Fwd: More GE News for Thursday, February 13, 2003

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Thu, 13 Feb 2003 04:00:22 -0800

 

 

More GE News for Thursday, February 13, 2003

 

More GE News From The Campaign to Label Genetically Engineered Foods

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More GE News for Thursday, February 13, 2003

 

1) Britain weighs liability regime for gene crops

2) Sen. Grassley-US will file biotech complaint vs EU

3) U.S. says " wrestling " with anti-EU biotech case

4) $10m fines to back GE laws - NEW ZEALAND

5) US farmers reach $110 million StarLink settlement

6) Rules set for bioengineered fish

7) GMA Says Stringent FDA and USDA Bio-Pharma Regs Needed to Maintain

Food Supply Purity

8) FDA Asked to Limit Pharmaceutical Crops

9) The Fear of Food - One by one, countries are coming out against crops

with engineered genes. America is isolated

10) Monsanto posts quarterly profit on seed sales

 

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1) Britain weighs liability regime for gene crops

 

LONDON, Feb 11 (Reuters) - Britain may implement new measures to protect

organic farmers in the event of their crops being contaminated by

genetically modified (GM) varieties, Environment Minister Michael

Meacher said on Tuesday.

 

Britain will decide later this year on commercial use of gene-spliced

crops after a three-year field trial designed to look at the

environmental impact of such plants, but Meacher said all farmers'

economic interests had to be considered.

 

Environmentalists say GM crops will contaminate traditional varieties

and change the countryside, while some scientists argue that they could

solve world hunger.

 

" Our approach to GM must be compatible with the government's ambitions

for the expansion of organic farming to increase the UK's market share

of organic produce sold in the UK from 30 percent to 70 percent, " he

told delegates at a conference in London.

 

Britain already has legislation in place covering environmental damage

via cross contamination, and the European Commission has also issued

proposals for a GM crop environmental liability regime.

 

" We are looking urgently to see whether in advance of the European

environmental liability directive...wheher we in the meantime do need a

domestic liability position, " he said.

 

Meacher said no conclusions had been reached on the technology.

 

" The government has not taken a view on the commercialisation of GM

crops. If the farm-scale evaluation results suggest that the crops in

question will have a negative environmental impact, then we will oppose

their commercialisation in the EU, " he said.

 

The final results of the GM trials will be published mid-year.

 

02/11/03 10:42 ET

 

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2) Sen. Grassley-US will file biotech complaint vs EU

 

By Richard Cowan

 

WASHINGTON, Feb 12 (Reuters) - The United States intends to push ahead

with a World Trade Organization complaint against the European Union's

biotech policy, but only after it irons out " political problems " related

to allied support for a war in Iraq, a senior Republican senator said on

Wednesday.

 

The Bush administration recently appeared ready to lodge the WTO protest

in hopes of getting the EU to lift its moratorium on approving

genetically-modified goods.

 

But last week, during a visit to Washington, EU Farm Commissioner Franz

Fischler said he had been told by U.S. officials that the decision had

been put on hold.

 

Sen. Charles Grassley of Iowa, who chairs a Senate committee that

oversees U.S. trade policy, told reporters that the looming Iraq war was

the reason for the Bush administration delaying an announcement of a

trade complaint.

 

" I expect that until the political problems over the Iraq war with

Germany and France are over and Europe generally, there won't be a case

filed. But there will be a case filed. "

 

Germany and France have been among the loudest European critics of

President George W. Bush's apparent plans to use military force against

Iraqi President Saddam Hussein soon.

 

Grassley, who ardently supports challenging the EU's biotech policy at

the WTO, noted that he had spoken to top White House staff and two Bush

Cabinet heads about the trade case.

 

CORN SHIPMENTS HAMPERED

 

But he stopped short of saying that any of those officials had assured

him the WTO complaint eventually would be filed.

 

Grassley represents a leading corn-producing state and U.S. corn

shipments to the EU have been hampered by its refusal to approve new

biotech products since 1998. An estimated $300 million in agricultural

sales to the EU are lost each year because of the EU policy.

 

Last month, Grassley urged the Bush administration " to get off its duff

and make a decision " to take legal steps against the EU moratorium.

 

Besides political problems related to Iraq, some U.S. officials also

have expressed concerns that filing a WTO complaint would further harden

European consumer attitudes against biotech goods.

 

Nonetheless, U.S. Trade Representative Robert Zoellick has been

outspoken in his desire to take the EU to the WTO.

 

But one source told Reuters last week that the State Department at the

last minute interceded to hold up the U.S. action out of concern about

European support for an Iraq war.

 

Grassley questioned the Bush administration's second thoughts, telling

reporters, " I don't understand why any American public official would

mind offending the French and the Germans right now. "

 

Grassley said he wasn't expecting Germany to commit any troops or

financial resources to a possible war against Iraq. " I don't want one

drop of German blood, one German euro, all I want is German moral

support, " he said.

 

02/12/03 15:40 ET

 

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3) U.S. says " wrestling " with anti-EU biotech case

 

BRUSSELS, Feb 10 (Reuters) - The U.S. administration is finding it tough

to decide on launching a trade dispute case against the European Union

over its ban on gene-modified foods, a U.S. trade official said on

Monday.

 

Officials of the administration of President George W. Bush have made

threatening noises about taking the EU to the World Trade Organisation

over the effective ban on genetically modified organisms (GMOs) but have

not set a date for a decision.

 

" People are genuinely wrestling with the question of what is the best

way to deal with this situation, " the U.S. trade official told

reporters.

 

Farm groups and influential lawmakers have urged the Bush administration

to seek a WTO ruling on the EU moratorium, which they say costs U.S.

farmers $300 million a year in sales.

 

The EU Commission has said a trade case would be counter-productive

towards its efforts to end the ban by pushing through legislation to

trace and label GM food before allowing it on supermarket shelves.

 

The U.S. trade official said the Bush administration was not only

looking at lost sales when considering whether to launch its case, but

at the example the EU was setting for the rest of the world with its

resistance to GM products.

 

U.S. officials have accused the EU of immorality in the GM case as the

bloc's stance has convinced some African countries to refuse aid as it

was GM food. The Commission has strongly rejected these accusations.

 

02/10/03 11:56 ET

 

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4) $10m fines to back GE laws - NEW ZEALAND

 

13.02.2003 - By FRANCESCA MOLD and ANNE BESTON

The New Zealand Herald

 

Researchers who break new rules governing the conditional release of

genetically modified organisms could face a civil law suit or a fine of

up to $10 million.

 

The Government yesterday confirmed it would proceed with its

long-signalled plan to change the law so that officials have the power

to approve the conditional release of GM organisms.

 

The conditions, applied on a case-by-case basis, could include

restricting the location and size of GM crops, not allowing flowering to

avoid contamination, importing only one sex of an animal to avoid

breeding and ensuring medical experiments are carried out under strict

monitoring.

 

The Government also announced the introduction of a strict civil

liability and penalty regime so that scientists who caused environment

damage or other harm by breaching the conditions of their research could

be sued or fined.

 

Environment Minister Marian Hobbs said the liability regime would send a

strong message to researchers that they would face severe consequences

if they broke the rules.

 

" We will take you out and penalise you. And it won't be with a wet bus

ticket. "

 

Ms Hobbs said the new law would make it easier for people to take legal

action because they would only have to show the conditions had been

breached. They would not have to prove negligence. The maximum penalties

are yet to be set, but are likely to be up to $10 million or a

percentage of the expected commercial gain of the research.

 

Yesterday's announcement came as no surprise to anti-GM campaigners

because the Government had signalled its intention to change GM rules

since a Royal Commission recommended proceeding with caution in 2001.

 

Genetic modification has been an intensely controversial issue for the

past couple of years, with strong community and political opposition to

any relaxation of the rules.

 

The issue heated up in the run-up to last year's election when the Green

party refused to support any Government that lifted a moratorium on

commercial release of GM.

 

Concern intensified when activist Nicky Hager released a book during the

election campaign alleging a contaminated corn crop had already been

grown in New Zealand.

 

The Government believes the changes it is making will strike a balance

between reaping the social and economic benefits of GM technology and

protecting individuals and the environment from harm. But Green

co-leader Jeanette Fitzsimons said it was simply a sign that the

Government was continuing to ignore public opposition to GM in the

field, food or environment.

 

She said some of the first applications under the new conditional

release category could include GM maize and corn crops, potatoes with

pest resistant properties and potatoes which incorporated a vaccine.

 

Ms Fitzsimons said the new GM laws would not protect the public from the

mistakes of " genetic engineers " . The liability regime was " weak and

disappointing " .

 

Anti-GM group the Sustainability Council of NZ said the Government had

left innocent victims to fend for themselves if a GM release caused

harm.

 

" It has gone against international commitments given in August to make

the polluter pay, " said the council's executive director Simon Terry.

 

The Green party said it would try to influence the proposed law changes

when they reached the select committee stage in April. The Government

hopes to have the amendments passed in time for the lifting of the GM

moratorium in October.

 

Ms Hobbs said the law changes simply set up a framework and were not

intended to make any decisions about the release of GM organisms in New

Zealand.

 

The new conditional release category would just be another option for

researchers other than fully contained laboratory experiments and full

commercial release.

 

State-owned Crop and Food spokesman Howard Bezar said his organisation

was particularly pleased that researchers would be able to propose their

own rules for field trials in consultation with ERMA. Crop and Food has

been discussing GM potato trials for at least two years but Mr Bezar

could not say when those trials might begin once the legislation was

passed.

 

Pro-GM Life Sciences Network chairman Dr William Rolleston was also

happy with the Government's plans but his group would not be leaving

anything to chance.

 

" Now it comes to the next critical phase which is the actual legislation

and we will be deeply involved in the select committee process, " he

said.

 

MAIN CHANGES

 

* A new conditional release category will allow GM organisms to be

released under strict conditions.

 

* Researchers who breach the release conditions can be sued or fined.

 

* The approval process for laboratory experiments with low-risk GM

organisms will be streamlined.

 

* The law will be tightened to stop tissue samples of animals not

present in New Zealand being imported and used to clone whole animals.

 

* A new fast-track system will be set up for the quick approval of

medicines and vaccines needed in an emergency.

 

* The Environment Minister's ability to step in to decide on the

introduction of new hazardous substances or organisms has been extended

to include consideration of cultural, spiritual or ethical effects such

an introduction would cause.

 

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5) US farmers reach $110 million StarLink settlement

 

CHICAGO - Feb 10 (Reuters) A group of U.S. farmers reached a $110

million settlement in a class-action lawsuit against two companies that

engineered and marketed unapproved genetically modified StarLink corn

that slipped into the U.S. food chain more than two years ago, lawyers

said.

 

StarLink Logistics and Advanta USA agreed to pay $110 million plus

interest to farmers whose crops were tainted with StarLink corn, or who

suffered from a drop in corn prices due to the controversy over

gene-spliced StarLink corn.

 

Melvyn Weiss of the law firm Milberg Weiss Bershad Hynes & Lerach LLP

said the preliminary settlement was approved on Wednesday by Judge James

Moran of the U.S. District Court for the Northern District of Illinois.

It still needs final approval.

 

A source familiar with the case said a hearing date for final approval

has been set for April 7. " It's basically to see if anyone objects to

the settlement, " he said, adding that non-StarLink farmers whose incomes

were affected could file a claim for a portion of the settlement.

 

" This agreement represents an outstanding result in a difficult and

hard-fought litigation, " said Weiss, who represents the farmers. He

declined to elaborate.

 

StarLink corn is not approved for human consumption for fear it could

cause allergic reactions. Japan, the top U.S. corn importer, bans

StarLink corn for animal feed as well.

 

StarLink corn - spliced with a gene that is deadly to the corn borer

pest that causes millions of dollars' worth of damage to the U.S. corn

crop - was planted in less than 10,000 acres when introduced in the

United States in 1998.

 

StarLink plantings grew to 315,000 acres in 2000 but still constituted

less than 1 percent of total U.S. corn seedings. Plantings of StarLink

were halted in the 2001 season.

 

Traces of StarLink corn were detected in taco shells in September 2000,

leading to a series of recalls of corn-based products from grocery

shelves across the country.

 

StarLink corn was also discovered in food products in Japan, spurring a

sharp decline in the country's purchase of American corn supplies. The

move triggered steep falls in the prices of U.S. corn.

 

The plaintiffs in the StarLink case claimed they had suffered

financially from a drop in corn prices due to StarLink's detection in

food products and the subsequent fall in exports, especially to Japan.

 

Some had also claimed that their non-StarLink corn crops were tainted by

the variety grown in neighboring fields.

 

A spokeswoman for StarLink Logistics confirmed the deal. " We are pleased

to have reached this agreement, which puts much of the liability issues

behind us. "

 

A spokesman for Advanta USA, which marketed StarLink seeds to farmers,

could not be reached for comment.

 

Japanese demand for U.S. corn has returned to near normal pace since

2000, although there was a fresh shudder in December 2002 when traces of

StarLink corn were detected in a cargo of supplies shipped to Japan from

the United States.

 

Data from the U.S. Agriculture Department showed that corn imports from

Japan remained strong in January despite the detection of StarLink in

about 1,200 tonnes in December.

 

Story by K.T. Arasu

 

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6) Rules set for bioengineered fish

 

By DON THOMPSON

THE ASSOCIATED PRESS

 

SACRAMENTO - California regulators on Friday adopted rules that could

allow production of geneticall engineered fish, though there are no

plans for such fish farms in the state.

 

The decision by the Fish and Game Commission came over the objections of

state senators who warned the regulations " effectively legalize

commercialization of transgenic fish species in California. "

 

The decision follows the commission's rejection last year of a proposal

to make California the first state to formally prohibit fish farmers

from introducing genetically altered fish into public waterways.

 

Commissioners and the Department of Fish and Game decided it is better

to regulate the fish to ensure none escapes into waterways where they

could potentially influence native species. The regulations create

standards for confining the fish and for securing buildings where the

fish might be raised.

 

The state is dealing in hypotheticals, since no one has proposed raising

the fish in California -- still, it is smart to get ahead of rapidly

advancing technology, said Ed Pert, the department's fisheries programs

chief.

 

" I know people are thinking, 'Oh, you're permitting this now, everybody

and their brother is going to be doing this,' but that's not the case, "

Pert said.

 

State Sens. Byron Sher, D-Stanford, and Wesley Chesbro D-Arcata, said

they fear the state could soon see permit requests if the U.S. Food and

Drug Administration approves an application by Waltham, Mass.-based Aqua

Bounty Farms Inc. to produce genetically modified Atlantic salmon for

human consumption.

 

However, an FDA decision is still a year or more away and the company

has said it has no plans to raise the fish in California.

 

Biotech fish grow faster and fatter than natural fish. Fish that escape

from West Coast fish farms could potentially compete with or crossbreed

with protected wild Pacific salmon, the senators said in asking for a

delay in adoption of the standards.

 

California should ban the fish, not issue permits for them as allowed in

the regulations, the senators said.

 

Posted on 02/09/03 06:35:09

 

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7) GMA Says Stringent FDA and USDA Bio-Pharma Regs Needed to Maintain

Food Supply Purity

 

WASHINGTON, Feb. 6 /PRNewswire/ -- In comments filed with the U.S. Food

and Drug Administration today, the Grocery Manufacturers of America said

plant-made pharmaceuticals (PMPs) require stringent new regulations to

ensure continued consumer confidence in the absolute safety of the U.S.

food supply.

 

GMA's comments were filed in response to proposed guidelines published

by the FDA that outline requirements for developing and manufacturing

PMPs. In its comments, GMA addressed the need to include clear direction

in the final guidelines for maintaining the purity of the U.S. food

supply as well. GMA stressed its support for the potential benefits of

the technology but said the FDA and U.S. Department of Agriculture must

implement more stringent regulations before the technology is more

widely used in new field trials approved by the USDA or in large-scale

commercialization. GMA's comments apply to plant-made industrial

products as well as PMPs.

 

" Biotechnology has great potential to bring new benefits to consumers, "

said GMA Senior Vice President of Government Affairs Mary Sophos.

" However, now is the time to ensure that the appropriate and necessary

regulations for PMPs are in place, and that safeguards for the U.S. food

supply are implemented before this technology is more widely used. "

 

" Plant-made pharmaceuticals aren't meant to make it to the dinner

table, " added Sophos. " To minimize the possible risks, a clear system of

regulatory enforcement and liability needs to be in place for the

development, testing and eventual commercialization of PMPs -- just as

we require strict regulations for conventional drugs made in brick and

mortar facilities. Until then, no permits for new field trials or for

commercialization should be issued by USDA because there is no room for

trial and error. "

 

GMA's comments include recommendations for various procedures to reduce

the risk of intentional or unintentional contamination of the food

supply by PMPs, including:

 

* A presumption against the use of food/feed crops for pharmaceuticals

unless the company developing the drug product clearly demonstrates that

it is not feasible to use non-food crops.

 

* Additional biological and physical containment procedures such as

" terminator gene " technology, the use of large-scale greenhouses and

isolation distances need to be considered and utilized.

 

* Land, labor and equipment dedicated solely to growing PMPs. This

extends to carefully selecting and training " pharmers " on the proper

handling of PMPs.

 

* Communication plans and readily-available tests to detect the PMP

should be required as part of field permits before allowing any open-air

release of PMPs in the case of potential contamination.

 

GMA plans to work closely with the FDA and USDA as they implement

improved regulations for PMPs. Additionally, GMA will maintain an open

dialogue with the biotech industry and other stakeholders to ensure that

the regulations meet the needs of the evolving technology as well as the

needs of the food industry and consumers for absolute confidence in the

U.S. food supply.

 

The comments submitted by GMA were also signed by the American Bakers

Association, the Biscuit & Cracker Manufacturers Association, the Food

Marketing Institute, the Institute of Shortening & Edible Oils, the

International Dairy Foods Association, the National Confectioners

Association, the National Council of Chain Restaurants, the National

Restaurant Association, and the National Soft Drink Association.

 

GMA is the world's largest association of food, beverage and consumer

product companies. With U.S. sales of more than $460 billion, GMA

members employ more than 2.5 million workers in all 50 states. The

organization applies legal, scientific and political expertise from its

member companies to vital food, nutrition and public policy issues

affecting the industry. Led by a board of 42 Chief Executive Officers,

GMA speaks for food and consumer product manufacturers and sales

agencies at the state, federal and international levels on legislative

and regulatory issues. The association also leads efforts to increase

productivity, efficiency and growth in the food, beverage and consumer

products industry.

 

SOURCE Grocery Manufacturers of America

 

02/06/2003 13:41 EST

 

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8) FDA Asked to Limit Pharmaceutical Crops

 

..c The Associated Press

 

WASHINGTON (AP) - The government should ensure a safer food supply by

imposing tougher restrictions on crops genetically modified to make

pharmaceuticals, the food industry says.

 

Stephanie Childs, a spokeswoman for the Grocery Manufacturers of

America, said Friday that current regulations are outdated.

 

``The science has in some ways outgrown the regulations that we have,''

she said.

 

The group, representing food companies, filed comments Thursday in

response to Food and Drug Administration guidelines proposed in

September. The rules would regulate plants genetically designed to grow

pharmaceuticals. Other trade groups, including the National Restaurant

Association, signed on in support of the comments.

 

Biotechnology companies are tinkering with genetics so plants could grow

pharmaceutical and industrial products.

 

The food industry recommends the government require biotech companies to

use only plants that are not grown for food as vehicles for making

industrial and pharmaceutical products, saying it would reduce the risk

of contamination.

 

Lisa Dry, spokeswoman for the Biotechnology Industry Organization, said

biotech companies believe rules will inspire trust but they want ``rules

and regulations that are based on science and not fear.''

 

Biotech companies have argued that they genetically modify common food

crops, such as corn, because they know more about those plants than

others.

 

The food industry is nervous about the plants partly because of an

incident last fall in which the government found that a company,

ProdiGene, mishandled remnants of an experimental corn in Nebraska and

mixed it with soybeans. Federal officials stopped the shipment before it

entered the food supply.

 

02/07/03 16:05 EST

 

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9) The Fear of Food

One by one, countries are coming out against crops with engineered

genes. America is isolated

 

By Fred Guterl

NEWSWEEK INTERNATIONAL

 

Jan. 27 issue - Tony Hall's career has always depended on his command of

certain facts about corn. For instance, did you know that last year the

United States produced more than 9 billion bushels, 42 percent of the

world's supply? And that a year's worth of U.S. exports would fill a

train of hopper cars from Paris to Beijing, by way of Calcutta?

 

BACK IN 1984-when Hall was a U.S. congressman from the corn-belt state

of Ohio-he went on a fact-finding mission to Ethiopia, which had been

suffering from famine, so he could better argue the case in Washington

for increasing U.S. food aid. Hall found more than facts. When he and

his entourage drove to the plateau north of the town of Alamata, " I

walked upon a scene of about 50,000 people just very peacefully lying

around, moaning-and dying, " he recalls. " When I came home, I decided

that there's lots of things you can do in Congress that really don't

amount to much. But this was important. "

 

Taking up world hunger as your own personal cause isn't the kind of

behavior you'd necessarily expect from an elected politician, but that's

what Hall did. He was instrumental in kick-starting several

congressional initiatives to combat hunger, and in 1993 he even fasted

for 22 days to make his point. Arguably his best shot at harnessing

America's vast grain harvest for the world's greater good came last

fall, when he arrived in Rome as the U.S. ambassador to the U.N. food

agencies. His timing, however, couldn't be worse. Right now the last

thing even the hungriest parts of the world want is genetically modified

American food, like Ohio's golden corn.

 

The Case for Caution

 

Europe has for years turned its nose up at American products like corn,

tomatoes and soy, which scientists have engineered to contain unnatural

genes. Now, in yet another permutation of a global anti-Americanism, the

rest of the world seems to be following suit. China, one of the world's

biggest agricultural producers, invested billions of dollars in GM crops

only to back off last year on imports and on new foreign investment in

the development of engineered seeds. Even the world's poor, it seems,

don't want America's grain, thank you very much. In November, India

froze food-aid shipments of corn and soy from the United States. And in

October, Zambia turned away 18,000 tons of U.S. corn, even though 3

million of its citizens teeter on the brink of starvation. " I'd rather

die than eat something toxic, " President Levy Mwanawasa told Sky News.

 

Zambia's rejection, Greenpeace exulted, was " a triumph of national

sovereignty. " But to Hall, for one, it was almost a personal affront.

" Just when you think you've seen everything, you see food being shipped

out of a country where starving people are stoning public officials and

rioting, " he says. " This is not an intellectual discussion, it's a moral

issue-a matter of life or death. "

 

What has inspired such opposition to so-called Frankenfoods? The answer

has grown as complicated as the gene splicing needed to create them.

American officials, isolated and perhaps a bit paranoid, see Europe's

influence behind every hesitation over GM crops. U.S. Trade

Representative Robert Zoellick calls Europe's moratorium on new GM foods

" immoral " and " Luddite " and wants to appeal to the World Trade

Organization. Europeans deny arm-twisting other regions. " There is no

European governmental pressure to do this, " says Alexander de Roo, a

Green Party member of the European Parliament. " It's the governments

themselves who are rejecting GM foods. " Of course, the European

Commission's Health and Consumer Protection directorate general " did

give documentation and research to concerned countries, " says

spokeswoman Beate Gminder, " but we [do] not make attempts to influence

their decisions. "

 

Americans are suspicious, in part, because engineered corn seems so

safe. After all, it doesn't glow in the dark and gives off no lethal

radiation. In fact, it looks and tastes just like plain old corn and,

genetically, it's almost identical-except for one added gene, which

scientists in the laboratory transplanted from Bacillus thuringiensis ,

a bacterium. The gene confers upon the corn the ability to repel pests

like the bollworm, a pesky bug that has the nasty habit of devastating

cornfields. The most widely used GM crops-namely, cotton and corn-have

this Bt gene.

 

As the U.S. agriculture industry is eager to point out, the technology

has been a big success: it has reduced the amount of pesticides farmers

have had to spray on their cornfields, with happy consequences for the

environment and human health. U.S. health regulators haven't been able

to find anything wrong with eating Bt corn. It is now found in roughly

two thirds of all corn products on American store shelves. GM foods

already on the market " are unlikely to present a problem to people's

health, " says Jorgen Schlundt, director of the World Health

Organization's Food Safety Program. Even Europe's officials admit that

health risks are minute. So why won't the rest of the world just relax

and bake some corn muffins? " Because of doubts, ignorance, evil, " says

Hall.

 

Perhaps. But there may be more to the skepticism over GM crops. In

India, for instance, officials have always maintained European-style

safety concerns about genetically modified foods. Although the

government approved Bt cotton last March-after a bruising four-year

battle-it has never OK'd GM corn or other edible crops. And the

controversy over cotton has only stiffened resistance. Last November,

authorities demanded a written guarantee that aid shipments from the

United States contained no GM grains whatsoever. Relief workers at CARE

and Catholic Relief Services couldn't comply. After six months of

stalemate, they had the sacks of flour shipped off to Africa. In the

meantime, India has allowed no new shipments of U.S. corn-soya flour.

Other products have similarly stalled: in November, New Delhi also put

off a decision on whether or not to accept GM mustard plants, even

though they've been testing them for years.

 

Regulatory officials are often as afraid of public opinion as of the

crops themselves. " We took a lot of flak over GM cotton, " says former

Genetic Engineering Approval Committee chairman, Achyut Gokhale. " It was

my job to ensure we weren't accused of overhastiness [over GMgrains]. "

The Indian public, like those in countries from France to Zimbabwe,

seems to have equated GM foods with U.S. agriculture-and trust neither.

They are afraid of foreign genes somehow contaminating their own crops

and fields, and they're afraid their farmers might grow dependent on

U.S. companies for GM seeds. " Genetic modification is just a weapon to

bring Indian agriculture under the dominance of American corporations, "

says Devinder Sharma, chairman of the Delhi-based Forum for

Biotechnology and Food Security.

 

Indian activists remember vividly the row a few years ago over StarLink,

a form of GM corn that had been approved for animal feed in the United

States, but which was found, to the great embarrassment of the U.S.

agricultural industry, to have made its way into Taco Bell burritos and

other products intended for human consumption. StarLink had been

engineered to contain a foreign protein suspected of causing allergic

reactions. Subsequent tests proved otherwise, but the damage was done.

Suddenly just about all U.S. grain, GM or otherwise, was suspected of

contamination-and loudly opposed.

 

China's recent about-face on GM foods also has as much to do with

politics as with science. The People's Republic was actually an early

and enthusiastic adopter of genetic farming. Chai Hongliang and his

brother Zhenbo, who farm cotton in Langfang, about 30 miles southeast of

Beijing, used to dump tons of pesticides on their crops to keep the bugs

from destroying their harvest. Five years ago they started using

government-approved Bt cotton, made by U.S. biotech firm Monsanto; the

brothers saved so much on pesticides they doubled their profits. They

even opened a tiny shop to sell the seeds for Bt cotton. Chinese cotton

farmers increased their productivity by 10 percent last year, by some

estimates.

 

But overall, Chinese farmers still could not compete against cheaper

U.S. crops, now available after the country joined the WTO. In the

spring, officials began requiring labels on all imports of GM crops.

Ships loaded up with 1 million tons of soybeans slated for export to

China sat in U.S. ports for weeks. Beijing eventually granted a

reprieve, but U.S. soy exports to China slipped 20 percent for the year.

Beijing has also declared a moratorium on investment by foreign seed

companies in the development of several new strains of genetically

modified plants.

 

What's interesting is that Beijing's moves are not simply a

protectionist ploy-reimposing de facto trade barriers forbidden under

WTO regulations. Backtracking on GM foods extends to China's own growing

agricultural industry. Since the late 1980s, Beijing has lavished money

on research into genetic farming techniques; it currently spends $100

million a year by some estimates. The idea was to boost productivity and

push exports beyond the 5 percent of agricultural production China

currently sells abroad. More than 100 labs have sprung up, and

researchers have invented 150 different strains of transgenic, or GM,

crops. " We all believed this was going to be very important technology, "

says Chen Zhangliang, a researcher at Beijing University who developed

virus-resistant tomatoes and sweet peppers. But last year, just as labs

were ready to commercialize their new crops, the Chinese government

stopped approving them.

 

Although officials cite the usual safety and environmental concerns, the

prospect of being shut out of export markets may be the more compelling

fear. Once GM crops are planted widely, it's difficult, if not

impossible, to remove them from the agricultural system. Keeping GM and

non-GM grains apart proved difficult in the case of StarLink. What's to

keep GM corn crops, with their powerful added gene, from overtaking

weaker natural corn strains-especially when Chinese peasants, mindful of

their pest-repelling qualities, plant them surreptitiously in their

gardens? China fears forever tarring its exports with the GM brush,

which would put the kabosh on markets in Europe, not to mention skittish

Asian countries like South Korea. It's not a theoretical threat. After

China developed GM strains of tobacco, Europe shut the door to Chinese

imports in the 1990s. " It significantly affected trade, " said Huang

Jikun, director of the Center for Chinese Agricultural Policy in

Beijing. " The government realized the [economic] impact biosafety

concerns could have. "

 

China's turnaround has underscored just how isolated Washington now is.

" We figured China was our buddy on biotech, " says a U.S. official. " Most

of our resources were going to problem areas like Europe. " That's now

changed. The U.S. government recently started training Chinese

regulatory officials on transgenic crops. Lobbyists for the U.S. soybean

industry, which supplies China with half of its soybeans, buttonhole

Chinese officials at conferences and send scientists information about

GM soy.

 

Environmental groups sense Washington's desperation. Greenpeace set up

shop in Beijing last summer and began working through the Chinese press

and Communist Party-controlled neighborhood committees to " build public

awareness of genetically engineered food, " says Zhou Yan, the group's

information officer. Greenpeace newsletters can now be found in the

waiting rooms of almost any governmental or scientific office that deals

with GM crops. In late 2001, Greenpeace teamed up with an environmental

group in southern China to produce a report warning of the dangers of

genetically modified organisms, or GMOs. (Another government

organization later pronounced the report unreliable and had it

recalled.)

 

There are signs that the Chinese public is beginning to have doubts.

When Huang's agriculture policy center surveyed more than 1,000 Chinese

consumers, 3 percent said they would not eat GM food-not many, but more

than previous studies have shown. " A few years ago when I talked to

policymakers, no one was against GMOs, " Huang said. " But in the past two

or three years, when I talk to some officials they say, 'I'm not going

to eat biotech food'. " Says the U.S. official: " One nightmare scenario

is that the [trade] protectionists work with the environmental

nongovernmental organizations, thinking it would be clever to encourage

antibiotech hysteria. That would be a disaster. "

 

A change in the risk-reward ratio might give GM crops a fillip. So far,

genetic technologies haven't led to drastically lowered prices but, as

supplies increase, some experts think 30 percent drops are likely. In

2001, GM crops worldwide covered 53 million hectares, 15 percent more

than the year before, according to a recent study by the International

Service for the Acquisition of Agri-biotech Applications, a research

organization in the Philippines. Brazil, the world's second-largest

producer of soy, has so far eschewed genetically engineered varieties.

But Brazilian scientists are developing several types of GM crops. If

they come up with tempting new seeds, Brazil may decide to take the

plunge sooner rather than later.

 

What ultimately happens in places like India, China and Brazil, though,

will depend a great deal on what happens in Europe. At the moment, GM

foods aren't terribly popular with European consumers, whose memories of

the fiasco over mad-cow disease are still fresh. Once better regulations

are in place, attitudes may soften. This year the EU is putting in place

labeling rules. If liability laws were also strengthened, so that

consumers felt they had better recourse against food-industry

shenanigans, European consumers might alter their resistance to GM

crops. " I think GM foods are going to be accepted by European consumers

sometime in the next five to 10 years, " says Julia Moore of the Woodrow

Wilson International Center in Washington, D.C. " If the U.S. is

smart " -if it doesn't further alienate European consumers with lots of

trade-war chest-thumping- " we're talking about closer to five than 10. "

The question is, will it be too late to change the minds of consumers in

the rest of the world, who won't have the benefit of such protections?

 

***************************************************************

 

10) Monsanto posts quarterly profit on seed sales

 

Wednesday February 5, 1:15 pm ET

By Carey Gillam

 

KANSAS CITY, Mo., Feb 5 (Reuters) - Monsanto Co. (NYSE:MON - News) said

on Wednesday farmer demand for specialty seed products helped the

agrochemical company post a quarterly profit, partly offsetting a

persistent slump in its trademark Roundup herbicide business.

 

The St. Louis-based company, which has been rocked by market

difficulties and upheaval in its top management, guided Wall Street

profit estimates lower for 2003. The company, which had withdrawn its

2003 guidance in October, on Wednesday gave a wide-ranging outlook for

the year because of a host of uncertainties, such as the difficult

economic conditions in Latin America and slower-than-expected acceptance

of new biotech products.

 

" You have this huge, enormous positive in ag biotech, " which includes

the specialty seeds, said Deutsche Bank analyst John Moten. " But in the

short term, there are some issues. "

 

Monsanto said it now expects 2003 earnings in the range of $1.20 per

share to $1.40 per share. Analysts' average estimate for 2003, as

surveyed by research firm Thomson First Call, was $1.43 per share.

 

Shares of the company were trading at $17.33, down 32 cents, in early

afternoon on the New York Stock Exchange. The stock has lost roughly

half its value over the last year.

 

Monsanto said it is making progress on its goal to shift the company's

focus to sales of seeds with genetically modified traits making crops

resistant to certain herbicides and insects, from its dependence on its

Roundup line of herbicide products.

 

" The seeds and traits business is critical for our business now and in

the future, " Monsanto Chief Operating Officer Hugh Grant said on a

conference call with media and analysts.

 

That business, best known for its herbicide-resistant soybean and corn

varieties, saw fourth quarter sales of $612 million, up 16 percent from

a year earlier. With new products expected in 2003, including a new

biotech corn that fights rootworm pests, the outlook is generally

favorable, company officials said.

 

Roundup, Monsanto's top-selling product, is under intense pricing

pressure from competitors, contributing to a 14 percent drop in Roundup

product sales in the fourth quarter. Revenue growth from seeds and

traits should help offset projected declines in gross profit for the

herbicide in 2003, the company said.

 

As well, Monsanto said its steps to cut the risk of doing business in

Latin America, struggling with an economic downturn, should continue to

help results in 2003. Monsanto said in mid-2002 it stopped extending

credit to customers, after a number of customers were unable to pay

their bills.

 

" We're well positioned for a return to more normal operations in that

region, " Monsanto Chairman and Interim Chief Executive Frank AtLee said

in a statement.

 

STILL SEARCHING FOR A NEW LEADER

 

For the fourth quarter, Monsanto reported net income of $61 million, or

23 cents per share, compared with a loss of $104 million, or 40 cents

per share, in the fourth quarter of 2001.

 

The fourth quarter of 2002 included restructuring charges of $20

million, or 8 cents a share. In the fourth quarter of 2001, charges for

restructuring and litigation matters were 49 cents a share, plus 8 cents

a share for goodwill amortization.

 

Net sales were $1.2 billion for the quarter, up 1 percent from a year

earlier, the company said.

 

To manage costs in the fourth quarter, Monsanto cut

research-and-development expenses by 6 percent, and selling, general and

administrative expenses by 13 percent.

 

Monsanto saw a tumultuous close to 2002, capped by the unexpected

resignation of President and Chief Executive Hendrik Verfaillie in

December. The company is still searching for a new leader, leaving the

business and investment communities with numerous questions about the

company's future.

 

Verfaillie's departure came after Monsanto in October revised its 2002

outlook downward and suspended its guidance for 2003 amid persistent

troubles in Argentina, drought in the U.S. farm belt and declining sales

of Roundup.

 

Officials said Wednesday that they were considering COO Grant as one of

the candidates for the job, though previous statements had indicated

they were looking only outside the company for Verfaillie's replacement.

 

Buckingham Research analyst John Roberts said the company has a lot of

work to do to win back the confidence of the investment community.

 

" There are still a lot of open issues, management being at the top of

the list, " he said.

 

 

 

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