BAYER has come under fire from a group of angry US farmers, who are suing the German chemicals and drugs manufacturer for allegedly contaminating millions of dollars’ worth of their crops with its genetically modified rice.

The lawsuit is the latest litigation to hit Bayer, which is still reeling from the 2001 recall of its Baycol cholesterol-lowering medication. Bayer has spent €1.2 billion (£810 million) to settle more than 3,100 Baycol cases, and another 3,000 are still pending.

Bayer confirmed that the US rice farmers had filed a lawsuit alleging that the company failed to prevent its GM rice from contaminating their crops but declined to give further details.

The price of American rice has dropped dramatically in recent years, in part because US rice exports to the EU are restricted by laws controlling the sale of genetically modified crops. Last year, the EU imported 198,000 tonnes of long-grain rice from the US, worth $67 million (£35 million).

The dispute with the farmers came as Bayer revealed that it will cut some 1,500 jobs from its farm chemicals unit as sales at the division continued to slide.

Werner Wenning, chief executive, said that the company would cut 8 per cent of its farm chemical workforce — at an initial cost of €330 million but saving €300 million a year — because a drought in Brazil had hit demand for its fungicides.

Profit for the second quarter increased 11 per cent. Net income increased to €452 million from €406 million last year. Sales rose 5.8 per cent to €7.1 billion.

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