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VOL. 121 | NO. 128 | Thursday, June 22, 2006

Down and Out in Covington

Farmer struggles to re-emerge after $3 million judgment, prison term in Monsanto case

By Andy Meek

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THE FABRIC OF HIS LIFE: Kem Ralph stands with his son Josh in the family's Tipton County cotton fields. Ralph has been trying to recover from being sued by agrochemical giant Monsanto, being required to pay some $3 million in damages and serving four months in prison for saving genetically modified seed when he was supposed to buy more each year. He claims his actions - which included burning evidence - were justified. -- Photograph By Andy Meek

For the typical farmer in America's heartland, the struggle to get by is met with heroism and little fanfare. For Covington farmer Kem Ralph, getting by has been a little more complicated.

Since the late 1990s, he's gone to court, been on the receiving end of a nearly $3 million judgment, done a stint in prison and grown accustomed to seeing his name in the newspaper. Those were but a few of the consequences of locking horns with Monsanto, a major agrochemical corporation, in a patent infringement dispute.

And now, away from the intense public glare that has been attached to his case for more than six years, Ralph has filed for Chapter 11 bankruptcy.

Justice for all

His finances in shambles because of the legal fines, Ralph's situation after the flap with Monsanto - at one time even attracting the attention of the Australia Broadcasting Corp., which sent a reporter to interview him - quickly became dire. To make ends meet, he rented out property his family owns and now is convinced a rival farmer is trying to buy the property outright.

Chapter 11 bankruptcy protection allows a business owner to stay in business while a court reorganizes any debts. In some cases, when a business has debts that outweigh its assets, creditors can be given ownership of the entity after the reorganization process is finished.

So Ralph's bankruptcy filing, then, represents a last-ditch effort to save the nearly 3,000 acres his family farms in Shelby, Haywood and Tipton counties.

"I'm a farmer, and I'm still a farmer today," said Ralph, choking back tears. "They may take it away from me, but they're going to have to fight me first. All I want is justice to be served."

He Said, He said, She said
"I'm a farmer, and I'm still a farmer today. They may take it away from me, but they're going to have to fight me first. All I want is justice to be served." - Kem Ralph, Covington farmer sued for $3 million by Monsanto for saving genetically modified seed instead of buying more each season
"It's gotten to where they've got family members spying on each other. And you know what? The thing of it is, we were making a lot more money even before their (enhanced seed) ever came out." - Ralph's son Josh
"It's always our priority to try to settle things out of court, but we also have to protect our intellectual property. And what the farmers who call in (with tips) are essentially saying to us is, 'If I'm paying every year, my neighbor better be paying every year.'" - Monsanto spokeswoman Mica DeLong

For Ralph and other farmers like him, there is no justice in an arrangement to which Monsanto binds the farmers who buy the company's genetically enhanced seed. That arrangement is at the crux of Ralph's current legal and financial predicament.

Monsanto has patents on a variety of genes that can be added to crop seeds. By one estimate, Monsanto's seed accounts for 80 percent of the cotton and soybeans grown in the United States.

To offset the cost of research and development, Monsanto collects a technology fee on each bag of seed that's sold at the retail level. Farmers like Ralph are asked to sign an agreement that they will buy seed from one growing season to the next, as opposed to hoarding any unused seed.

The grapes of wrath

Ralph insists, however, he never signed any agreement, despite the fact that one was produced in court with what purported to be his signature. He claims it was forged, with a passionate denial that includes clenched fists and a voice quivering in anger.

Some of his anger also is directed at U.S. Dist. Court Judge Rodney Sippel, the Missouri judge who ruled Ralph was liable to Monsanto for damages. Ralph says he shouldn't have been involved in the case because Sippel once worked for Husch & Eppenberger LLC, one of the law firms that handles Monsanto's investigative work.

Through a tip placed to the company, Monsanto discovered Ralph was saving seed - which he admits he's always done - and took him to court. The company has an all-purpose 800-number that generates some 500 calls a year, an undetermined percentage of which are tips from farmers who say they know of people saving seed.

"It's gotten to where they've got family members spying on each other," said Ralph's son, Josh. "And you know what? The thing of it is, we were making a lot more money even before their (enhanced seed) ever came out."

Tall price to pay

Ralph, who burned Monsanto's seed that would have been used as evidence at his trial, was sentenced by a federal judge in 2003 to four months in prison and had a roughly $3 million judgment filed against him.

Monsanto says the tips - and technology fee - are justified.

"It's always our priority to try to settle things out of court, but we also have to protect our intellectual property," said Monsanto spokeswoman Mica DeLong. "And what the farmers who call in (with tips) are essentially saying to us is, 'If I'm paying every year, my neighbor better be paying every year.'"

She said Monsanto spends more than $700 million a year on research, more than any of its competitors in the market today. Monsanto spends eight to 10 years working to bring its products to the market.

The company also invests pre-trial settlement money back into local community causes.

Other farmers like Ralph are in court now fighting the same legal battle. But Tupelo, Miss., attorney Jim Waide said Monsanto has won every case that's been heard at the district court level.

"The problem Mr. Ralph had is that he couldn't present any legal defense, because he went out and destroyed the evidence," Waide said. "His case didn't turn out very well, and he got a ruinous judgment against him, such as he'd never be able to pay."

Righteous indignation?

Now, Ralph is convinced a local farmer with a large number of property holdings is conspiring with Monsanto to take his farm, too. He filed Chapter 11 bankruptcy when his debts became so large that he didn't know if he'd be able to keep his property and prevent anyone from buying it.

Ralph maintains his actions all along have been justified, and that one of the reasons he burned the seed was to help a friend who also was being targeted by Monsanto for saving seed - it wasn't just in his
own self-interest. For him, the bankruptcy filing represents the latest in a string of setbacks that have roiled his family.

"How do you live and deal with this every day, knowing people are trying to rob you blind?" said Josh. "I don't know if there's any light at the end of the tunnel for us or not."

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 79 146 10,368
MORTGAGES 95 202 13,529
FORECLOSURE NOTICES 19 43 2,687
BUILDING PERMITS 0 393 24,700
BANKRUPTCIES 62 122 10,014
BUSINESS LICENSES 21 37 3,773
UTILITY CONNECTIONS 99 248 14,805
MARRIAGE LICENSES 27 58 3,225

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