transparent” in commercializing the seed. “Syngenta believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies that can increase both their productivity and their profitability.”
Rick Tolman, CEO of the National Corn Growers Association, said in an interview this week that he expected China to remain a problem for the grain industry for some time because of internal politics. “As countries mature they tend to be more able to separate trade and politics. China is still in that stage where they are still linked,” Tolman said.
Earlier this week, 19 senators, led by Agriculture Chairwoman Debbie Stabenow , D-Mich., asked U.S. Trade Representative Michael Froman to demand that China restore trade in distiller’s grains that also has been disrupted by the block on corn imports. China has been the the top market for U.S. distiller’s grains, a byproduct of ethanol production. The business was valued at about $1.6 billion in 2013.