This paper discusses the regulation on transgenic cotton in perspective of actual practices and needs of poor farmers in Chaco Province – Argentina. The aim is to disentangle the extent to which the existing regulation take account of all farmers’ practices and whether existing regulation, as it is designed and implemented has had any effect on improving the livelihood of poor cotton farmers. Based on fieldwork done in Chaco in June 2008, we claim that the regulatory designs neglected to take into account small farmers’ traditional long-standing practices regarding relations within the value chain. As a consequence, poor farmer’s real seed trade occurs beyond The Seed Law. On the one hand, this implies that these farmers do not pay royalties on IPR. But on the other hand it also implies they have no protection over the quality of seeds they buy. Moreover, informality also creates risks at national level because it introduces further weakness in the ways in which ecological risks can be managed, and potentially threatens continued access to international markets. The paper put forward guidelines for policy action.