by Mark Carter
Posted 7/6/2011 04:26 pm
Updated 2 years ago
The claims process for Arkansas long-grain rice farmers to begin receiving payments from a $750 million settlement with Bayer AG over contaminated rice will begin this week.
Scott Powell, a Birmingham, Ala., attorney who represented many of the Arkansas farmers and was a member of the lead counsel team in the settlement negotiations, said Wednesday that plaintiffs in the case can begin the claims process this week and expect payments to begin in November.
Problems began in August 2006, when the U.S. Department of Agriculture announced that Bayer's genetically modified Liberty Link rice had contaminated the U.S. long-grain rice supply, which led to its banning by the European Union, one of the largest buyers of U.S. rice, and a dramatic drop in prices.
In March of this year, Arkansas County jurors awarded $137 million to Riceland Foods, the rice growers' cooperative based in Stuttgart, in its suit against Bayer over the GM rice, and in June 2010, a Lonoke County jury awarded 12 local farmers $48 million in another suit against Bayer over the rice.
Liberty Link was developed by Bayer to go with its line of Liberty herbicides. Liberty Link rice was developed to be the only thing left standing in treated fields, Powell said.
Whether or not contaminated rice is safe for human consumption still is debated, Powell said, but the impact on Arkansas rice farmers has been profound nonetheless.
Powell's plaintiffs likely will receive two lump sum payments between November and the summer of 2012, he said. About 6,500 U.S. long-grain rice farmers, most from Arkansas, were plaintiffs in the case. Arkansas produces almost half of all the rice produced in the U.S.
The negotiated settlement amount of $750 million represents a global cap, and if claims exceed that amount, payouts to individual farmers will decrease. The amount is the product of a model based on damage trials and previous suits related to the contamination. Farmers with claims will be paid based on factors such as market losses from the years 2006-10, Powell said.
Jackson County rice farmer and suit plaintiff Arlon Welch said the money he'll receive will be nice, but it won't begin to make up for the loss of revenue and uncertainty about the future he endured beginning in 2006.
"They're lucky I wasn't the judge. I'd put criminal charges on them," Welch said of Bayer. "I definitely think it was criminal. It was people taking money from you."
Welch said he was able to sell the rice at a lower price, but every grain had to be tested. In addition, all his rice bins and equipment had to be thoroughly cleaned after every crop.
"They couldn't take the risk that one seed might get left in with another batch and contaminate it," he said. "It took three of us two weeks to take the combine apart and clean everything. We had to, because if they found one grain [of contaminated rice], nobody would buy rice the next year."
Welch and his wife, Pam, live in the Balch community and farm about 1,700 acres of rice - 3,200 in all - at Amagon (Jackson County). Welch said the rice-farming community stuck together to make it through those first couple of years, mostly selling rice at much lower prices to developing countries. He said the settlement offers a small measure of satisfaction, but doesn't begin to make up for what his family endured.
"This settlement will keep me farming," he said.
Powell said Bayer has been put on notice by the EU to convince it that GM rice is not a danger to humans or otherwise find a substitute. Its Liberty Link rice is discontinued.
Powell's Hare Wynn firm has maintained a Little Rock office since 2001. In 2005, it helped secure a $42 million settlement for 48 Arkansas hog farmers in a fraud suit against Tyson Foods, and in 2000 won a $3 million judgment from Hillsboro Manor Nursing Home of El Dorado over alleged abuse.