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Franken foods genetically modified

Has the Frankenfoods Bubble Burst?
John Vidal
Tuesday August 28, 2001
The Guardian

The global GM food bubble may have burst after almost 10 years of
exponential growth. Companies are investing less in research than five years
ago, profits are static, countries are tightening up labelling and import
laws, the promised new generation of crops which could bring health benefits
is still years away, and no major new markets are expected to develop for
some time.

Paradoxically, Guardian research has also found that the acreage of GM crops
is still growing in the US and, at more than 109m acres now across the
world, is 25 times what it was five years ago. The industry, moreover, has
now convinced almost all governments and world bodies to back the bitterly
disputed technology.

But Sergey Vasnetsov, Wall Street's 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.

"Acceptability will only come with new products but that seems to be
something the industry cannot achieve. The crops that will benefit people
[as opposed to farmers] are still three or four years away. The market is
not expanding and research budgets are down 5-7% on five years ago.
Conceptually, the value [of GM foods] has come down," says Mr Vasnetsov.

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. The world market is reducing in terms of
delivery.

Scathing

But the GM food companies are confident they can overcome regulatory hurdles
and global opinion. World leader Monsanto, whose seeds were planted on more
than 80m acres last year - but which has had to slash costs, cut back on
research and fire almost 700 people - is conducting field trials in many
developing countries and reported an 11% increase on acreage. The global GM
acreage is thought to be 17% higher than in 2000. Most of the new plantings,
however, have been in north America.

Mr Vasnetsov is scathing of the claims made by the UN, 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.

Greenpeace's Benedict 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, after 10 years of plantings, 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 for the development of the crops. EU draft laws announced last month
would allow imports with 1% contamination of conventional crops by GM
organisms, but while allowing new GM crops to be grown, they could increase
to up to three miles the buffer zone between them and conventional ones
which could put most farmers off. The companies are expected to lobby to
relax the limits.

US growers and government fear that their £30bn food export industry is
being undermined as countries try to substitute their exports for those of
the US. Despite the objections of the US government and lobbyists, many
countries are now trying to turn the screw on US agriculture by increasing
regulatory pressure.

Thailand, the world's largest rice exporter, is bringing in strict laws on
labelling and traceability; Algeria, a large food importer, may ban
completely their import, manufacture or sale; Japan, which takes 20% of all
US food exports worth $11bn a year, has imposed tough labelling rules on 24
product categories and new Chinese laws may delay GM maize for several
years. 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.

Wariness

The US government and farm organisations admit that GM has severely hit
exports. Europe, Japan, Taiwan and South Korea have largely switched to
buying 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 are
leading some European biotech and seed companies to shift their research to
north America. "We won't be carrying out any more field trials in Germany
for this year," said seed company Norddeutsche Pflanzenzucht (NPZ).

The companies say farmers are happy with the performance and profitability
of the crops, but the global wariness has prompted even biotech supporters
to question GM. 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 growing the crops may have peaked in Europe, consumer
support is waning in the US. An ABC poll in June found 52% saying GM foods
were "not safe to eat," and only 35% expressing total confidence. A year
earlier, a Gallup poll found the reverse, with 51% seeing no health hazard.

The hoped-for "ethical" GM crops which have been promoted by governments and
scientists are also 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 the benefit of people in developing
countries, 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 the test plantings to stop, fearing GM wheat will damage
exports.

In the past month, the UN has claimed 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.

Testing times - 25,000 trials in 40 countries

€The genetic modification of plants involves transferring DNA from a plant,
bacterium, or even an animal, into a different plant species

€ The four main GM crops are corn (maize), cotton, soya bean and canola

€ More than 109m acres of GM crops are grown worldwide

€ The main planting areas are in the US, Canada, Argentina and China

€ Since 1985, when genetically engineered plants resistant to insects,
viruses, and bacteria were first tested, 25,000 trials have been carried out
in more than 40 countries

€ In 1995 the EU approved the importation and use of genetically modified
soya

€ The UN development programme, and all major national scientific bodies,
believe GM crops can benefit farmers and consumers

€ This year more than 30 test sites have been wholly or partly destroyed in
Britain

€ Apart from all major crops, tests have been done on most vegetables, as
well as trees and fish.

The four types of GM crops

€ Bt crops: Protected against insect damage and reduce pesticide use. Plants
produce a protein - toxic only to certain insects - found in the common soil
bacterium bacillus thuringiensis, or Bt

€ Herbicide tolerant: Allow farmers to control weeds without harm to the
crop

€ Disease-resistant: Armed against destructive viral plant diseases with a
"vaccine"

€ Nutritionally enhanced: Foods that could offer higher levels of nutrients
and vitamins

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