America challenges ban on GM foods
Agrochemical firms believe the tide of consumer opinion is on the turn

By Stephen Castle

The Independent/ 14 May 2003

Europe and America were on course for another bitter dispute yesterday when Washington challenged an unofficial EU moratorium on new genetically modified products. The US government said it intended to take the EU to the World Trade Organisation, arguing that its refusal to grant any licences for new GMOs since October 1998 was an obstacle to free trade. The American decision provoked an angry reaction from the European Commission, which described the move as "legally unwarranted, economically unfounded and politically unhelpful". Pascal Lamy, the EU trade commissioner, added: "The EU's regulatory system for GMOs' authorisation is in line with WTO rules: it is clear, transparent and non-discriminatory. There is therefore no issue that the WTO needs to examine." Although there is no formal EU embargo on new licences being granted, a substantial minority of countries, led by France, have said that they will block all applications until new legislation on safety and labelling is in place. The group argues that it is simply reflecting concerns among public opinion in Europe. But pressure for action has been mounting from the farming lobbies within America, alarmed that Europe's anxieties on GM food will spread around the globe.

Is Europe growing to love GM food?
Agrochemical firms believe the tide of consumer opinion is on the turn

Author: Veronique Lorelle

Le Monde / The Guardian Weekly 28-11-2002, page 29

Could the fortunes of the champions of genetically modified (GM) crops be changing? While the French activist Jose Bove again faces the prospect of being jailed for destroying GM crops, the European Union is discussing whether to lift the moratorium on transgenic food crops. "We've made great progress," the European health commissioner, David Byrne, said in September.
For the moment, however, agrochemical firms are in deep crisis. Diversification in the manufacture of pesticides used in GM crop production has yet to produce substantial profits. Last month, for the second time in a year, Monsanto, the world leader in GM seed production, lowered its profit forecasts, prompting an 11% drop in its share value on Wall Street.
On November 14 Germany's BASF announced a 15% drop in sales for the third quarter. It also expects to give up its new agrochemical sites in the next few months. And Dow Chemical has decided to opt out of the sector. Officially, it is looking round for a partner, to create a joint subsidiary in which Dow Chemical is not too keen on holding the majority interest.
The EU moratorium was announced five years ago and came into force in 1999. Since then industry has constantly regrouped. Big corporations such as Novartis and Aventis have got out of agrochemicals to concentrate on pharmaceuticals, where profit margins are higher. Abandoned by their parent companies, Syngenta - created out of the merger of the agrochemical divisions of Novartis and Zeneca in 2000 - and Monsanto (formerly Pharmacia) have been trying to raise funds on the stock market.
The French group Aventis, which was a pioneer with its Starlink maize, sold its CropScience division to Bayer last spring. However, Bayer, the world's second-largest agrochemical firm, did not want Starlink. This GM maize, designed only as animal fodder, was found to have entered the United States food chain in 2000.
In theory, the possible lifting of the ban on GM crops should reinvigorate firms operating in the sector. While some EU countries, including Spain and Britain, are impatient for the ban to be lifted, others, notably France, still hesitate to authorise the growing of GM crops. "We don't expect any progress [on the subject] in Europe before 2005," Hendrik Verfaillie, chairman of Monsanto Belgium, was reported as saying earlier this year.
"We haven't completed the obstacle course," says Andre Goig, European chairman of Syngenta Seeds, which was the only company to sell GM seeds in Europe (25,000 to 30,000 hectares of maize, resistant to the corn-borer moth, were sown in Spain).
Scared off by last summer's destruction of GM plant trials, many European companies stopped their research activities in Europe. Advent, the Dutch seed company, transferred its research centres to the US. But six years after the first GM crops took root in the US, their traditional cash cows - pesticides - still provide almost 70% of the agrochemical companies' earnings. Seed sales account for between $12bn and $14bn in a market totalling $41bn. Sales of GM seeds amounted to little more than $3bn last year. However, Francois Thiboust of BayerCropScience says: "At the risk of being accused of relentlessly making the same point, I must say our companies see no future, no possible innovations without recourse to GM technologies. It's impossible to turn back."
A Fortis Bank study issued in June notes that the demand for GM seeds is growing at 10-15% a year, compared with 3-4% for traditional seeds. It adds: "Apart from an increased acceptance of GM plants as we know them today, the seed market will benefit from the development of new, more quality-conscious products, such as better-tasting products that have a higher nutritional value."
Goig notes that there are "too many elections between now and 2005 in several European countries: 2005 could be the year of GM seedlings harvested in the autumn. But while Europeans keep talking, other coun tries are working on their second generations of GM cotton and soybeans."
Convinced that GM crops will soon be the norm in agricultural production, agrochemical firms have been continuing to make international investments, developing sales in the US, Argentina, India and China, and concluding agreements among themselves. Pioneer, Dow, DuPont and Monsanto have stopped their bickering over patents. This will enable them to transfer one company's technologies to other varieties, offering farmers the most attractive packages. "Even if the moratorium is lifted in Europe, it would still be necessary to update seed varieties and the technologies we propose," said Thiboust. "Everything ground to a halt five years ago, which is a long time in terms of the progress made in crop varieties."
All the agrochemical firms have to do now is convince their customers in the food and agriculture industry, who are concerned not to upset their consumers. However, a European survey shows that opposition to GM foods is weakening. While 30% of consumers remain viscerally opposed, the other two-thirds are warming to GM foods under certain conditions, especially if they are cheaper.

Return to TOP of page

Global GM market shows signs of wilting
Static profits, tighter laws and consumer health doubts slow growth of disputed technology

John Vidal

The Guardian Weekly 20-9-2001, page 26

The global genetically modified food bubble may have burst after almost 10 years of growth. Companies are investing less in research than five years ago, profits are static, labelling and import laws are being tightened up, the promised new generation of crops that could bring health benefits is still years away, and no major new markets are expected to develop for some time. Paradoxically, research for the Guardian has found that in the United States the area planted with GM crops is still increasing and, at more than 44m hectares worldwide, is 25 times what it was five years ago. Moreover the industry has now persuaded almost all governments and world bodies to back the bitterly disputed technology.

But Sergey Vasnetsov, a leading chemical industry analyst with Lehman Brothers, says: "The outlook [for the GM food industry] is less certain than it was three years ago. The euphoria has gone. Growth has fallen significantly. The industry has overstated the rate of progress and underestimated the resistance of consumers.

Benedict Haerlin, Greenpeace International's GM analyst, agrees: "The wonder times are over. The promises have not materialised. There are still only four major crops being grown." But GM food companies are confident that they can overcome regulatory hurdles and mistrust. The world leader, Monsanto, whose seeds were planted on more than 32m hectares last year, is conducting field trials in many developing countries and reported an 11% increase in area planted. However, most of the new plantings have been in North America.

Mr Vasnetsov is scathing about the claims made by the United Nations, chemical companies and scientists that GM crops will alleviate hunger in developing countries. "Let's stop pretending we face food shortages. There is hunger, but not food shortages. GM food is for the rich world. The money from GM is in developed countries. The battle is in Europe," he says. Mr Haerlin agrees. "No GM company is going to produce varieties for poor countries unless it sees a market," he says. US analysts fear that GM crops are still a North American phenomenon, with the rest of the world proving increasingly cautious. The US now has 80% of all plantings, followed by Canada, Argentina and China. Ten other countries grow small amounts.

Overcoming Europe's five-year-old moratorium on new commercial plantings is crucial. European Union draft laws announced in July would allow imports of conventional crops with 1% contamination by GM organisms and allow new GM crops to be grown. The laws could also increase the buffer zone between GM and non-GM crops by up to 5km. The industry is expected to lobby to relax the limits. The government and growers in the US fear that their $44bn food export industry is being undermined by increasing regulatory pressure in other countries. Thailand, the world's largest rice exporter, is bringing in strict laws on labelling and traceability. Algeria, a large food importer, may completely ban the import, manufacture or sale of GM products. Japan, which takes 20% of all US food exports, worth $11bn a year, has imposed tough labelling rules on 24 product categories. In Sri Lanka the government has come under intense pressure from the World Trade Organisation and business not to reimpose a ban on imports and growing of the crops.

The US government and farm organisations admit that doubts over GM products have damaged exports. Europe, Japan, Taiwan and South Korea now largely buy non-GM maize and soya from Brazil and China rather than the US. The US department of agriculture recently lowered its maize export forecast by 50m bushels as a result of GM's unacceptability. Meanwhile legal uncertainties surrounding the testing of GM crops have led some European biotech and seed companies to shift their research to North America. The companies say farmers are happy with the performance and profitability of the crops, but a recent survey of the 14,000 members of the American Corn Growers' Association suggested 78% would abandon GM to recover lost export markets.

While animosity to planting GM crops may have peaked in Europe, consumer support is waning in the US. An ABC poll in June found that 52% believed GM foods were "not safe to eat", and only 35% expressed total confidence. Last year a Gallup poll found that 51% saw no hazard.

The hoped-for "ethical" GM crops that have been promoted by governments and scientists are reported to be years away from markets. Subsistence farmers will not be able to benefit from Syngenta's much-hyped "golden rice", modified to include vitamin A, for at least four years because at present it is only viable in temperate climates.

Monsanto is preparing to introduce GM wheat within two years, but US and Canadian farmers, who dominate world exports, are cautious. More than 200 Canadian groups, including the National Farmers' Union and the Canadian Wheat Board, want to halt the test plantings, fearing GM wheat will damage exports. However, in the past two months the UN has claimed that GM crops could significantly help developing countries, the EU has taken the first steps to ending its moratorium on new plantings, Britain has sanctioned 30 more major trials in readiness for commercial growing, and the New Zealand government has strongly backed the crops.

Return to TOP of page

Monsanto's GM hopes for Europe fade

David Teather in New York

The Guardian Weekly 22-8-2002, page 1

Monsanto, the United States company faced with widespread opposition to its genetically modified products, has conceded that it will take at least another three years before winning approval for their sale in Europe. The firm, which has become the bete noire of campaigners against GM crops, said it was working on the assumption that it will make no progress in Europe until 2005. Since 1998 there has been a moratorium on the approval of GM crops by the European Union as a result of public anxiety about potential risks. European consumers have become unsettled by unrelated food scares, including mad cow disease.

Monsanto also expects a lack of progress in Brazil, a key producer of soya beans, which has managed to resist pressure from Washington to grow GM crops, until 2005. In recent days British ministers have admitted that they are under intense pressure from the US and the biotech industry to accept GM products. Such crops have been planted across swaths of American farmland. Britain's environment minister, Michael Meacher, said on Monday that Britain would not be "bounced" into accepting GM crops by the US.

Hendrik Verfaillie, the Belgian chief executive of Monsanto, told the Financial Times the company needed to be more realistic about growth after a warning that profits in 2002 would be a third lower than hoped for. "We are assuming no progress in Europe until 2005. We are trying to be conservative," he said. "It is better to under-promise than under-deliver, I have learned. I don't like earnings revisions, they are painful."

Britain has been running a three-year trial of GM oilseed rape in fields across the country, supplied by Aventis, part of Bayer. The trial, to measure the seed's environmental impact, is part of a deal between the UK government and the industry aimed at trying to reassure the public. But the disclosure last week that trial crops had been contaminated with unauthorised GM seeds carrying antibiotic genes did little to calm campaigners, who now want an immediate halt to the trials. Mr Meacher also admitted that the pilot may not give a true picture of the wider effect on the environment. The decision on whether commercial planting is allowed will be made at the European level, but resistance among some countries, including France and Greece, is fierce. In turn, Washington is threatening a trade war unless companies such as Monsanto can sell GM grain and seed in Europe. The total land under GM cultivation rose from 1.7m hectares in 1996 to 52.6m hectares in 2001. About two-thirds of that was planted with GM soya beans produced by Monsanto to resist herbicides.

The lingering suspicions about GM crops was sharply illustrated recently when Zambia joined other drought-stricken southern Africa states in turning away a shipment of GM maize from the US. The shipment was part of an international emergency relief effort to ease food shortages.

Monsanto is under financial pressure - it recently sought to borrow $1bn but could only raise $600m from the commercial debt markets - and faces falling sales of its traditional herbicide Roundup after the patent expired in the US. Roundup accounts for 45% of Monsanto revenues. The company was weakened further last week when the US drug maker Pharmacia split from Monsanto just two years after buying it.