By MELODY PETERSEN
WASHINGTON -- American farmers paid premium prices this
spring to sow many of their fields with genetically
engineered corn and soybeans, but now as the fall harvest
nears, more of the international buyers they depend upon
are saying they do not want those crops.
Consumers and food companies in a growing number of
countries are shunning the new crops created by genetic
engineers at such companies as Monsanto, DuPont and
Novartis. Foreign consumers say they do not wish to eat the
new foods like corn that have been altered to produce their
own pesticide, and some companies are reacting quickly to
consumers' desires even though no clear evidence exists
that the crops are unsafe.
This week in Japan, for example, the Kirin Brewery Company
announced that starting in 2001 it would use only corn that
has not been genetically engineered. While bowing to
customers' concerns, Kirin made clear that it did not think
the products were unhealthy. A day later, Kirin's
competitor, Sapporo Breweries, announced that it, too,
would revert to traditional corn, which is an ingredient in
some types of beer.
The biotechnology industry plays down the recent decisions
of some food companies, saying they are overreacting to
threats that aren't real. Most consumers, the industry
says, do not mind these new products.
Until a few months ago, opposition to genetically altered
foods was largely confined to Europe, and trade officials
in the United States have been battling the European Union,
which has stopped buying all American corn. But this
summer, the Clinton Administration's efforts have grown
increasingly urgent, in an attempt to contain the aversion
to these crops that is leaping from continent to continent.
Japan, which now wants mandatory labeling of gene-altered
products, is the largest importer of American crops, and
Mexico, whose top producer of corn flour for tortillas is
avoiding altered grain, is the second largest importer of
American corn.
"This is a very significant trade threat," said Peter
Scher, who directs the agricultural negotiations for the
United States Trade Representative's Office. "The only
thing I can tell farmers is that we are doing everything we
can to sell their products overseas."
About a third of American crops, including soybeans and
corn, are exported. This year, American farmers planted an
estimated 60 million acres (the size of the United Kingdom)
with genetically engineered corn and soybean seeds,
accounting for nearly half of all soybeans in the United
States and about a third of all corn.
Most farmers still expect that they will find a market for
much of this year's corn and soybean crops, industry
officials say. But they have already been told that seven
varieties of gene-altered corn, representing about 5
percent of the expected harvest, will be rejected by corn
exporters. Most of that will be ground into animal feed.
Next year's harvest looms as more troublesome, with public
sentiment changing, foreign markets shrinking and the
agriculture industry struggling to adjust.
For the first time this summer, many corn growers are
dealing with costly new issues.
Local grain elevator operators, who buy and store
wagonloads of corn to sell to the exporters, have begun
asking farmers to separate some types of gene-altered corn
from ordinary corn to appease international buyers.
Dennis Mitchell, a farmer in Houghton, S.D., has been an
enthusiastic producer of gene-altered corn and planted 600
acres this spring, 80 percent of which is a crop altered to
produce a toxin that kills the European corn borer.
He boasts that the new seeds have increased his yield by at
least 15 percent, and he has received assurances from local
elevator operators that he will be able to sell his grain
this year.
But he is paying close attention to the tremors in the
marketplace, especially now that American companies like
Gerber and Heinz baby foods have announced that they will
not use genetically altered corn or soy ingredients. And he
is uncertain what he will do next year when spring planting
season arrives.
"I wish we could get this cleared up," he said. "I
certainly can't raise anything I can't market."
Such uncertainty only adds to the problems of American
farmers, who point out that this year's crop prices are the
lowest in more than a decade.
"This is such a hard time for us, and then you compound
that with this uncertainty," said Gary Goldberg, the chief
executive of the American Corn Growers Association, a group
that has been opposed to some practices of the
biotechnology industry. It represents 14,000 independent
farmers.
"Farmers are going to get caught in the middle," he said.
Clinton Administration officials have repeatedly assured
consumers that all of the genetically engineered crops that
have been approved in the United States are safe for people
to eat. And, indeed, there is no compelling scientific
evidence that shows the foods are unsafe. But the crops are
so new that there is not enough evidence to prove the
foods' safety to a minority of scientists who say further
studies need to be done.
Dan Glickman, the Secretary of Agriculture, said that the
consumers' concerns seemed to be spreading like "an
infectious disease."
"This technology," he said, "got a little bit ahead of the
politics."
He and Federal trade officials have spent the summer
pressing European leaders and agricultural ministers to
reconsider what is essentially the European Union's
moratorium on new types of gene-altered crops. They have
threatened some countries with intercession by the World
Trade Organization, arguing that restrictions on these
foods run counter to the current science supporting their
safety.
Genetic engineering is a process in which scientists splice
one organism's genes into another. For example, scientists
created the pesticide-producing corn by inserting a gene
from a bacterium.
Most of the corn and soybeans have been altered to either
produce their own pesticides or to be resistant to
herbicides. The first gene-altered seeds were offered to
farmers in 1996, and growers snatched them up, quickly
making the new biotechnology into a multibillion-dollar
business for the seed companies.
The biotechnology companies say that the food companies are
caving in to pressure from environmental advocates who have
written letters saying that consumers do not want these
products.
"Consumers are turning away from these foods in enormously
smaller numbers than the activists would have you believe,"
said L. Val Giddings, a vice president for food and
agriculture at the Biotechnology Industry Organization, a
trade group of more than 800 companies in Washington.
Still, farmers and trade officials point to new problems.
In Mexico, which bought $500 million of American corn last
year, Grupo Maseca, the company that is the leading
producer of corn flour, said recently that it would avoid
importing genetically modified grain. The corn flour is
made into tortillas, the Mexican staple.
In South Korea, another large importer of American grain,
corn-processing companies said they were considering buying
corn from China instead of the United States because of
concerns about the gene-altered crop.
And, in Japan, the Government passed a law requiring food
companies to label products that have been genetically
engineered. (In the United States, Federal officials have
only recently said they will consider voluntary labeling.)
Preparing for awareness generated by the labeling in Japan,
a subsidiary of the Honda Motor Company said this week that
it would build a plant in the United States and hire
farmers to supply it only with unaltered, conventional
soybeans. The soybeans, which would be exported back to
Japan, would be made into tofu.
In the United States, where there has been little uproar
over the foods, the baby food makers Gerber and H. J. Heinz
were the first large food companies to reject the new
products. Then Iams, the pet food company, said it would
not buy the seven varieties of gene-altered corn that have
not been approved by European regulators. Iams's
announcement shut down an alternative route that farmers
had for that corn that exporters will not accept.
The agricultural industry has begun responding, with
exporters trying to devise new methods to bridge the
growing gap between farmers and consumers. A two-price
system -- higher prices for conventional crops and lower
prices for genetically-altered crops -- is clearly
developing. For example, this year, the Archer Daniels
Midland Company has been paying some farmers an extra 18
cents for each bushel of non-altered soybeans.
The American Corn Growers Association, which represents
mostly family farms, told its members last week that they
should consider planting only conventional seeds next
spring, unless a host of questions can be answered,
including whether the United States will be able to export
the genetically altered crops.
The National Corn Growers Association, which is about twice
as big as the American Corn Growers Association, and has a
financial partnership with Monsanto and some of the other
agricultural companies, has not followed suit.
Susan Keith, the group's senior director for public policy,
said that the association, which is based in St. Louis, was
keeping farmers informed of what types of genetically
altered corn could be the hardest to sell, but had not
suggested that they consider planting only conventional
seeds.
The worries about international trade have deepened
farmers' fears of a bleaker economic future.
Prices for most crops are the lowest in 10 years, and
farmers say they are concerned that grain prices are
falling even further now that foreign consumers are turning
away from genetically altered crops. But experts say prices
have mostly been affected by the larger harvests in other
countries, which have reduced the demand for grain from the
United States. In addition, the financial crisis in Asia
caused exports to fall last year and prices to drop. And
overproduction of some crops continues to hurt prices.
For now, uncertainty about the next planting season is
bedeviling the nation's farmers. They cannot predict where
the next food backlash will surface and sometimes, even if
they do, it is too late.
"It wasn't until May that farmers got word that Europe had
not approved certain kinds of corn," Goldberg said. "By
then, the corn was in the ground."
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