The European Union halted the approval process Thursday for imports of some biotech-based seed corn developed by Pioneer Hi-Bred International Inc. and its closest competitor in the seed corn market, DeKalb Genetics Corp.

The EU's action followed reports Wednesday that a new Cornell University study showed that pollen from so-called Bt corn can kill monarch butterfly larvae.

Named for Bacillus thuringiensis, a naturally occurring bacterium inserted into the corn plant, Bt corn is designed to repel the European corn borer, which causes estimated annual losses of $1 billion for U.S. corn producers. The bacterium generates a toxic protein in the plant, and when the bugs feast on the plant, they ingest the toxin and die.

Pioneer officials have not quantified the potential economic impact of the EU's action, and a spokesman downplayed its effect. The move raised concerns at the company, particularly because Europe represents a $349 million market for Pioneer, or about 20 percent of its $1.8 billion annual revenues.

Trans-Atlantic Flap

The Cornell study, reported in this week's edition of the scientific journal Nature, has triggered a trans-Atlantic flap.

Industry officials discounted the study, saying the research had been conducted in a laboratory setting that did not match field-based conditions.

"The answer it doesn't have is what happens in nature. Monarchs do not eat corn. They do not eat pollen, and the only way they would ingest it (Bt) is by accident," said Doyle Karr, a spokesman for Des Moines-based Pioneer.

Environmental Concerns

Environmentalists hailed the report and the EU's move, saying Bt corn's potentially harmful effects had not been studied sufficiently.

"I think that what this shows is a potential downstream effect that will deplete already diminishing populations of monarchs," said Charles Margulis, a New York City-based campaigner for Greenpeace, the international environmental advocacy group that is a leading opponent of the high-tech crops. "I think what this really shows is that the industry's contention that they have tested these crops and have proven their safety just doesn't wash."

The situation is the latest in a series of disputes over the safety of biotech-based crops, which have been widely adopted in the United States but face growing resistance in key export markets, including Europe.

Bt corn was first grown commercially in the United States in the mid-'90s, but already hundreds of hybrids containing the Bt gene are being sold by seed companies. Farmers in this country are expected to plant Bt corn this year on about 25 million acres, or one-third of total U.S. corn acreage.

Worries Compounded

Industry officials said it was too soon to say what the ultimate impact of the Cornell study would be, but clearly concerns are high among farmers, seed suppliers, and grain processors and exporters.

The study compounded the worries of growers who have been told by some grain elevators and large grain processors this spring that they will not buy biotech- based corn that has not been approved in Europe.

"You're going to see a lot of margins decreasing if farmers in this country begin rejecting **transgenic** seed," said Scott McFarland, a former official at Pioneer who now is director of industrial relations for the National Corn Growers Association in St. Louis. "Farmers are very concerned about a two-tier pricing development because of the limited marketability."

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