IN SUPERMARKETS across Asia, bags of potato chips and containers of infant formula contain ingredients from transgenic (commonly referred to as genetically modified, or GM) crops. The non-governmental organization Greenpeace has recently campaigned to expose the widespread use of GM ingredients--imported from abroad--in Thailand and the Philippines. In the process, Greenpeace may have also unwittingly exposed a growing market opportunity for foodstuffs that are certified as not having been made from GM crops.

Unlike the United States and Canada, Asian countries have not embraced GM seeds. While Japan has recently approved three GM seed varieties, China is the only country in Asia growing a GM crop: cotton. But several countries have imported GM seeds and plants for field trials and GM rice is under development, with commercial varieties about five years off. Multinational seed companies have promoted GM seeds as a key technology for feeding growing populations. But for agricultural exporting countries like Thailand, India and Vietnam, the marketing benefits of avoiding GM crops may far outweigh any yield increases or nutritional benefits GM seeds may offer.

Says Wanchai Cherdshewasart, a member of the prime minister's National Board of Biosafety: "Now is our golden opportunity. Most countries are looking for non-GM produce. We should take advantage of it." The advantage of non-GM crops has all to do with consumer perceptions of GM crops. Carole Burke, editor of Japanscan's Food Industry Bulletin, says, "Japanese consumers are very concerned about food quality and safety in general, and are very sceptical about the safety of GM foods."

That same scepticism has spurred several European countries to reject numerous shipments of American and Canadian GM corn, soya beans and canola. Thailand's prime minister, Thaksin Shinawatra, is well aware of how such consumer sentiment affects export markets. He is hedging his bets, recently telling a local newspaper, "We should not say that we want or do not want GM . . . People are just suspicious of the technology."

While some GM commodities have been approved for import into Europe and Japan, many European governments now require the labelling of foods with GM ingredients. Asian countries are beginning to follow suit. Some companies like food-processing giants Unilever and Nestle have eliminated the use of GM ingredients in their operations in Europe. Japan's top two brewers, Asahi and Kirin, eliminated GM ingredients several years ago. Says Burke, "All leading food-processing companies in Japan are very conscious of consumers' fear of GM foods. Market leaders in all segments of the food industry are demanding GM-free commodities, and the menus of major restaurant chains note their foods are GM-free."

As labelling becomes widespread, the demand for GM-free food is likely to increase and could potentially represent a multibillion-dollar market. Burke says the growth in demand can be compared to the demand for organic food. In Japan organic foods represent only 1%-2% of food sales "but will grow considerably" she says, while organic foods are the fastest growing segment of food sales in the U.S. In order to meet that demand, U.S. food processor Archer Daniels Midland has been offering American farmers a premium for non-GM corn and soya beans of around eight cents a bushel.

But maintaining separate storage and processing facilities for GM and non-GM commodities requires vigilant tracking which increases costs. To avoid this complication, Brazil adopted the alternative strategy of simp ly banning the import of all GM seeds and commodities. Brazil's new reputation as a reliable source for non-GM corn and soya beans was the key factor in South Korea's recent decision to import Brazilian, rather than American, corn. When GM rice hits the market, demand for non-GM rice will likely follow, and Asia, the world's ricebowl, will be expected to meet that demand.

In Asia, Thailand is the country best positioned to reliably serve the non-GM market. More than two years ago, the government banned the import and cultivation of commercial-GM seeds. While there are currently experimental field trials of Monsanto's GM cotton, and the government-funded National Centre for Genetic Engineering and Biotechnology is conducting research into GM papaya, tomato and cucumber, those field trials may not be legal for much longer.

FIELD-TESTING BAN

At the urging of Thai NGO Assembly of the Poor, Thaksin's cabinet is considering a ban on the field-testing of GM seeds and plants. Agricultural economist, Chaiwat Konjin, who oversees a major Asian Development Bank agricultural loan in Thailand, says, "It is not in the interest of Thailand to produce transgenic crops. The trade issue is very important and we must protect our export markets."

The Philippine Senate tried to pass similar legislation last year. Despite an active NGO community opposed to GM crops, the move was unsuccessful. Unlike Thailand, the Philippines is a net importer of food, especially rice, and is more concerned about feeding its population. The Philippines is also home to the International Rice Research Institute, which is in the forefront of research into GM rice. The IRRI's spokesman, Duncan Macintosh, says the proposed ban was short-sighted and would have been counterproductive. "We try to keep our research agenda separate from consumer concerns. Because without the science consumers will never get the facts they need to have a constructive debate."

China, India, Vietnam, Indonesia and even Thailand are part of the IRRI's Asian Rice Biotechnology Network, which may eventually develop GM rice varieties. If such a variety were to come to market, "there is just no way Japan would accept it," says Burke. "The Japanese are extremely fussy about their rice." Chaiwat says Thailand is keenly aware of this attitude and neither the Ministry of Commerce nor the Ministry of Agriculture will promote GM crops. "We want to protect our own varieties of rice."

Vietnam is the world's second-largest rice exporter, after Thailand, but the Vietnamese serve a different market segment with lower-quality rice and so are not as opposed to the idea of GM rice. The governments of China and Indonesia, like the Philippines, are more concerned about food security than export-market security and so are not opposed to GM rice. While the Indian government is cautiously optimistic about GM crops, a delegation of private soya-bean producers recently visited several European countries to confirm that Indian soya was still non-GM.

While Thailand's stance toward GM crops may be pre-emptive, it is not simply forward-looking. Thailand has already run into problems with some of its export markets. A few months ago, the government of Saudi Arabia rejected shipments of tuna packed in soya oil produced from GM soybeans, imported from North America. The two countries have resumed trade in tuna, but Thai manufacturers must now label the product as GM-free and pay for certification by a third-party testing facility.

This experience underscores the complexity of the situation and lends credence to Greenpeace's calls to ban imports of GM commodities from other countries, which are often used in foods processed in Thailand. But even with such a wide ban, the genetic genie may already be out of the bottle. There are reports of Thai farmers smuggling and growing GM seeds from China, and there is always the possibility that GM seeds and plants will be brought into the country illegally or by accident. While the verdict is still out on whether GM crops are a boon for farmers and consumers or a risk with far-reaching environmental implications, Thailand's pragmatism suggests an answer already familiar to business: The customer is always right.

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