Bayer's modified soy seeds to approve: Argentina

Bayer has welcomed the expected approval but the company has not said if or when it plans to commercialize its "Liberty Link" seed and herbicide in Argentina.

The South American country a top provider of soybeans, meal and oil has for years embraced genetically modified technology in its drive to help meet world food demand and cash in on high grains prices.

"We have decided to approve a new genetically-modified soy product and we believe that with this we are contributing to the competitiveness of the sector," Agriculture Secretary Lorenzo Basso told Reuters in a telephone interview.

"We have to see if Bayer decides to put it in the market. That depends on the company," he added.

The product promises high yields in parts of the country where it is hard to grow Roundup Ready genetically modified soy, developed by US-based Monsanto and approved for use in Argentina in the 1990s.

Monsanto meanwhile is asking Argentine farmers to sign contracts promising to use its new Roundup Ready 2 Yield soy.

Argentina grows five times as much soy as it did 20 years ago, helping to fuel one of the fastest-growing economies in the Americas. Almost all the soy grown in the country is genetically modified.

Argentina is the world's top supplier of soyoil and soymeal as well as its No.3 provider of soybeans.

Lured by the promise of high returns fuelled by growing food demand, international investment funds have been pouring money into the farm sector in Brazil and Argentina, where land is still available to be developed for agriculture.

Argentina, with its ample water supplies and fertile Pampas, remains interesting to investors despite a long-running feud between President Cristina Fernandez and farm leaders who accuse her of trampling profits with interventionist policies such as wheat and corn export quotas.

Rural areas nonetheless supported Fernandez in the Aug. 14 primary. She is expected to win a second term in October.

Copyright Reuters, 2011