Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release -- January 23, 2001.
Contact Bob Brammer, 515-281-6699

Miller: Aventis Signs Formal Agreement to Mitigate
Losses from StarLink Corn

Binding contract details measures to compensate growers and elevators.

Iowa Attorney General Tom Miller said Tuesday that Aventis CropScience -- the maker of StarLink genetically modified corn that has entered the grain and food chains -- has signed a binding contractual agreement with seventeen State Attorneys General acting on behalf of growers and grain elevators who may suffer losses as a result of StarLink corn.

"I am very pleased we reached this formal agreement," Miller said. "Aventis has affirmed the assurances and claim procedures it posted at the company web site recently for growers and elevators, and the company specifically assured the States that it has access to assets necessary to satisfy its obligations under the agreement." The Aventis web site is www.StarLinkCorn.com.

"Now we have an agreement that can be enforced by the States," Miller said. "Aventis expressly agreed that it is obligated to compensate growers and elevators for loss in value resulting from StarLink corn, buffer corn and commingled corn. That means the States have clear standing to go to court if Aventis fails to live up to its obligations," he said.

The detailed documents attached to the agreement include terms and claim procedures for StarLink growers and buffer growers, for growers with losses related to non-StarLink corn containing StarLink Cry9C protein or DNA, and for elevators with losses related to StarLink corn.

Among the main terms are that Aventis will pay 25 cents per bushel to StarLink growers and buffer growers to control corn grown from StarLink hybrids and corn grown within 660 feet of corn grown with StarLink hybrids and move such corn to approved sites and uses through Aventis's "StarLink Enhanced Stewardship" program, or SES. Growers and elevators also are eligible for Aventis payments for documented StarLink costs or losses such as transportation, storage, testing, demurrage (extra costs resulting from handling StarLink), and loss of value. February 15, 2001, is the deadline for farmers to opt to participate in the SES program, and the grain must be marketed or fed by Sept. 15. Miller encouraged farmers and elevators to see details at Aventis's web site or in materials provided by the company.

The "Cry9C Growers" are those whose corn tests positive for Cry9C protein or DNA even though they did not grow corn from StarLink hybrids and did not grow corn within 660 feet of corn grown from StarLink hybrids. On January 12 Aventis posted terms and claim procedures for Cry9C Growers at its web site, www.StarLinkCorn.com. Cry9C corn also is eligible for payments of 25 cents per bushel if handled through Aventis's SES program, and payments for other costs or losses also are eligible if documented.

Non-StarLink corn commingled with StarLink, buffer or Cry9C corn also is eligible for 5-cent per bushel payment if fed to livestock, 10 cents if marketed to approved locations. Other documented costs or losses also are eligible for payment.

"Aventis and we have made great progress, but there's a long way to go in this situation, especially in the crucial time this spring when grain really starts moving through the system," Miller said. "We also agreed with Aventis to continue negotiations on more details of implementing the agreement, and our discussions will continue as other StarLink corn issues arise."

Miller and the Farm Division of his office have led states in negotiating with Aventis since the StarLink situation emerged in October, pressing the company to provide effective terms and claims procedures for farmers and elevators to recoup losses that may result because of StarLink. Miller has said it was "irresponsible" for Aventis to market the StarLink seed corn with unrealistic restrictions - including that there must be at least 660-foot "buffer strips" between StarLink and other planted corn, and that StarLink grain had to be kept segregated from other corn. He also has said his office believes most Iowa growers were not aware of the restrictions in any event.

But Miller also has complimented Aventis for mobilizing to get the corn out of the grain chain and to set up procedures and terms to pay producers and elevators whose grain may lose value because of StarLink corn. "It is my view that Aventis is working very hard to correct the situation and make it right for farmers and elevators," he said.

Miller said the States did not release any potential claims or causes of action as a result of the agreement, in case other issues arise that are not covered by the agreement. He also said the agreement does not affect any claims that have been made or could be made by growers or elevators who choose to proceed with legal action or claims.

The agreement will be in force for four years. It was signed late Monday by the States and Aventis CropScience USA LP, based in Research Triangle Park, NC.

States that signed the agreement are Iowa, Alabama, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Minnesota, Mississippi, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, and Wisconsin.

The States encompass over 90 percent of the acreage planted to StarLink corn last year.

Aventis has said the goal of its "StarLink Enhanced Stewardship" and StarLink Logistics plans is to completely segregate StarLink corn from other grain and to move StarLink corn and commingled corn to approved sites and approved uses such as animal feed and certain industrial uses.

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AGREEMENT CONCERNING STARLINK CORN between AVENTIS CROPSCIENCE USA LP and STATE ATTORNEYS GENERAL

1. PARTIES TO AGREEMENT. The Parties to this agreements are the attorneys general of the states of Iowa, Alabama, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Minnesota, Mississippi, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, and Wisconsin (hereinafter "the States") and Aventis CropScience USA LP (hereinafter "Aventis").

2. PURPOSE OF AGREEMENT. The States, on behalf of their respective states and on behalf of growers and grain elevators located in their respective states, and Aventis hereby enter into this binding contractual Agreement and hereby agree to the following measures in an effort to mitigate the economic losses suffered by growers and grain elevators located in their states resulting from Aventis' decision to license Cry9C technology in the United States.

3. CONSIDERATION. The States and Aventis hereby expressly agree that adequate consideration has been offered and received by the Parties to this Agreement.

4. MITIGATION MEASURES. The mitigation measures covered by this Agreement are described in this section.

a. The following documents, which are attached as exhibits, are incorporated in this Agreement by this reference [EDITORS'S NOTE: find these exhibits at Aventis web site: www.StarLinkCorn.com, or they will be provided by Aventis upon request.]

(1) "Aventis CropScience - StarLink Growers and Buffer Grower Claims Procedure For Losses Related to StarLink Corn." See Exhibit A.

(2) "Aventis CropScience - Claims Procedure For Growers With Losses Related to Non-StarLink Corn Containing Cry9C." See Exhibit B.

(3) "Aventis CropScience - Elevators Claims Procedure for Losses Related to StarLink Corn." See Exhibit C.

b. Aventis agrees to amend the elevator claims payment procedure contained in Exhibit C to conform with the following:

(1) Payment. If an elevator presents a fully documented claim to Aventis under the claims payment procedure outlined in Exhibit C, then Aventis shall make payment within thirty (30) days of receipt of the claim. Any payment made after thirty (30) days shall be subject to a late payment fee of 1.5% per month compounded on a daily basis.

(2) Verification of Inventory. If Aventis chooses to verify the quantity of inventory held by an elevator and/or the StarLink status (i.e. presence of Cry9C protein or Cry9C DNA) of such inventory, then Aventis shall -

(a) use measurement standards approved by the USDA,

(b) use testing standards and sampling protocols approved the the USDA,

(c) pay all costs, including loss of inventory value, associated with such verification, and

(d) if (based on the results of Aventis' sampling and testing) Aventis asserts that a given lot of corn does not contain StarLink (Cry9C protein or Cry9C DNA), then Aventis shall be responsible for any economic loss sustained by the elevator attributable to a subsequent detection of StarLink (Cry9C protein or Cry9C DNA) in that lot of corn.

(3) Excess Transportation. The term "excess transportation" shall mean incremental transportation costs incurred by an elevator as a result of the detection of StarLink (Cry9C protein or Cry9C DNA) in a lot of corn or as a result of the inability of an elevator to certify to a buyer that a lot of corn does not contain StarLink (Cry9C protein or Cry9C DNA). Excess transportation incurred by an elevator will be paid by Aventis at the higher of the actual costs incurred by the elevator or a rate agreed upon by Aventis and the elevator.

c. Aventis' obligations set out in Exhibits A, B, and C and in subsection (b) are obligations pursuant to this Agreement and are enforceable by the States. Aventis' obligations pursuant to Exhibits A, B, and C and subsection (b) include an express obligation to compensate the following entities for loss in value (net any logistics fees received) on StarLink, buffer, and commingled corn:

(1) StarLink Growers and Buffer Growers;

(2) Growers of non-StarLink corn containing Cry9C Protein or Cry9C DNA; and

(3) Grain Elevators.

5. AVENTIS TO MAIL COPIES OF EXHIBITS TO GROWERS AND ELEVATORS AND MAKE COPIES OF AGREEMENT AVAILABLE. Aventis shall mail a copy of the relevant exhibit to every grower and elevator that Aventis has identified as having StarLink, buffer or commingled corn. In addition, Aventis shall mail a copy of the relevant exhibit to any new grower or elevator that Aventis identifies as having StarLink, buffer or commingled corn within three business days of Aventis' receipt of said identification. With respect to elevators, Aventis shall send Exhibit C as amended in accordance with section 4(b). Aventis shall post a copy of this Agreement on its website (www.starlinkcorn.com) and shall make copies of the Agreement available to grower and elevators upon request.

6. NO RELEASE OF CLAIMS BY STATES. The States are not releasing any public or private claims or causes of action as a result of entering into this Agreement. In addition, this Agreement shall not be construed to in any way to affect any claims or causes of action that are now, or may in the future be, held by growers or elevators.

7. ASSURANCE OF PAYMENT BY AVENTIS. Aventis has assured the States that it has access to assets necessary to satisfy its obligations pursuant to Exhibits A, B, and C and pursuant to this Agreement. The Parties have agreed that negotiations will continue concerning the details of how this assurance will be implemented.

8. ADDITIONAL ISSUES AND IMPLEMENTATION. Aventis and the States expressly agree to continue discussing additional issues concerning StarLink corn as they arise.

9. TERM OF AGREEMENT. This Agreement shall be in effect for four (4) years from the date it is executed by the Parties.

Agreed:
Date:
John Wichtrich
Vice President, Commercial Operations
Aventis CropScience USA LP

Agreed:
Date:
Thomas J. Miller
Attorney General of Iowa on behalf of the State of Iowa and the following states:

BILL PRYOR, Attorney General of Alabama
JIM RYAN, Attorney General of Illinois
STEPHEN CARTER, Attorney General of Indiana
CARLA STOVALL, Attorney General of Kansas
ALBERT B. CHANDLER III, Attorney General of Kentucky
G. STEVEN ROWE, Attorney General of Maine
J. JOSEPH CURRAN, JR., Attorney General of Maryland
MIKE HATCH, Attorney General of Minnesota
MIKE MOORE, Attorney General of Mississippi
DONALD B. STENBERG, Attorney General of Nebraska
PATRICIA A. MADRID, Attorney General of New Mexico
WAYNE STENEHJEM, Attorney General of North Dakota
BETTY MONTGOMERY, Attorney General of Ohio
W. A. DREW EDMONDSON, Attorney General of Oklahoma
MARK BARNETT, Attorney General of South Dakota
JAMES E. DOYLE, Attorney General of Wisconsin

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