US farmers reach $110 million StarLink settlement
Date: 10-Feb-03
Country: USA
Author: K.T. Arasu
StarLink Logistics and Advanta USA agreed to pay $110 million plus interest to farmers whose crops were tainted with StarLink corn, or who suffered from a drop in corn prices due to the controversy over gene-spliced StarLink corn.
Melvyn Weiss of the law firm Milberg Weiss Bershad Hynes & Lerach LLP said the preliminary settlement was approved on Wednesday by Judge James Moran of the U.S. District Court for the Northern District of Illinois. It still needs final approval.
A source familiar with the case said a hearing date for final approval has been set for April 7. "It's basically to see if anyone objects to the settlement," he said, adding that non-StarLink farmers whose incomes were affected could file a claim for a portion of the settlement.
"This agreement represents an outstanding result in a difficult and hard-fought litigation," said Weiss, who represents the farmers. He declined to elaborate.
StarLink corn is not approved for human consumption for fear it could cause allergic reactions. Japan, the top U.S. corn importer, bans StarLink corn for animal feed as well.
StarLink corn - spliced with a gene that is deadly to the corn borer pest that causes millions of dollars' worth of damage to the U.S. corn crop - was planted in less than 10,000 acres when introduced in the United States in 1998.
StarLink plantings grew to 315,000 acres in 2000 but still constituted less than 1 percent of total U.S. corn seedings. Plantings of StarLink were halted in the 2001 season.
Traces of StarLink corn were detected in taco shells in September 2000, leading to a series of recalls of corn-based products from grocery shelves across the country.
StarLink corn was also discovered in food products in Japan, spurring a sharp decline in the country's purchase of American corn supplies. The move triggered steep falls in the prices of U.S. corn.
The plaintiffs in the StarLink case claimed they had suffered financially from a drop in corn prices due to StarLink's detection in food products and the subsequent fall in exports, especially to Japan.
Some had also claimed that their non-StarLink corn crops were tainted by the variety grown in neighboring fields.
A spokeswoman for StarLink Logistics confirmed the deal. "We are pleased to have reached this agreement, which puts much of the liability issues behind us."
A spokesman for Advanta USA, which marketed StarLink seeds to farmers, could not be reached for comment.
Japanese demand for U.S. corn has returned to near normal pace since 2000, although there was a fresh shudder in December 2002 when traces of StarLink corn were detected in a cargo of supplies shipped to Japan from the United States.
Data from the U.S. Agriculture Department showed that corn imports from Japan remained strong in January despite the detection of StarLink in about 1,200 tonnes in December.
