The controversy surrounding GMO crops skyrocketed last year. With food safety concerns magnified in Europe because of mad cow disease and the discovery of livestock feed contaminated with dioxins, European authorities were slow to approve the import of genetically modified U.S. crops, and then insisted these crops and related food products be labeled regarding GMO content. The controversy spread to the U.S., with some groups insisting that the Food and Drug Administration ban the use of GMOs in food products, increase regulation of these products, or require food companies to label their products regarding FMO content. Farmers now face additional costs of segregating GMO and conventional grain as well as the added uncertainty of potential price differentials and whether buyers will accept GMO grain.

These developments raise questions about the number of acres farmers will plant in GMO crops this spring, and whether lenders are comfortable with financing the purchase of GMO seeds. (A handful of anecdotal reports indicate that some farmers are purchasing both conventional and GMO seed, so that they might wait until the last possible moment to decide which to plant.) In general, the survey respondents indicated that GMO acerage would be steady to declining this spring. About 10 percent predicted that GMO corn acerage will increase from a year ago, with the rest nearly evenly split between a decline and no change. The responses for GOM soybeans followed a similar pattern, but a larger share- over half - thought there would be no change in acerage relative to last year. For reasons not clear, the share of bankers that believe GMO acerage will decline was relatively larger in Illinois than the other District states.

Finally, a large majority of the bankers indicated a willingness to finance purchase of GMO seed. Approximately 68 percent stated they would be willing to provide financing, while 28 percent indicated they were willing but did hold reservations. Only 4 percent stated they would not provide financing for GMO seed. The responses were similar across states, but a somewhat larger share of the bankers in Wisconsin (12 percent) expressed and unwillingness to finance seed.

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