Howdy, all--
Thought this might interest some of you.
peace
misha
>HOLD FOR RELEASE
>THURSDAY, FEBRUARY 17, 2000
>12:00 PM EST
>
>Worldwatch News Brief 00-01
>
>PORTRAIT OF AN INDUSTRY IN TROUBLE
>by Brian Halweil
>
>After four years of stupendous growth, farmers are expected to reduce their
>planting of genetically engineered seeds by as much as 25 percent in 2000, as
>spreading public resistance staggers the once high-flying biotech
>industry. (See
>Figure 1.) Stock prices for agricultural biotech companies are falling,
>exports
>of transgenic crops are tumbling, and questions are mounting about the
>liability
>for what is turning into a major debacle for farmers. At the same time,
>some 130
>nations just signed an international biosafety agreement prescribing caution.
>
>Worldwide, the area planted to transgenic crops jumped more than
>twenty-fold in
>the last four seasons, from 2 million hectares in 1996 to nearly 40 million
>hectares in 1999. In the United States, Argentina, and Canada, over half the
>acreage for major commodities like soybeans, corn, and canola are planted in
>transgenics. (These three nations account for 99 percent of the global
>transgenic acreage, pointing to the limited global acceptance.)
>
>But with a growing number of food manufacturers and grocery chains in Europe
>taking products containing transgenics off the shelves, the market for these
>crops has been shrinking. American exports of soybeans to the European Union
>plummeted from 11 million tons in 1998 to 6 million tons last year, while
>American corn shipped to Europe dropped from 2 million tons in 1998 to 137,000
>tons last year: a combined loss of nearly one billion dollars in sales for
>American agriculture.
>
>Investors have reacted harshly to the growing consumer rejection of
>transgenics
>and the resulting reduced sales of engineered seed and complementary
>agrochemicals. In May of 1999, Europe's largest bank, Deutsche Bank,
>recommended
>that investors sell all holdings in companies involved in genetic engineering,
>declaring that "GMO's [Genetically Modified Organisms] Are Dead." The bank's
>report envisioned the development of a two-tiered
>commodity market in which non-transgenic crops would command price
>premiums over
>transgenic crops-a prospect that threatens the farmers planting engineered
>seeds
>and the companies that sell these seeds.
>
>In fact, top commodity handlers, such as Archer Daniels Midland and A.E.
>Staley,
>have already begun to discount transgenic crops because of this greater
>financial risk. Commodity traders have followed suit fearing the loss of
>export
>markets as Japan, South Korea, Australia, Mexico, the members of the European
>Union, and other nations draft laws requiring mandatory labeling of food
>products containing transgenic ingredients.
>
>Most major food companies have already announced that they will avoid
>transgenic
>ingredients in their products for the European market. But now recent surveys
>indicate that consumer tastes are souring on the other side of the Atlantic as
>well. Several food manufacturers, including Gerber, Frito-Lay, and natural
>food
>retailers Wild Oats and Whole Foods, have said that they will avoid transgenic
>ingredients in their products sold in the United States-the largest consumer
>market for transgenic crops. If more American manufacturers hop on the
>bandwagon, the drop in demand would be devastating for transgenic growers and
>seed producers.
>
>Share prices for biotech seed companies that were Wall Street's darlings a few
>years ago are sinking towards all-time lows. Investors in Monsanto
>Company, the
>industry leader which has born the brunt of public criticism, have watched the
>corporation's share price lose nearly
>one-third of its value in the last year, falling from a high of $50 in
>February
>of 1999 to a recent low of just $35. (See Figure 2.)
>
>Brokerage houses have been advising major players in the biotech industry to
>spin off their ailing agricultural divisions. Novartis and AstraZeneca both
>followed this advice in December of
>1999. Dupont had been considering issuing a new stock that would track its
>much-celebrated and nascent ag biotech division, but decided in early 2000 to
>indefinitely postpone the stock's release. And struggling to recoup nearly $8
>billion in seed company and agricultural biotechnology investments, Monsanto
>merged with pharmaceutical and chemical giant Pharmacia Upjohn at the end of
>1999. The new firm quickly decided to turn Monsanto's agricultural unit into a
>separate company.
>
>Further complicating the financial picture are concerns about uninsured
>liabilities for farmers and agribusiness companies. In November 1999, 30 farm
>groups, including the National Family Farm Coalition and the American Corn
>Growers Association, warned American farmers that "inadequate testing of
>gene-altered seeds could make farmers vulnerable to 'massive liability'
>from damage caused by genetic drift-the spreading of biologically modified
>pollens-and other environmental effects." In December, a group of high-profile
>lawyers filed a class-action lawsuit against Monsanto, on behalf of
>American soy
>farmers, charging that the company has not conducted adequate safety
>testing of
>engineered crops prior to release and that the company has tried to monopolize
>the American seed industry.
>
>To many observers, the rapid release of transgenic crops and the ensuing
>financial disarray is disturbingly reminiscent of the earlier uncritical
>bandwagons for nuclear energy and chemical pollutants like DDT. A
>combination of
>public opposition and financial liability eventually forced retrenchment of
>these earlier technologies, after their effects on the environment and human
>health proved to be far more complex, diffuse, and lingering than the promises
>that accompanied their rapid commercialization.
>
>In an effort to avoid this same dismal cycle with the introduction of each new
>"revolutionary" technology, public policy advocates have called for the
>adoption
>of the precautionary principle. Under current policy, a technology is all too
>often judged safe until it is definitively proven harmful. The precautionary
>principle holds that when a new technology carries suspected harm, scientific
>uncertainty of the scope and scale of the harm should not necessarily prevent
>precautionary action. Instead of requiring critics to prove that the
>technology
>poses potential dangers, the producers of a technology shoulder the burden of
>presenting evidence that the technology is safe.
>
>Industry has long labeled the precautionary approach as reactionary, arguing
>that it stifles research and prevents economic progress. On the contrary,
>advocates realize that all stakeholders-including consumers, government, and
>industry-benefit from an open and democratic attempt to anticipate any
>undesirable social and financial surprises. The goal is to apply wisdom and
>judgement about the potential effects of a new technology before flooding the
>marketplace with the products of that technology.
>
>The rapid rollout of genetically engineered crops over the last four years
>stands the precautionary principle on its head. Widespread
>commercialization of
>transgenic crops has come before-not after-any thorough examination of the
>benefits and risks associated with these crops. The regulatory framework
>devoted
>to transgenics is inadequate, nontransparent, or completely absent. And there
>has been essentially no public discussion about the many potential
>consequences
>of large-scale planting of transgenic crops. For example, U.S. Secretary of
>Agriculture Dan Glickman only recently called for studies assessing the
>long-term ecological effects of these crops. But more than half of the U.S.
>soybean crop and nearly as much of the corn crop are already genetically
>engineered.
>
>Another recent illustration of our lack of precaution was presented in a
>December 1999 article in Nature reporting that the insecticide produced by a
>widely planted variety of transgenic corn can accumulate-in its active form-in
>the soil for extended periods of time. The authors note that the effects
>on soil
>organisms and soil fertility are largely unknown, but potentially
>enormous. But,
>like earlier laboratory studies showing that pollen from this same corn
>could be
>lethal to certain beneficial insects, the fact that such effects had not been
>considered prior to planting tens of millions of hectares in this crop raises
>concerns about the adequacy of existing safeguards for ecological and human
>health risks.
>
>-END-
>
>
>
>Brian Halweil is a Staff Researcher with the Worldwatch Institute, a
>Washington,
>DC-based research organization.
>
>
>CONTACT INFORMATION FOR JOURNALISTS:
>
>Brian Halweil, 202-452-1992 x 538, <halweil@worldwatch.org>
>Mary Caron, Press Director, 202-452-1992 x 527, <mcaron@worldwatch.org>
>
>Also, visit the Worldwatch website at <www.worldwatch.org>.
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