5/22/1999 KRTBN Knight-Ridder Tribune Business News: St. Louis
Post-Dispatch - Missouri
Copyright © 1999 KRTBN Knight Ridder Tribune Business News;
Source: World Reporter ™
In a flat, fertile field near the fast-flowing Missouri River, Warren Stemme is planting genetically engineered soybeans for the third year in a row.
"I won't say I'm the first in line to try something new, but I'm eager to try something that will help our operation," said Stemme, of Chesterfield, whose beans tolerate Monsanto Co.'s Roundup herbicide. The Roundup Ready beans will cover 250 acres, or half his soybean acreage.
"You can save money on the cost of crop protection, and it gives us more flexibility," said Stemme, who, like many U.S. farmers, is planting bioengineered crops like never before.
Thirty-three percent of U.S. corn acres, 44 percent of the soybean crop and 55 percent of cotton fields this year will be filled with plants that have been altered to fight pests and/or tolerate weedkillers. Monsanto ‘s technology accounts for most of the new crops.
This sharp growth—there were no commercial plantings in 1995 -- shows that U.S. farmers believe biotechnology provides an advantage.
"Today's products offer farmers reduced costs and easier management, and that has fueled the rapid adoption," said Richard Pottorf, chief economist for Doane Agricultural Services Co. of St. Louis.
But behind the growth lurk serious issues that experts say could slow the growth of biotech crops, discouraging fence-sitters from trying the new technology and sending some farmers back to standard seeds and more chemical treatments.
The reason: Protests against biotechnology in Europe have grown well beyond the voices of critics and have spilled into the marketplace.
Some foreign food processors and grocery chains say they won't carry food containing any genetically engineered material. In Britain, for example, food giants Nestle and Unilever say they will avoid foods with any bioengineered ingredients.
Some countries are passing laws requiring the labeling of foods containing bioengineered elements. It can take as long as two years for the 15-nation European Union to approve a genetically altered U.S. crop.
"You need the approval process in Europe to be streamlined," Pottorf said. "As long as consumers are resistant, the European politicians will drag their feet."
Trade relations are starting to fray.
Last month, Dan Glickman, the U.S. Secretary of Agriculture, said that if the EU pursues an "arbitrary and capricious" policy, the United States will complain to the World Trade Organization.
Europe's protests are causing a ripple effect here. As U.S. farmers produce more crops but can't find more markets, economists warn that surpluses will grow and prices will fall. Commodity prices for major crops now hover at frighteningly low levels.
"The export market is a very important part in our life," said Stemme, the Chesterfield farmer, who also has increased his planting of bioengineered corn that repels a major pest. "We have to make sure crops will be accepted globally if we want to market globally."
From what he has seen so far, Stemme doubts that he will cut back on bioengineered crops. "You have to remain flexible in agriculture and go with the flow," said Stemme, more concerned with today's weather than next fall's political climate. "You have to plant what the market wants."
The European backlash has become so serious that farm trade groups, which vigorously support biotech crops, are warning members about the economic and political facts of life.
"This will be a test year for biotechnology," said Scott McFarland, director of industry relations for the National Corn Growers Association. "If we see a two-tier pricing system in the U.S. for genetically modified organisms and non-genetically-modified organisms, you will see a departure from that technology."
Giant Archer Daniels Midland Co., for example, says it will pay extra for a certain type of soybean created through traditional breeding. At its processing plants that produce corn for export, ADM won't take bioengineered corn that hasn't been endorsed by the European Union.
But ADM will accept gene-altered corn at plants that serve domestic markets. Another big processor, A.E. Staley Manufacturing Co., won't accept any corn that hasn't received approval in Europe.
The National Corn Growers Association has launched a "Know Before You Grow" campaign, periodically filling its Internet site with information about which grain processors will accept biotech corn and which types of altered corn have been approved by the EU.
"We have seen growers return their seed because they don't want to take a risk," McFarland said. "The companies have been very cooperative in letting them return the seed."
His group expects U.S. farmers to grow 78 million acres of corn this year, including 25 million acres of genetically engineered crops. About 6 million acres contain biotech corn that hasn't been approved by the EU.
U.S. corn exports to the EU dropped by 96 percent from the 1996-97 season to 1997-98. The EU usually represents 5 percent of American corn exports; now it accounts for less than 1 percent.
Monsanto has established toll-free numbers for farmers, alerting them to U.S. grain elevators that will accept genetically engineered corn for domestic use.
Pointing out that 80 percent of U.S. corn is used domestically and 61 percent is devoted to animal feed, Monsanto has identified 1,500 elevators that will take biotech corn that hasn't been approved by the EU countries.
Meanwhile, the American Soybean Association isn't taking any chances with what it sees as a deteriorating export climate for genetically engineered beans.
For the first time, the ASA is telling farmers to consider segregating bioengineered beans from traditional beans, which is an expensive and time-consuming process.
"We believe there may be niche markets available in the fall because of labeling laws in Europe and some of the Asian countries," said Bob Callanan, an ASA spokesman. "The size of the niche market is a big unknown right now."
He said the ASA isn't discouraging farmers from buying Roundup Ready soybeans, the only bioengineered beans on the market.
"The biggest potential hazard for soybeans is politics," added Kim Nill, the ASA's deputy director of international marketing.
"We are much very pro-biotechnology but we are also very much in favor of respecting laws of other countries," said Nill.
One company, AgrEvo, won't market its biotech soybeans because they don't have EU approval. Its beans are genetically altered to tolerate Liberty herbicide.
The EU, which has approved Roundup Ready beans, is the biggest foreign buyer of American soybeans. The EU accounted for 32 percent, or $2.3 billion, of U.S. soybean exports in 1997.
Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved.
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