Monsanto fined $2.5 million for mislabeled seed
Grower guide failed to disclose prohibited growing of biotech cotton seed
By MATEUSZ PERKOWSKI
The Monsanto Co. has agreed to pay the federal government a $2.5 million penalty for violating labeling regulations for genetically engineered cotton.
Two lines of cotton developed by the biotech company -- Bollgard and Bollgard II -- contain insect-repelling genetic material from a bacteria, Bacillus thuringiensis, or Bt.
Because the crops ward off pests, they're subject to the U.S. Environmental Protection Agency's pesticide labeling rules.
Monsanto had to disclose in a "grower guide" that farmers were prohibited from growing Bollgard and Bollgard II in 10 counties in the Texas Panhandle.
That information was omitted from labels between 2002 and 2006, resulting in mislabeled cotton varieties being sold on nearly 1,800 occasions, according to Monsanto's settlement agreement with EPA.
If a panel of administrative law judges approves the settlement, Monsanto must pay $2.5 million within 60 days or face further penalties of $5,000 per day, according to the agreement.
The EPA prohibited farmers from growing the transgenic varieties in the 10 counties due to concerns that a common pest -- Helicoverpa zea -- would develop resistance to the transgenic trait.
"This insect shuttles between corn and cotton during the growing season and can be exposed to Bt plant-incorporated protectants in both crops," said Dave Ryan, spokesman for EPA, in an e-mail.
The EPA agreed to loosen restrictions on transgenic corn in the Panhandle as long as the cotton varieties were no longer planted there, according to a statement from Monsanto.
"Due to an oversight, Monsanto's grower guide failed to include the required language," the statement said.
When Monsanto found out about the omission, the company reported the problem to EPA and "immediately implemented an extensive outreach program" to prevent farmers in the 10 counties from planting the two cotton lines, the statement said.
The ban on planting Bollguard II in the 10 counties was lifted by EPA in 2008 after studies indicated resistance to the Bt trait hadn't developed in the region, according to Monsanto.
In its 2009 fiscal year, Monsanto reported a profit of about $2 billion on total sales of more than $11 billion.