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Global Acreage of GE Crops Starts to Fall--RAFI

From: Rural Advancement Foundation Intl <rafi@rafi.org>
Date: Thu, 21 Dec 2000
Subject: RAFI Genotypes: GM Seed 2000 Summary

RAFI
Rural Advancement Foundation International
http://www.rafi.org <rafi@rafi.org>
(please visit RAFI's web site for full text version with graphics)

Geno-Types - 21 December 2000

Speed Bump or Blow-Out for GM Seeds?
Stalling Markets, Taco Debacle & Biotech Bail Outs

One week after "biocrats," CSOs and scientists gathered in Montpellier to
hammer out rules for regulating biosafety, a handful of Gene Giants are
fretting over flattening GM (genetically modified) seed sales. Never before
have so many gathered to discuss biosafety for so few. In essence, the $2.5
billion GM seed market is dominated by a single corporation that sells GM
seeds for four major crop commodities (soybeans, maize, cotton, canola) in
three countries (the United States, Argentina and Canada). The GM seed
market represents about 10% of the commercial seed market worldwide.

Today, RAFI releases its annual update on seed industry consolidation. "Seed
Industry Giants: Who Owns Whom?" is now available on RAFI's web site,
http://www.rafi.org (PDF version only)
In addition, RAFI offers the following year-end summary on GM seeds:

The area sown to GM seeds increased spectacularly from1996-2000, but weaker
growth from 1999-2000 indicates that momentum is slowing. Industry analysts
predict that GM seed sales have reached a plateau - and could be flat for
the next few years - a trajectory that is considered potentially fatal for a
new technology. Facing an infectious lack of consumer confidence in GM
foods, the ongoing "taco debacle" (StarLink maize illegally entering the
food supply) and Aventis' recent decision to jettison its agbio assets, it's
no wonder industry has the GM jitters. Is it a speed bump or blow-out for GM
seeds?

Clive James, International Service for the Acquisition of Agri-Biotech
Applications (ISAAA) is RAFI's source for year 2000 provisional estimates on
GM crop area and location.(1) Information on company market share is gleaned
from industry analysts, company websites and telephone interviews.

The Big Picture: According to ISAAA's early estimates, during the 5-year
period 1996 to 2000 the global area of transgenic (genetically modified)
crops increased more than 25-fold, from 1.7 million hectares in 1996 to an
estimated 43 million hectares in 2000. But the area devoted to GM crops
increased at a much slower rate -- an estimated 8% - from 39.9 million
hectares in 1999 to 43 million hectares in 2000, compared to a 44% increase
from 1998 to 1999.

Who sells GM seeds? In a word: Monsanto.
The market for GM seeds is overwhelmingly dominated by Monsanto (now owned
by Pharmacia). In 1999, Monsanto's GM seeds were planted on 34.8 million
hectares (86 million acres) worldwide - approximately 87% of the total area
devoted to GM crops in 1999. Global area devoted to Monsanto's
biotechnology traits increased a whopping 48% - from 23.5 million hectares
in 1998 to 34.8 million hectares in 1999.(2)

Wood Mackenzie, agrochemical industry analysts based in London, estimates
that Monsanto held an 80% market share for agbiotech in 1999. In RAFI's
opinion, Monsanto's true market share for GM seeds is larger; Wood
Mackenzie's estimate includes biotech seeds that are not genetically
modified.1 (Agbiotech market share includes some herbicide tolerant seeds
that are not genetically modified.(3)

AgBiotech Market Share, 1999
Monsanto, 80%
Aventis - 7%
Syngenta - 5%
BASF - 5%
DuPont - 3%
Source: Wood Mackenzie

Where are GM crops grown? Just 3 countries, the US, Canada and Argentina
account for approximately 98% of the area planted in GM seeds in 2000. China
accounted for one percent of the total crop area, and eight other countries
account for the remaining 1%.

>From 1996-2000, the number of countries growing transgenic crops doubled,
increasing from six in 1996 to twelve countries in 2000. But only three
countries, the US, Canada and Argentina, account for 98% of the total GM
crop area worldwide.

Global GM Crop Projections 2000 - Country and Area
(Million Hectares) Change From 1999?

United States 30 + 1.6 million
Argentina 9 + 2.1 million
Canada 3 - 1 million
China 0.5 +0.2 million
South Africa +0.1 n/a
Australia +0.1 n/a
Mexico n/a n/a
Romania n/a n/a
Ukraine n/a n/a
Spain n/a n/a
Germany n/a n/a
France n/a n/a
TOTAL 43 + 3.1 million
(Based on ISAAA's provisional estimates)

What GM crops are being grown? Four crops: soybeans, maize, cotton, and
canola (edible rape) account for virtually 100% of the GM seeds planted in
2000. Almost three-quarters (73%) of the transgenic area in 2000 was
modified for herbicide tolerance; 22% was modified for insect resistance and
5% of the area was devoted to "stacked" traits of herbicide tolerance and
insect resistance. Of the total global crop area (273 million hectares)
devoted to four crops (soybeans, maize, cotton, canola), ISAAA projects that
16% of the total- or 43 million hectares - are transgenic. GM crops account
for 16% of the world's total crop area for four major crops:

Year 2000

GM soybeans accounted for 58% of the area sown to transgenic crops.

GM maize accounted for 12% of the area sown to transgenic crops.

GM cotton accounted for 12% of all transgenic crops.

GM canola accounted for 7% of the area devoted to GM crops.

According to ISAAA's preliminary estimates, GM crops account for:

* 34% of the 72 million hectares of soybean planted globally
* 16% of the 34 million hectares of cotton
* 11% of the 25 million hectares of canola
* 7% of the 140 million hectares of maize

Future Prospects:
Life Industry Doomed or Dormant?
Farmers in North America, where over three-quarters of all GM seeds were
sown in 2000, are now making decisions about what seeds to plant next year.
Their decisions will undoubtedly be influenced by the "Taco Debacle"-- the
GM maize that illegally entered the food supply and is now disrupting grain
markets and causing prices to fall on the international market. The US
government did not approve SarLink maize for human consumption because it
could trigger allergic reactions in some people. Lewis Batchelder of Archer
Daniels Midland recently told the New York Times, "StarLink has definitely
set back the biotech industry, maybe five years."(4)

Farmers are wary, consumers are skeptical, and some segments of the food
industry are retreating from the biotech bandwagon. As a result, most
market analysts conclude that the GM seed market has peaked in 2000 - and we
will see little or negative growth during the next few years. Industry
analyst Sano Shimoda told Chemical & Engineering News that that market for
GM seeds "could bottom in 2001, maybe at the latest in 2002, as the world
sets up rules" in the legal and regulatory arenas. (5)

Wood MacKenzie analysts based in the UK present three scenarios:
1. Existing GM seed markets valued at $2.5 billion today could grow about 6%
per year to just over $3 billion by 2003.
2. If anti-GM sentiments gain momentum, the market will fall to about $2
billion by 2003.
3. If key markets open up in Brazil, India and China, the market will grow
an average 10% per year to nearly $3.5 billion in three years.

For a detailed analysis on the future of biotech and what's in the GM
pipeline, please see RAFI's November/December 2000 Communique entitled,
"Biotech's Generation 3," available on RAFI's web site: http://www.rafi.org

Now available on RAFI's web site:
http://www.rafi.org

The Seed Giants: Who Owns Whom?
December, 2000 Update
___________________________

NOTES:

1 Clive James, International Service for the Acquisition of Agri-Biotech
Applications. Provisional estimates were taken from a presentation made by
Clive James at the World Food http://www.isaaa.org

2 Source: Monsanto Press Release, "Monsanto Reports 1999 Fourth-Quarter And
Full-Year Results," St. Louis, Feb.10, 2000.

3 Personal communication with Richard Leech, Wood Mackenzie, December 18,
2000. Wood Mackenzie will release a global review and forecast on GM seeds
in January 2001 entitled, "Seeding Growth." For more information:
http://www.woodmac.com

4 Barboza, David, "Gene-Altered Corn Changes Dynamics of Grain Industry,"
New York Times, December 11, 2000, p. 20.

5 Thayer, A. "Accepting Biotech," Chemical & Engineering News, October 2,
2000, p. 25.

RAFI (the Rural Advancement Foundation International) is an international
civil society organization based in Canada. RAFI is dedicated to the
conservation and sustainable use of biodiversity, and to the socially
responsible development of technologies useful to rural societies. RAFI is
concerned about the loss of agricultural biodiversity, and the impact of
intellectual property on farmers and food security.

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