Bayer AG (FRA: BAYN) is paying up for a big mistake.
Bayer CropScience, a unit of Bayer AG, was accused by 11,000 farmers of contaminating their long-grain rice crop with Bayer’s unapproved, genetically modified rice.
Farmers from Arkansas, Louisiana, Mississippi, Missouri, and Texas lost $150 million in rice profits when it was announced that the genetically modified rice mixed with crops.
Exports declined to European countries due to rice regulations, and countries such as Russia even put a temporary ban on U.S. rice imports.
The farmers said Bayer acted negligently, allowing their LibertyLink rice to contaminate crops.
LibertyLink is a strain of rice developed by Bayer to be resistant to the Liberty herbicide.
Louisiana State University conducted testing on the strain, but it was never officially approved, and between 1998 and 2001, according to the Wall Street Journal, the genetically modified strain crossbred with natural rice strains.
These crops were planted between 2006 and 2010.
News of the contamination caused rice crop futures to decline 14%, according to Bloomberg.
Farmers are being compensated for each acre of contaminated rice crop they planted and for each year this occurred from 2006 to 2010, with maximum compensations at $310 per acre for all five years.
Bayer agreed to the settlement in order to end the litigations that have been ongoing since the first trial in 2009.
Bayer spokesman Greg Coffey said, “Although Bayer CropScience believes it acted responsibly in the handling of its biotech rice, the company considers it important to resolve the litigation so that it can move forward focused on its fundamental mission of providing innovative solutions to modern agriculture.”
Farmers maintain that Bayer was negligent, but regardless of which side is true it is clear that a mistake was made.
The settlement was announced on July 1.
That’s all for now,