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'It's time to wake up,' says grain buyer

by Robert Schubert
CropChoice editor

(Friday, Nov. 22, 2002 -- CropChoice news) -- The Department of Agriculture should require that plants designed to produce drugs and industrial chemicals be grown farther away from traditional food and feed crops, according to a Reuters interview of Fred Yoder, president of the National Corn Growers Association.

He wants to avoid a repeat of the recent contamination of corn and soybeans in Nebraska and Iowa from corn varieties that Texas-based ProdiGene developed to produce treatments for diarrhea and diabetes.

For starters, Yoder reportedly said, government regulators should increase the current half-mile separation distance to two miles, use dedicated tractors, planters and combines to sow and harvest the biotech crops and use only male sterile plants.

Some environmental organizations and food processor associations want to go further. At the very least, they advocate a moratorium on the so-called bio-pharm crops until stricter regulations are in place. A safer bet, some say, would be to use only non-food plants in the production of drugs. The most cautious skeptics and critics would add to that by requiring the bio-pharm varieties be grown in greenhouses in secluded places such as the desert Southwest.

That doesn't work for ProdiGene and other companies. They prefer to use corn because manipulating it to produce novel proteins is relatively easy and cheap.

They've used the promise of premiums to pique the interest of farmers. John Howard, chief scientific officer at ProdiGene, told Soybean Digest in October that farmers could expect to receive an extra $.50 to $1.00 per bushel for such corn.

"Those premiums are nothing considering that these pharm crops are supposed to be extremely valuable," says Dan McGuire of the smaller American Corn Growers Association. He points out the $.25- to $1.00- per- bushel premium in certain years and places for high protein Hard Red Winter wheat. He emphasizes that farmers need to be certain that they -- and not the transnational grain traders, some of which are involved in joint ventures with biotechnology companies -- are the ones collecting any premiums on food, feed or pharmaceutical crops.

"Also important to consider is how many acres and, therefore, how many farmers are actually needed to satisfy the demand for these crops," he says. "If it's only a few thousand acres, that could mean just a couple of farmers."

The implications of bio-pharming could grow beyond the agronomic to the economic. That's already happened with the first generation of transgenic food plants engineered to resist insects and herbicides, though the federal government may have muted the effects.

"Without the income transfer payments through federal farm programs that probably offset low grain prices," McGuire says, "farmers would have felt a much heavier economic hit from the lost exports caused by gmos [genetically modified organisms]."

Despite ProdiGene's bio-pharm contamination in Nebraska and Iowa, the still-lingering memories of bio-engineered StarLink corn finding its way into the human food supply, and the ongoing rejection of transgenic food by Asian and European consumers, U.S. farmers still embrace the technology. Why?

After suffering through decades of low prices for their harvests, farmers were looking for new ways to cut costs and boost their incomes. The biotechnology industry's answer came in the form of genetically modified soybeans, corn, cotton and canola. Monsanto and other companies promised that the technology would increase yields and cut herbicide expenditures.

While a number of independent studies, such as those by Charles Benbrook (http://www.biotech-info.net/troubledtimes.html) and Michael Duffy (http://www.cropchoice.com/leadstry.asp?recid=555) have raised some red flags, other industry-funded reports , such as one by Leonard P. Gianessi (http://www.ncfap.org/40CaseStudies.htm) , have lauded biotechnology.

But arguments over the efficacy of the modified plants aside, one trend continues. Fewer farmers are growing one or two types of crops on bigger and bigger tracts of land. The idea is to spread out fixed costs.

"If grain prices were adequate, people wouldn't have to farm more acreage and use more chemicals in the name of convenience to free up more hours to work an off-farm job," McGuire says.

Agricultural biotechnology is the latest installment in what Iowa State University agricultural economist Neil Harl calls the Great Paradox: "The aggregate effect of these crops is to increase output, but because of inelastic demand, producers receive less money." This has been happening for 80 years since the introduction of hybrid seed, and petroleum-based fertilizers and pesticides.

But a rude awakening might be dawning.

"This is a supply-driven technology and when introduced into a demand oriented food system, the stage is set for serious conflict and the consumer generally prevails," Harl says. "If one can't satisfy the demand then the other one will."

The United States is the "one" positioning itself to be a good supplier of genetically modified soybeans. Meanwhile, Brazil is moving to be a good source of non-engineered beans. Unfortunately for U.S. farmers, demand for their beans is down. Robert Wisner, also an agricultural economist at Iowa State University, points out that outstanding U.S. export sales to the European Union, plus what has shipped out to date, are running about 55 to 60 percent behind a year ago.

"That is significant because the EU has been our largest soybean market for 30 years," Wisner says.

A major European grain buyer tells CropChoice that with U.S. producers increasingly unable to supply non-genetically modified soybeans, he has worked with powerhouse food distributor Carrefour to buy anywhere from 300,000 to 400,000 metric tons of soybeans per year from Brazil.

Biotechnology supporters warn that the Europeans shouldn't be so sure they're getting genetically pure beans. They contend that farmers in southern Brazil are illegally planting Monsanto's Roundup Ready soybeans on a large scale.

"That is absolute misinformation," says the grain buyer. "Or perhaps you could call it a lie. How can you say Brazilians are lying about non-gmo beans being contaminated? They're tested before they leave Brazil and they're tested when they arrive in Rotterdam or other ports and the majority pass."

It's part of a situation that he finds perplexing: "Farmers and consumers in the USA seem blind to the information about rejection of these crops. It's time to wake up."