(Dow Jones) — Bayer AG will start sending payments early next year to thousands of U.S. rice farmers as part of a $750 million settlement the company reached in a lawsuit stemming from market damage caused by genetically modified rice contamination.
Bayer and attorneys for the plaintiffs said Thursday that attorneys had met a threshold to trigger the payments. The settlement, announced in July, was not binding until enough farmers filed claims to account for 85% of the planted rough rice crop between 2006 and 2010.
The settlement concludes a four-year-old case that followed the revelation that traces of two strains of genetically modified rice, which hadn’t been approved by federal regulators, had entered the U.S. supply. The disclosure prompted several export customers to ban U.S. rice or impose strict testing requirements before allowing it into the country, which sent U.S. prices tumbling.
The first round of payments to farmers is expected to begin in early January, said Don Downing, a St. Louis-based attorney and one of two attorneys appointed to lead the plaintiffs’ case.
The contamination occurred between 1998 and 2001, during experiments with the rice strain on U.S. test sites. At the time, the strains were owned by chemicals company Aventis and were designed to make the rice resistant to the company’s own weed killer. Bayer bought parts of Aventis, including the rice strains, in October 2001 and made them part of its Bayer CropScience subsidiary.