December, 1999
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Biotech foods: second thoughts

December 19
Los Angeles Times editorial

Americans are having second thoughts about genetically modified food after years of paying little attention while consumers in Europe were in hysterics.

Since the early 1990s, genetically modified grains and vegetables have turned up on produce shelves and as ingredients in processed food. But that's changing as consumers, legislators and even federal regulators begin to raise questions about the safety of biotech food and about farmers' problems caused by genetically modified seeds.

The industry hopes to ward off regulatory action with more lobbying; that's a mistake. The questions about what has become known as GM food must be answered, not shoved aside. As in Europe, many U.S. consumers have now become jumpy about food with altered genes. They raise reasonable questions about the unknown risks, the unintended consequences or the long-term effects of genetic engineering--from the potential escape of modified traits into wild species to the effect on infants of eating plants that produce their own pesticides to mutations producing harmful side effects.

Others demand clear labeling simply because they want to have a choice.

U.S. government safety and environmental agencies say that test after test has found the food safe to grow and eat. But caveats are beginning to multiply. Agriculture Secretary Dan Glickman, whose department has admitted that the tests are fine as far as they go, said "there are many more questions that haven't been thought of, much less answered." The Food and Drug Administration was sure back in 1992 that no labeling of

GM food was needed. Last month, it held a series of hearings around the country to take a closer look. Glickman now concedes that some kind of consumer labeling of GM food might be inevitable.

Monsanto and other leading producers of GM seeds are also under assault in the courts. A handful of farmers filed a class-action suit Dec. 14, claiming that the plaintiffs were defrauded by safety claims on GM seeds. The companies were also accused of illegally controlling the supply of the seeds.

Litigation is hardly the best forum for the determination of scientific issues. Moreover, most farmers like the souped-up corn or soybeans and do not consider themselves to be Monsanto's dupes. But the lawsuit sends a clear signal to the industry that the opposition to the new technology must be taken seriously.

The industry, instead of fighting its ultimate customers, should concentrate on trying to build public confidence in the new technology.

Biotech backer brings foes together

December 19
St. Louis Post-Dispatch

WASHINGTON - For a big-time backer of biotechnology, Gordon Conway's approach sometimes seems curious. Conway, president of the $3.5 billion Rockefeller Foundation, will lecture industry leaders on what he regards as their shortcomings and then irritate them by issuing a press release.

He raised a few eyebrows again last week when he won approval from his board of directors to spend $3 million to promote a global discussion of issues surrounding genetically modified food.

Chunks of that money already have a home: $200,000 to the Hastings Center in New York to look at ethical issues in the debate; $150,000 to the Colorado-based Meridian Institute to bring together people with different views for "constructive engagement."

Another $150,000 grant reinforces Conway's reputation for independent thinking: It will go to the Consumer Federation of America, whose support of mandatory labeling of genetic foods runs counter to the staunch opposition to labeling by the food industry and biotechnology companies. 

More advocacy groups are lining up for Rockefeller money next year, and agribusiness interests might not like who gets it. Conway doesn't care.

As he sees it, the debate over biotechnology has gone astray in several ways, one of them by excluding the poor people of the world and scientists in developing countries. In the public's mind, he says, monumental issues about food and science are reduced to a "Monsanto vs. Greenpeace" debate.

"The problem at the moment is that this debate lurches from one extreme to another," he said. "The dominant voices are the multinational companies on one hand and the northern environmentalists on the other.

"We are very keen on a range of dialogues which bring everybody together to discuss the various issues. What we want is a coming together for a defining of what the problems are, and then an effort to work through these problems."

Widening debates

The gulf between anti-genetic food activists and the companies and scientists bringing the world this powerful new technology has carried on in noisy ways at year's end. For Conway, the challenge may be bringing the parties together before their views become too entrenched. 

The tens of thousands of protesters who helped scuttle the recent World Trade Organization talks in Seattle included a potent anti-biotechnology force. Food and Drug Administration hearings in Oakland, Calif., last week featured starkly divergent opinions inside and hundreds of protesters in the streets.

Looking back on the three meetings, James Maryanski, the FDA's strategic manager for biotechnology, said, "There's certainly a lot of interest and a lot of strongly held views out there right now."

The debate is likely to intensify. In Montreal at the U.N. Biosafety negotiations next month, Europe and developing countries will pressure the United States, Canada and a handful of allies to adopt global rules that could impede trade in modified food.

Meanwhile, in Congress, the engagement is taking shape over legislation to impose mandatory labeling on genetically modified foods. Such a bill would seem to have little chance of passage. But even considering it will bring Congress into the widening discussions.

To hear biotech critic Jeremy Rifkin tell it, the opposition to genetically modified food has entered the realm of a new global populism that is beyond the grasp of the Rockefeller Foundation or just about anyone else. Rifkin and a cadre of farmers engineered yet another venue for the debate when they sued Monsanto Co. last week in U.S. District Court on antitrust and other grounds.

"This isn't a question of mediation. This isn't a question of how do we all come together on the same page," Rifkin said. "There are different opinions about the future of agriculture here. There are different perceptions about how to use this new science in the marketplace and in society." Conway's influence

If anyone can corral this Hydra-headed debate, it might be Gordon Conway. Working for 30 years on development projects in Africa and Asia, Conway, a British agricultural ecologist, made headway in developing biological controls to fight insects.

He operated against the grain then, too, when the general thinking in agriculture sectors held that chemical pesticides were the only way to protect crops. 

With those solid environmental credentials, Conway, 61, now heads the Rockefeller Foundation, one of the nation's most prestigious philanthropies and one that has invested $100 million in developing genetically engineered rice.

He is resolute in his belief that biotechnology can increase crop yields in needy countries and do so without poisoning the land with chemicals. During an interview last week, he referred to studies showing that China had reduced its applications of insecticides on cotton fields from 12 to three per season by using seeds modified to resist pests. 

"I want to see that in food," he said. 

Conway is a man people listen to. In June, he chided Monsanto's board of directors for failing to address international concerns about controversial "Terminator" gene technology, which renders seeds sterile so as to prevent farmers using them for free. Later, when Monsanto announced it was abandoning the technology, it did so in a letter to Conway.

Monsanto apparently listened to Conway even though company officials were irked that he had put out a press release regarding the closed-door meeting.

Conway's influence will be tested in his drive to persuade the industry to embrace the labeling of genetically modified foods.

"It's a public information issue," he said last week. "If the public wants to know about something in their food, then they have the right to know. It's as simple as that. If you pick up a can of Coke, you can read about many of the things that are in it."

Monsanto may be on the verge of disregarding another piece of Conway's advice. When he met with the Monsanto board, Conway cautioned against what he referred to as "a new offensive by a PR agency."

Since then, Monsanto hired the Burson-Marsteller public-relations firm and has been considering an advertising campaign. Some company officials believe that it is important to respond to its critics, who have been taking out full-page ads in leading newspapers.

Monsanto spokeswoman Lori Fisher said, "There's a whole variety of communications programs under consideration, of which an advertising campaign might be one."

Fisher said that Monsanto looked forward to hearing more about Conway's global dialogue.

"Given the fact that Monsanto has been quite public in the last several months about wanting to engage a variety of people . . . this seems to be an appropriate thing for the Rockefeller Foundation to be doing," she said.

But the Grocery Manufacturers Association's Gene Grabowski said he believes that the Rockefeller money could work to derail biotechnology if recipients succeeded in their fight for labeling.

"I think the money is being spent with best intentions," he said. "But it's pretty clear that the anti-biotech people see labeling as a way to kill the technology."

Val Giddings, a strategist for the Biotechnology Industrial Organization, said of the Conway-inspired effort that he is "delighted to see them entering the fray. I think they are concerned about the potential disastrous impacts of the activists' hysteria."

As Conway sees it, the industry also must assume blame for a debate that has been so unenlightened that it threatens biotechnology's future. He does not believe, like some doomsayers, that biotechnology will go the way of nuclear power and founder because of intractable concerns by segments of the public.

"It's very muddled," he said, referring to biotechnology's future. "My sense is that it will survive in a way that is more cautious, more thoughtful and much more focused on real benefits."

Biotech companies running into trouble: Fears about altered genes in food put profits in jeopardy

December 19
Deseret News (Utah)

Consumer fears about genetically altered foods are jeopardizing the profits of companies involved in agricultural biotechnology.

The European Union has restricted the import of most genetically modified organism crops and will require foods with GMO ingredients to be labeled, as have several other countries.

The key issue isn't whether these crops are really safe. A lot of the uproar in Europe is a thinly veiled political gambit to block food imports from the United States to protect European farmers. Moreover, bioengineering just speeds up the crossbreeding for desirable traits that farmers have done since the dawn of agriculture.

What investors need to know is that science has gotten way ahead of marketing, by developing products for which there are presently too few buyers. In this environment, perceptions are as important as facts, and being on the wrong side of public perception is a serious business blunder.

A small but rising number of companies are ruling out the use of GMO crops in their production: European giants Nestle and Unilever, Japanese breweries Kirin and Sapporo, and Gerber (a division of Novartis, the European pharmaceuticals company that is itself a producer of bioengineered crops), based in the United States, and H.J. Heinz baby-food brands.

This trend, say analysts, is a reflection of consumer pressure for more natural, unadulterated foods. How can you know whether a food has been genetically altered? Farmers and grain processors participate in a sort of honor system. But there's intense demand for tests that would distinguish altered from unaltered grain.

Enter Strategic Diagnostics (SDIX, NASDAQ, $7), a small company run from Newark, Del. It has perfected simple, quick and portable tests to determine whether a seed or plant stock shows particular genetic traits. The kits look for antibodies to determine whether sample grain contains genetically modified DNA, as opposed to testing the DNA itself.

As a result, the tests can be performed by just about anyone under practically any conditions and within about ten minutes. That compares with anywhere from eight hours to three days for laboratory-based DNA tests.

Companies that bioengineer seeds, fertilizers and pesticides are not a total lost cause. But until the whole GMO debate is resolved, consider the Monsantos, DuPonts and other bioag pioneers on the merits of their ongoing business in traditional fields. For now, their agricultural initiatives are mere seedlings.

Farmers suspicious of modified crops

December 19
UPI

Opposition to the use of genetically modified crops in food supplies seems to be having an effect on U.S. farmers.

How much effect that opposition will have on plantings will depend on what happens in Asia, said Richard Feltes, vice president and director of commodity research for Chicago-based Refco Inc. He spoke recently to 50 grain traders, grain elevator operators, farmers and representatives of food processing companies at a private briefing held by the Minneapolis Grain Exchange.

While Europe has made the most noise about such crops, Japan and other Asian nations are the biggest buyers of grain exports from the United States, Feltes noted. But regardless of the Asian response, he said, Midwest farmers will be cutting back on plantings of those modified crops, despite the higher yields they got this year from such seeds. 

While some grocery chains and food processing companies have refused to acknowledge demands that they sell only foods that have not been genetically modified, Feltes said, other companies and even whole industries are paying attention to the protests from consumer and environmental organizations.

Processors who make syrup for sweetening soft drinks made inquiries in Chicago markets recently about buying corn that would permit them to label cans or bottles of soda GMO-free, he said.

"Nobody has put this on the can yet," he added, "but the first one that does will force others to do the same thing." He said such questions weren't being asked a year ago.

Refco clients have begun to opt for non-genetically modified seeds because "nobody wants to get stuck with corn and soybeans that may be discounted when they move into future markets," he said.

Not all farmers are concerned about the possibility of product labeling, of course. The executive committee of the United Soybean Board has adopted a position advocating "responsible development of plant biotechnology in a way that provides long-term benefits to consumers, producers and the environment."

The board, which runs the soybean check-off program supporting marketing efforts, estimates 50 percent or more of the soybeans grown in the United States this year were varieties improved by biotechnology.

An Iowa State University study has shown that Midwest farmers who planted Bt corn from 1996 to 1998 reduced their insecticide usage each year. Bt corn is genetically engineered to produce a protein toxic to some insects, including the European corn borer. The insects die after feeding on Bt corn leaves or stalks.

Of the 75 million acres planted to corn in the Midwest in 1998, 22 million acres were Bt corn, according to Marlin Rice, an Iowa State University entomologist.

"I believe it is important to put some balance into this argument," Rice said. "There are some environmental benefits to be gained from this technology. It's not all negative about genetic engineering -- this is on the positive side."

Opponents of crop engineering call the products "Frankenstein food" and demand the Food and Drug Administration make safety trials mandatory and order that labels indicate whether foods contain any modified ingredients..

"The FDA seems more interested in promoting biotechnology than scrutinizing it," said Charles Margulis, a spokesman for Greenpeace. The opponents say food labels would allow consumers to decide for themselves whether to eat the modified foods.

The FDA finished up a round of hearings on the issue Dec. 13.

US, EU agree on two-track approach for GMO talks

December 18
Reuters

The United States and the European Union on Friday fleshed out plans for talks on genetically modified crops and other advances in food science that a growing number of consumers view with suspicion.

EU Trade Commissioner Pascal Lamy told reporters the two sides had agreed on a ``double framework'' for the biotechnology discussions, which were first proposed earlier this fall.

A senior-level group of regulatory officials will focus on issues such as the approval of new genetically modified crop varieties and labeling requirements for food containing genetically modified ingredients.

A second group, made up of ``senior wise personalities'' from both sides of the Atlantic would address the issue ``in more cultural terms,'' Lamy said at a press conference following an U.S.-EU summit meeting. 

U.S. and EU officials hope to meet in January to get the new two-pronged approach rolling.

U.S. farmers planted genetically modified corn, soybean and cotton varieties on more than 60 million acres (24 million hectares) in 1999.

Although U.S. regulators say the crops are safe, that has failed to impress many European consumers who remain concerned about possible health and environmental affects.

Reflecting those concerns, the EU has not approved any new genetically modified varieties for more than 18 months.

That has blocked U.S. corn sales to Europe, which had averaged more than 1.5 million tons annually, because of the fear a cargo containing unauthorized grain could be rejected.

At the grower level, the controversy has forced U.S. farmers to decide whether to plant genetically modified varieties next spring or switch back to traditional seed.

Alan Larson, Under Secretary of State for Economic, Business and Agricultural Affairs, said the United States was anxious for the EU to bring more clarity and predictability to its approval process for genetically modified crops.

``Obviously we're very concerned about market access. We have farmers who have to make decisions in the next month or so about what sort of seed they're going to buy to plant next spring,'' Larson said.

While the regulators focus on technical issues, the second group will draw on experts from a variety of fields to examine other dimensions of the controversy surrounding biotechnology, Larson said.

The agenda for that group could include social, ethical and religious concerns, he added.

Controversy of the year: GM foods under attack

December 17
Science magazine

The debate over genetically modified (GM) foods exploded in 1999, becoming a worldwide public relations disaster for the biotech industry and casting science in the role of villain. Although most fiery in the United Kingdom, where headlines warned of "the horrors of GM foods" and "the mad forces of genetic darkness," the public fervor spread through Europe, leading the European Union to suspend the introduction of new GM crops pending new legislation, which could be 3 years away (Science, 26 November, pp. 1662-1668).

The effects even reverberated in the United States, where the GM revolution had been proceeding all but silently. U.S. farmers, who planted roughly half of their corn, cotton, and soy fields with transgenic crops this year, watched with dismay as their export markets shrank. And at recent public hearings organized by the Food and Drug Administration, many speakers voiced concerns that the crops--often tailored to resist insects or herbicides--might be hazardous to human health or could cross-pollinate with wild plants and create "superweeds."

This eruption of public feeling was fueled by a few critical studies published this year. One showed, for example, that monarch butterfly caterpillars in the lab died when fed transgenic pollen containing Bt, a bacterial insecticide. Another reported that rats' gut linings were somewhat swollen after the animals ate transgenic potatoes. But such work was preliminary and controversial--it's not clear yet how much Bt caterpillars would eat in the wild, and Britain's Royal Society called the potato study "deeply flawed."

Critics have pointed out that the lack of good data works both ways--there's no clear evidence that transgenic crops are totally innocuous. But this year's turbulence seems to have stemmed less from data and more from the public's knee-jerk reaction to moving genes from one species to another, a fear sometimes compounded by peculiar political circumstances. In Great Britain, for example, public trust in food safety laws had been eroded by the government's attempts to play down the mad cow disease crisis in the early '90s. British biotech opponents also happen to have a prominent organic farmer on their side: the Prince of Wales, who once likened tinkering with genes to playing God. Resistance may have been further inflamed by unspoken resentment against big corporations, perhaps with a pinch of anti-Americanism; that might explain why U.S. biotech giant Monsanto was a favored target, and why French farmers directed their anger at local McDonald's.

Whatever the causes, the power of protest groups is a fact of life that agricultural biotech firms are slowly learning to deal with. Meanwhile, they hope resistance will fade within a few years, as new GM fruits and vegetables with extra vitamins or antioxidants tempt consumers. The new wave could be a real boon for developing countries. Rice with added vitamin A and iron could help prevent blindness and anemia in millions, for example. 

But attitudes toward GM foods will have to thaw considerably before such benefits materialize. It may take years before we know whether the 1999 backlash was a mere ripple in the introduction of biotech crops--or whether millions of consumers have renounced them for good.

Public misinformed on genetically modified foods

December 17
New York Times business column by Floyd Norris 

Consider the possibilities of a scientific breakthrough that could allow farmers to grow more food while using less pesticide, or to add vitamins to vegetable oils to prevent malnutrition. Maybe some plastic products now made from petroleum could instead be produced from plants.

Would the stock prices of companies developing such products soar to Internet-style heights? Would the scientists be viewed as potential saviors in a world where hunger and malnutrition are realities for many millions, and where pollution from oil refineries remains a problem? 

The answer to both questions is no.

Seldom in human history has a technology with such exciting possibilities seemed less popular than genetic modification of foods -- a k a "Frankenstein foods" in the British tabloids -- is today. Wall Street is leery, and now class-action lawyers have leaped in with a double-barreled suit accusing Monsanto, the leading company in the field, of trying to monopolize a business the lawyers say relies on foisting possibly dangerous foods on the public.

The way things are going, Monsanto executives who want to avoid being harassed at cocktail parties and on airplanes may take to lying about what they do. Perhaps they'd do better if they claimed to be from Philip Morris. 

How did we get to this point? One answer is that the industry's lobbyists were too successful. They persuaded the Food and Drug Administration that genetic modification -- which involves inserting a gene into a plant -- was not very different from the old way of breeding plants, and that the corn or soybeans were equally nutritious. So there was no need to call attention to it on labels.

But because there was no need to reassure consumers, there was also no need to educate them. The marketing efforts focused on farmers and, as it happened, the early products did more for farmers, with higher crop yields and resistance to pests, than for consumers, in terms of improved nutrition. Farmers embraced the technology.

Then the resistance arose, largely in Europe. Who can be absolutely certain that these products will not have some bad effect on animals, or plants or the environment? Ask the question that way, and the answer is that no one can. Ask whether the evidently small risks offset the potential gains -- in nutrition and in reducing pesticide use, among others -- and you might get a different answer.

Now European fears are being exported to an American public that knows virtually nothing about the subject -- and is hearing about it from people warning of dangers. Farmers are getting nervous about planting the seeds. 

Wall Street, meanwhile, is putting pressure on Monsanto to spin off its Searle pharmaceuticals business. James Wilbur, an analyst at Salomon Smith Barney, figures that an independent Searle would be worth about $38 a share. You can buy Searle, with the rest of Monsanto thrown in, for less than $41 a share, which gives you some idea just how happy investors are about agribusiness these days. Since the end of 1997, the Standard & Poor's 500-stock index is up 46 percent, while Monsanto is down 4 percent.

It would have been better if Monsanto and its competitors had insisted on -- rather than resisted -- putting labels on genetically modified products. Perhaps they could have portrayed the labels as indicating a superior product with environmental benefits. Instead, they left the public education to the industry's foes. In persuading regulators that no labels were needed, the lobbyists won a Pyrrhic victory.

Justice Department probes Monsanto's gene-licensing pacts

December 16
Dow Jones

The Justice Department is investigating the gene-technology licensing agreements of Monsanto Corp., looking for evidence of any effort to control the price of seeds the agribusiness giant sells to farmers.

According to people close to the matter, the investigation stems from the government's lengthy review of Monsanto's (MTC, news, msgs) proposed $1.8 billion buyout of Scott, Miss.-based cottonseed producer Delta & Pine Land Co. (DLP, news, msgs) and an ongoing review of the rapid consolidation of the seed-growing industry.

A Justice Department spokeswoman confirmed part of the probe, but declined to provide details on the matter or confirm the broader investigation. "We are investigating the Delta & Pine acquisition and related matters in the cottonseed industry," said Jennifer Rose.

Jeff Bergau, a Monsanto spokesman, also confirmed the Justice Department probe but said the agency is focusing exclusively on the cottonseed market. "To the best of our knowledge," he said, "Justice is focusing exclusively on the Delta & Pine merger and the cottonseed market." 

He also noted that the company has understood - throughout the merger review process - that intellectual property and licensing issues would be included in negotiations with federal regulators for approval of deal. 

People close to the matter said that the current review is focusing primarily on the cottonseed market and that Justice Department attorneys are firm on their demands that Monsanto enter into a binding consent decree that would force them to license their technology at low cost to rival seed producers.

Federal regulators have been looking into consolidation trends and any potential efforts to monopolize the specialized genetically manufactured seed industry for a number of years now.

In July 1996, Justice officials served Delta & Pine with an order seeking all documents and any information related to its acquisition of three seed companies as it firmed its 70% market control of the cottonseed market, according to company documents. In that investigation, which is continuing, Justice is looking into whether the combinations violated Section 7 of the Clayton Act. Federal antitrust rules prohibit any horizontal or vertical merger that may substantially lessen competition or tend to create a monopoly.

Justice took depositions of a number of Delta & Pine executives in 1997, but hasn't yet closed the probe. In regulatory filings, the company has said it "is committed to full cooperation" with the government in its investigation.

Federal regulators began looking into the Monsanto-Delta & Pine combination nearly two years ago as part of the normal regulatory clearance process for the acquisition. After asking for more documents related to the merger earlier in the year, Justice attorneys took the unusual step Aug. 9 of filing a third Civil Investigative Demand - or CID - related to the deal.

In the third information request related to the merger, federal antitrust experts began looking into the possibility that the combination was part of an effort to corner the market for certain types of seeds, according to people close to the matter.

Now, Justice officials are also concentrating on any arrangements Monsanto may have in its licensing agreements that could result in weakening competition, the people familiar with the matter said.

Justice lawyers have been looking into some of the same allegations that are included in a private suit filed earlier this week. The agribusiness giant was hit with a purported class-action lawsuit filed here in district court alleging, among other things, that Monsanto's seed licensing practices give the company too much influence over prices charged to farmers. The private litigation focuses exclusively on the production of corn and soybean products, but lawyers involved in the case said they are considering widening the charges to include allegations of collusion in the cottonseed market as well.

Meanwhile, the acquisition of Delta & Pine is still under review and is reaching the final stages, people close to the deal said. The acquisition of Delta & Pine is a crucial element of the company's long-term strategy, according to analysts and company documents and Monsanto has pegged some of its hopes on the deal.

The Monsanto-Delta & Pine merger is set to expire at the end of the month, though the two have an option to extend the deal again well into 2000. Justice lawyers are said to be firm in their demands that Monsanto agree to license their cottonseed gene technology and are prepared to block the deal if the companies move to close the merger.

Signaling that a deal may still be within reach, Robert Shapiro, Monsanto's chief executive officer, is scheduled to meet with Assistant Attorney General Joel Klein, the head of Justice's Antitrust Division. The meeting Monday is seen as a last-ditch effort to salvage the merger, according to market sources, but it is unclear if the broader Justice probe will be an issue at the talks.