Bloomburg Businessweek
By Greg Stohr

(Updates with reaction starting in eighth paragraph.)

(Bloomberg) — The U.S. Supreme Court, ruling in favor of Monsanto Co., overturned a judge’s ban on the planting of alfalfa seeds engineered to be resistant to the company’s Roundup herbicide.

The 7-1 ruling shifts the focus of the environmental dispute to the Agriculture Department, which under today’s ruling now can allow limited planting. That would be an interim measure while the USDA finishes an environmental impact statement that ultimately might clear the way for unrestricted planting.

The justices said a federal judge in San Francisco went too far when he placed a nationwide ban on so-called Roundup-ready alfalfa seeds because of the possibility they would contaminate other alfalfa plants.

“An injunction is a drastic and extraordinary remedy, which should not be granted as a matter of course,” Justice Samuel Alito wrote for the majority. Justice John Paul Stevens was the lone dissenter.

Today’s decision may affect a similar fight being waged over Monsanto’s Roundup-tolerant sugar beet seeds.

Alfalfa, the fourth-most-planted U.S. crop behind corn, soybeans and wheat, is worth $9 billion a year, with annual seed sales valued at $63 million, according to a USDA study. Dairy cows are the primary consumers of alfalfa hay.

USDA’S Decision

The impact of the ruling will depend on the USDA and its Animal and Plant Health Inspection Service, known as APHIS. Until that office acts, farmers can’t plant the disputed seeds.

“We have Roundup Ready alfalfa seed ready to deliver and await USDA guidance on its release,” Steve Welker, who heads Monsanto’s alfalfa business, said in a statement. “Our goal is to have everything in place for growers to plant in fall 2010.”

The high court opted not to put in place a different court order, supported by USDA and Monsanto, that would have explicitly allowed for limited planting.

The Washington-based Center for Food Safety, which sued to halt use of the alfalfa seeds, said the ruling represented a victory because no planting can take place until the USDA acts.

“And at such time, farmers and consumers still have the right to challenge the adequacy of that process,” George Kimbrell, senior staff attorney for CFS, said in a statement.

A spokeswoman for APHIS, Suzanne Bond, said the office didn’t have any immediate comment and would release a statement later in the day.

Breyer’s Brother

The trial judge who blocked all planting was U.S. District Judge Charles Breyer, brother of Supreme Court Justice Stephen Breyer. As is his custom in such cases, Stephen Breyer didn’t take part in today’s ruling.

A San Francisco-based federal appeals court upheld Breyer’s order banning the planting. The Obama administration backed St. Louis-based Monsanto in the case.

Farmers and environmental groups, represented by the Center for Food Safety, sued to halt use of the alfalfa seeds.

They contended — and Breyer agreed — that the Agriculture Department was required to prepare an environmental impact statement before authorizing unrestricted planting of the seeds. That finding wasn’t at issue in the Supreme Court case, which focused on whether the nationwide planting ban was an appropriate interim step.

A draft environmental impact statement released in December reported no significant effect from the seeds on the environment or human health. The USDA said Roundup Ready alfalfa can reduce costs and yield more valuable hay because it contains fewer weeds. During arguments in December, a government lawyer said the final statement would probably be ready in about a year.

Organic Production

Organic alfalfa production has nearly doubled in recent years, while still accounting for less than 1 percent of total output, according to the USDA.

About 5,500 growers planted 263,000 acres of Roundup Ready alfalfa before the ban went into effect, Monsanto says. Monsanto doesn’t produce the seeds itself, instead licensing the technology to alfalfa seed makers including Forage Genetics International.

The case is Monsanto v. Geertson Seed Farms, 09-475.

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