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Out of the lab: Biotech-crop battle heats up as strains mix with others

(Friday, Nov. 11, 2005 -- CropChoice news) --

1. Out of the lab: Biotech-crop battle heats up as strains mix with others
2. A tough row
3. Voters reject Sonoma ban on genetically modified crops
4. Gene contamination may affect organic exports

1. Out of the lab: Biotech-crop battle heats up as strains mix with others

November 8, 2005

HUESCA, Spain -- For 15 years Felix Ballarin labored to perfect a strain of organically grown red corn. He figured the crop could fetch twice the price of traditional yellow corn because local chicken farmers say it gives their meat and eggs a rosy color.

But when the ears first emerged late last year, the farmer made a horrifying discovery: Yellow kernels were mixed in with the red. As government scientists would later confirm with a DNA test, the kernels had been contaminated with a genetically modified strain. No longer considered "organic," Mr. Ballarin's corn lost its premium value and his decade and a half of careful breeding was down the drain. "Why me?" he asked, pointing out the field choked with weeds where the corn stood last year.

As genetically modified crops win a growing share of the world's farmland, they are increasingly altering the makeup of traditional crops like Mr. Ballarin's corn. "Biotech pollution," as critics call it, results when genetically modified plants are mixed with ordinary crops by mistake, carelessness or just the wind. With billions of dollars in crop sales at stake, the issue is becoming a significant one for governments around the world. And it is beginning to pit growers of nonbiotech crops against the big biotech producers, as each side battles to serve their very different markets.

U.S. farmers say they are losing out on exports because overseas customers are afraid of contamination by genetically modified, or GM, varieties. Farmers of organic produce in both Europe and the U.S. say their crops are frequently tainted by stray GM seeds, forcing them to buy seeds from as far away as China to ensure purity.

Growers of biotech crops in the U.S. increasingly worry the struggle is hurting acceptance of their product both domestically and abroad. Three California counties have banned GM crops, and a fourth is considering doing so today. Beer-making giant Anheuser-Busch Cos. has demanded that its home state of Missouri keep a GM rice project 120 miles away from rice it buys to make beer. The European Union is now trying to establish buffer zones meant to halt the unwanted spread of GM crops. Spain is close to finalizing a law that would require GM crops to be grown at least 165 feet away from traditional varieties.

Such moves to restrict the spread of GM crops often are ineffective. Last month in Australia, government experts discovered biotech canola genes in two non-GM varieties despite a ban covering half the country. "Regretfully, the GM companies appear unable to contain their product," said Kim Chance, agriculture minister for the state of Western Australia, on the agency's Web site.

St. Louis-based Monsanto Co., the global GM leader, last year dropped plans to introduce the world's first bioengineered wheat amid fears by Northern Plains farmers in the U.S. that the new plant would contaminate the non-GM wheat they promise customers in Japan, Europe and South Korea. Increasingly those countries are enforcing strict rules on the makeup of non-GM products. Keeping out the GM strains that foreign customers don't want is a growing expense for American exporters. "It's just a mess for the grain traders," says M. Ann Tutwiler, chief executive of the International Food and Agricultural Trade Policy Council, a Washington think tank.

Future of Farming

Biotech crops have been held out by their producers and many scientists as the future of farming, improving agriculture and even human health. The first genetically modified plants made their own pesticides and tolerated exposure to herbicide, making it easier for farmers to spray weedkillers without hurting their crops. Scientists are now engineering plants to grow on less water and fertilizer, modifications that would reduce agriculture's toll on the environment.

Advocates argue that hardier plants could help Africa feed itself, and that future generations of the technology promise groundbreaking benefits. Already scientists have developed a strain of rice that could be used as a source of missing vitamin A for poor Asians. Monsanto is using genetic material from algae and fungi to modify plants so that they make healthier vegetable oil.

Biotech company officials say small leaks aren't a surprise. It's long been accepted in agricultural circles that farm fences are no barrier to plant reproduction. They argue that the biotech boom in the U.S. hasn't harmed the organic movement, pointing out that organic acreage has climbed in the U.S. since the first genetically modified crops were commercialized in the U.S. a decade ago. "We think co-existence is a reality," says Christopher Horner, a spokesman for Monsanto, which offers advice to buyers of its genetically modified seeds on avoiding problems with neighboring farmers.

To be sure, Monsanto and rivals such as DuPont Co. and Syngenta AG have a financial stake in how countries decide to deal with the leaky nature of crop biotechnology. Moves to shift liability to growers of biotech crops, or to the inventors, would slow the torrid growth of the market, which has more than doubled Monsanto stock over the past two years. Kevin McCarthy, an analyst at Banc of America Securities, New York, figures that crop farmers around the world paid a $2.2 billion premium for biotech crops this year, up from $1 billion in 2001.

GM critics have produced volumes of studies claiming to show that biotech food can cause allergies or that the world's biodiversity will be put at risk if biotech genes infect natural plants. All such claims are adamantly rejected by the GM industry, which can call on an equally large body of research to back up its counterarguments.

There's no evidence to date that biotech crops have caused any health problems. And GM crops now make up a majority of the world market in soybeans, along with big portions of the market in cotton, canola and corn. Total GM acreage globally climbed 20% last year to 200 million acres in 17 countries, according to the industry.

The U.S. government takes a laissez-faire attitude on GM contamination. As long as the genetically modified material in question comes from plants approved for human consumption, Washington doesn't see any safety threat. "Why do they need to be treated any differently?" asks Cindy J. Smith, deputy administrator of biotechnology regulatory services at the U.S. Department of Agriculture. "They're not any more unsafe."

Some local communities have stepped in. Mendocino County in Northern California, known for wine and pears, was the first U.S. locality to ban GM crops in March 2004. Nearby Sonoma County, a major wine and dairy producer, could become the next when it votes today on whether to declare a 10-year moratorium on GM crops; advocates of a ban fear biotech grains being fed to milk cows could eventually cause some unforeseen health problems, such as allergic reactions. Legislatures in both California and Vermont, meanwhile, are considering measures that would hold makers of GM seeds legally liable for incidents of contamination. GM seeds carry a unique genetic sequence that can be identified by testing laboratories.

Many Precautions

In the Midwest, some similar measures have been considered but rejected. So Lynn Clarkson, president of Clarkson Grain Co., a Cerro Gordo, Ill., grain marketer that specializes in non-GMO crops, goes to great lengths to try to keep his crops that way. He sends inspectors to visit fields before they are harvested and requires the farmers he contracts with to send him sealed plastic bags with samples of their grain for testing before they are allowed to bring their harvest to the elevator.

He uses an optical scanner to sort through blue and white varieties of corn. Since the biotechnology industry has only genetically modified yellow corn, the optical scanner kicks out any yellow corn it finds.

Despite the precautions, Mr. Clarkson finds genetically modified organisms in 6% of the grain he contracts with farmers to grow. A survey of organic farmers about their 2001 crops by the Organic Farming Research Foundation in Santa Cruz, Calif., found similar results: About 7% of 270 growers of organic corn, soybeans and canola reported GM materials in their crops.

Such a problem can be costly: An Illinois farmer can charge roughly three times as much for organic corn as for genetically modified corn. "Once we had to kiss good-bye to 20,000 bushels that had gotten into our bins," says Mr. Clarkson. "If you are a biotech farmer and your pollen comes over my fence, you are taking away my choice."

Now Mr. Clarkson is mulling growing crops in desert areas in parts of South America where genetically modified crops have yet to penetrate. "I think of it as a leaky technology. It is the nature of the thing," says Mr. Clarkson. In addition to adding to his costs, the persistence of contamination is limiting his market, he says. "We could do five times as much business in South Korea otherwise," Mr. Clarkson says.

Japan and the EU, the U.S.'s third and fourth largest agricultural exports markets, still allow small amounts of GM material in non-GM goods. But South Korea, the U.S.'s sixth-largest market, is moving toward forbidding genetically modified material of any kind in food that is supposed to be 100% organic. That limits what Mr. Clarkson can sell there.

Contaminated Seed

Craig Wedig, a Cuba City, Wis., farmer, blames contaminated seed for the GM crops that appeared on his organic cornfield in 2001. Mr. Wedig, 28 years old, had a contract to sell his crop to a mill making organic corn syrup for export. When the mill detected GMOs in the third and fourth truckload from his farm, he had to sell the corn for less money to a company making livestock feed.

The GMO discovery cost Mr. Wedig $2,250. He has since shifted his business so that the only food he sells comes from the milk and meat produced by his organic dairy herd. Genetically modified crops can't be detected in the milk or meat of the cows that eat them. "My advice to the organic farmers in Europe is to make sure that any GMO drift becomes the legal responsibility of the GM farmer," says Mr. Wedig. "Here, I'm responsible for my neighbor's pollen, and that's not fair."

In the 25-nation EU, most countries are working on rules governing how far GM crops can be grown from non-GM ones. Some are so strict that GM farmers worry they will amount to a virtual ban. European reluctance to allow wider planting of GM crops is part of a dispute the U.S. has brought against the EU at the World Trade Organization. A ruling is expected in January.

The debate over GM contamination has surfaced most passionately in Mexico. Four years ago, scientists from the University of California, Berkeley, discovered that GM corn had mingled with native varieties in the southern state of Oaxaca. The report, later supported by Mexican government research, staggered local farmers. Mexican peasants depend on corn for as much as 40% of their diet, using it in everything from tortillas to a hot drink called "atole."

On Agustin Leon Santiago's family farm in Oaxaca, maize seeds have been handed down from father to son for countless generations. "Each family has its own heritage, expressed in corn," said the 73-year-old patriarch, as three generations of Leons took a break from their chores. "We feel that the day our traditional corn is contaminated, we will lose a tremendous heritage going back thousands of years."

Mr. Leon's son, Jesus Leon Santos, is leading an anti-GM drive in the region, producing pamphlets and encouraging local farmers to plant only seeds that come from the region.

Nevertheless, the technology is spreading. In Europe, authorities have begun approving GM strains to be sold there after an effective ban on testing new biotech crops took effect in 1998. North of Barcelona in Spain -- the only European country with GM crops before the ban was instituted -- a trio of farmers took a late afternoon break recently to argue in favor of biotech. Leaning against a mud-caked Honda ATV parked next to rows of green corn stalks, Joaquim Paretas said his farm would be doomed without it. He plants a strain of biotech corn that defends itself against an insect known as the corn borer, a bug that burrows inside a corn plant, making it hard to combat with traditional insecticide. The GM plant produces a protein that, when eaten by the insects, gives them a deadly ulcer.

Traditional strains of corn, Mr. Paretas says, are weakened by the bugs and are often destroyed by high winds that sweep over the region late in the growing season. "If we didn't plant GM, we would face fierce competition from countries like the U.S. and Argentina and others who do," Mr. Paretas said. "We would have to give up our land and raise goats."

Balancing the needs of Mr. Paretas and those of Mr. Ballarin, whose red-corn effort took place around 220 miles away, is tricky.

Spain's evolving plan to require separating the GM crops from non-GM varieties seems to satisfy neither side. Mr. Paretas says it will be impossible to follow the rules as some of his scattered corn plots are only a few rows wide. He says he'll instead work out agreements with his non-GM neighbors to stagger their planting seasons.

Meanwhile, Mr. Ballarin says the 165-foot barrier is woefully insufficient. Looking over his rolling field, he points to droplets from a sprinkler carrying at least that far on the late afternoon wind. Pollen, he believes, can easily float farther.

---- David Luhnow contributed to this article.

URL for this article: http://online.wsj.com/article/SB113141680117190817.html

2. A tough row

Tatiana Serafin,
Forbes, 7 Nov 2005

In the race to woo U.S. farmers with genetically modified seeds, Swiss Syngenta is up against Monsanto. It's one ugly contest.

John Pedersen has farmed his HIS third-generation homestead for 38 years. He and his wife, Connie, have also been dealers for Golden Harvest, which sells conventional and genetically modified seeds for corn and soybeans, over the last 15 years. But now their twin livelihoods are in trouble. Last November the Pedersens received a letter informing them that, within a year, they shouldn't count on biotech seeds from Golden Harvest anymore. The warning came from Monsanto, which licenses the technology for those modified seeds and plans not to renew the agreement. Coincidentally, the licensee for the last year and a half is Monsanto's chief competitor: Syngenta AG of Basel, Switzerland. "We're being strangled," says Connie.

So is Syngenta, which is betting its future on sales to American farmers, who spend $3.6 billion a year on bioengineered seeds. But to set down roots in the U.S., Syngenta (2004 revenue: $7.3 billion) relies on certain Monsanto technology until it gets approval for its own rival seeds. And Monsanto, whose modified seeds are planted in half of all cornfields and more than three-quarters of soy fields in the U.S., isn't willing to surrender a square inch of its virtual monopoly without a fight. Michael Pragnell, Syngenta's chief executive, is happy to put up his dukes. "Farmers don't like being held ransom to one supplier," he says.

Syngenta's progenitor, Ciba-Geigy, toyed with biotech in the mid-1990s when it introduced an insect-resistant corn seed. In November 2000, when Syngenta was formed from agricultural units of Novartis and Zeneca, biotech seed sales were a paltry $171 million, or 2% of sales (up through mid-2005 they amounted to $431 million, or 8%). Pragnell spent his first two years laying off 3,000 or so employees and closing overlapping manufacturing and research sites (trimming costs by $362 million by 2002). Sales of Syngenta's bread-and-butter pesticide, fungicide and herbicide sprays, which have hovered between 80% and 85% of revenue, were threatened largely because farmers planting hardier genetically modified seeds needed them less. So Pragnell put his money on the newfangled stuff sold to U.S. farmers.

Trouble was, Syngenta had but one biotech offering of its own; as a result, it has had to play catch-up from a standing start. Its U.S. brand, NK, licensed an herbicide-tolerant technology for soybeans from Monsanto. Its modified seeds to protect against corn rootworm won't be on the market until 2007. Monsanto, by contrast, already has so-called triple-stacked seeds that protect against an herbicide, as well as against two insects; Syngenta's may be out by 2008. The ultimate prize, awaiting federal approval, is a corn-seed additive that is more digestible to animals than traditional (prebiotech) corn and another that can better resist drought. "Long-term independence will come when we get regulatory approval for our own products," says Pragnell, a Brit who spent 20 years at Courtaulds Plc., the giant textile company, before heading to Zeneca Agrochemicals. In the States approval involves a combination of thumbs-ups from the U.S. Department of Agriculture, the Environmental Protection Agency and/or the Food & Drug Administration. That's on top of field testing, which can take two years or more.

Monsanto has a three-year lead on altered seeds. The St. Louis agrogiant is madly boring into biotech, as it must. With its chemicals business, Solutia, spun off but still a legal liability, and its previously bestselling pesticide, Roundup ($2 billion in sales and falling), now off-patent, genomics and seeds represent its best hope and 52% of its $6.3 billion in sales for the fiscal year ended Aug. 31.

Pragnell had plenty of cash to buy into the game. However, the shortlist of suitable acquisition targets--which license their seeds--has put Syngenta in the untenable position of both partnering and colliding with Monsanto. As a result the two rivals are fighting it out less in the fields than in the courthouse.

In May 2004 Syngenta acquired from Bayer the rights to produce corn seed that can tolerate the herbicide glyphosate, providing the same protection against weeds as Roundup. But Monsanto, claiming it had developed the herbicide-tolerant technology, retaliated. In a patent-infringement suit it alleges that the rights to that technology could not be transferred from Bayer to Syngenta. Monsanto later sent letters to farmers, ominously suggesting that certain biotech seed brands (read: Syngenta's) were "illegal" for human consumption in Europe--and hence useless for export. Some farmers called the threat crude propaganda and continue to send their crops for animal use.

Pragnell's next acquisitions sparked similar flare-ups. His $680 million purchase of U.S. seed players Garst and Golden Harvest in June 2004 nearly tripled Syngenta's position in gene-spliced corn and soy to 15% of the total market. Soon after, Monsanto pulled the plug on licenses with Golden Harvest and sued Syngenta for patent infringement; Garst licenses probably won't be renewed. A Monsanto rep insists this isn't revenge. The company, he says, is simply enforcing a "change-of-control clause" in the contracts.

Syngenta doesn't quite see it that way. It responded with an antitrust suit in July 2004, alleging that "Monsanto launched a scorched-earth campaign to cut off Syngenta's access to the market"--essentially intimidating farmers into staying away from Garst and Golden Harvest seeds. A related complaint charges Monsanto-owned seed companies with poaching Garst employees to obtain trade secrets. Monsanto says both suits are frivolous and accuses Syngenta of inappropriately exploiting Monsanto technology.

The war of the acres isn't likely to end anytime soon. Syngenta reported a 6% increase in total seed sales for the first half of the year to $1.2 billion, but this was largely driven by the selloff of existing stocks of Golden Harvest and Garst seeds. Until it breaks free with its own seeds, the company must still pay Monsanto an estimated $8 per acre each time it uses the technology, equivalent to giving up 30% of its operating profit, reports analyst Patrick Lambert at equity research firm Helvea. To boot, Monsanto has recently been raising those fees. No big mystery why Syngenta's stock, which trades as an ADR, has been stuck for some time at $21.

Out on the horizon things look brighter. Last year Pragnell began moving his biotech seed R&D operation from the U.K. to the more welcoming Research Triangle Park in North Carolina. Syngenta has some cool ideas in development, from rice that packs a greater vitamin A punch to "biopharmaceuticals," plants that provide raw materials for drugs, as well as hybrid fruits and veggies. But along the way it must avoid dumb mistakes--like the accidental sale announced earlier this year of a strain of modified corn that didn't have regulatory approval. The company had to pay a $375,000 fine. Sighs Pragnell, who is 58: "Things we don't control can derail us."

3. Voters reject Sonoma ban on genetically modified crops

Associated Press

SANTA ROSA, Calif. - A proposed ban on planting or cultivating genetically altered crops was rejected by Sonoma County voters Tuesday night.

With 100 percent of precincts reporting, Measure M lost 56 to 44 percent in one of the county's most expensive ballot fights ever.

Supporters and opponents of the proposed 10-year ban spent a combined $850,000. Only three counties in the nation - all in California - currently ban genetically altered crops.

Lex McCorvey, executive director of the Sonoma County Farm Bureau, which opposed the measure, said the margin of victory was a "strong show of support for local agriculture."

Opponents of the ban argued that most packaged foods in the United States have some genetically modified component, and a ban could hurt the local economy.

"To place our local farmers and ranchers at a competitive disadvantage to their peers in our state would have been devastating," McCorvey said.

Sonoma County joined Humboldt, Butte and San Luis Obispo counties, which also voted down similar biotechnology bans in November 2004.

"Regardless of the outcome, we think it's a tremendous victory because of the grassroots support in the community," said Daniel Solnit, campaign coordinator for GE-Free Sonoma County. "This fight's going to continue, and I believe this country will be GMO-free within a decade."

Mendocino County voters in March 2004 were the first in the nation to enact such a ban, overwhelmingly approving the measure despite a well-funded counter campaign from the biotechnology industry.

Voters in Marin County, a mostly suburban region just across the Golden Gate Bridge from San Francisco, followed suit later that year, enacting their own ban on genetically modified crops. The Board of Supervisors in tiny Trinity County also passed a similar ban.

Anti-biotechnology crusaders, who point to the health risks of eating genetically altered foods, have lobbied for outright bans in Hawaii and Vermont, but California remains the only state in the nation where voters have enacted such bans.

McCorvey said he hoped Tuesday's victory would "send a strong message" to other counties that similar bans should be blocked elsewhere in the state.

The bans are largely symbolic because few - if any - genetically engineered crops were grown in those counties. The same is true for Sonoma County, where the winemaking grape is king. No genetically engineered grapes are commercially available.

4. Gene contamination may affect organic exports

By B S Satish Kumar
Deccan Herald News Service

Bangalore: An internationally renowned scientist has cautioned that the country's organic exports might be rejected due to gene contamination, if India permits commercial cultivation of genetically modified (GM) food crops.

Hungary-based toxicologist and nutrition expert Arpad Pusztai, who was in Bangalore recently, told this reporter that there was every possibility of organic crops getting polluted due to crossing-over of genes from the GM food crops, if the government gives permission for commercial cultivation of GM food crops.

The caution by the scientist -- who conducted a pioneering study on the impact of GM potatoes on rats and concluded that these varieties affected their growth as well as their health -- comes at a time when NGOs and green activists are suspecting that the government is setting the stage for allowing commercial cultivation of certain GM food crops in the near future.

As the average land-holding size of farmers in India is just around 1.50 hectares, it is simply impossible to prevent crossing-over of genes and genetic pollution due to GM crops, the scientist argues. "Organic agriculture and BT cannot co-exist, especially in India due to small land-holdings," he remarked, while taking a different view from that of the Indian policy makers, who are for such a co-existence.

At present India has allowed commercial cultivation of only cotton crop. This has not polluted organic food crops, as normally the genetic pollution occurs within similar species, the scientist explained.


Pointing out that any organic produce has to be certified by an authorised agency to show that it is grown organically, he said the Indian organic produce can never pass certification tests if GM food crops are allowed to be cultivated.

Most of the Western countries, especially the European ones, which can provide a huge market for Indian organic produce, are very particular about non-GM crops and have stringent certification, he pointed out.

"The problem with GM crops is that they are unpredictable. With whatever research has been done so far, it is not possible to ascertain the impact of GM crops on human health. We are yet to achieve precision regarding research in this field.

"Hence, we should exercise caution and conduct more research before jumping into commercial cultivation of GM food crops," he cautions. "In the absence of safety studies, lack of evidence cannot be interpreted as proof of safety."

He denied the argument that BT is a must to take care of India's increasing food requirements. Even organic farming can take care of food requirements provided you pump the same amount of money into research that is being invested on BT research.

Excess food

Citing a FAO study, he says the world has 125 per cent more food than the requirement of the global population. But it has not been able to reach all due to distribution problem and not due to production shortage.

Greenpeace genetic engineering campaigner Thangamma Monnappa too observed that empirical evidence from all over the world shows that contamination does occur wherever GM crops have been introduced alongside conventional or organic crops.