CHICAGO - Fifth-generation farmer Kevin Swanson's love for genetically modified soybeans has fully blossomed since his tentative embrace of the technology in 1997. He planted only Roundup Ready soybeans this year on several thousand acres of his sprawling Nebraska farm, having just dipped his toe in one year after its 1996 commercial debut. (ref.2022)

Swanson started out by planting 20 percent of his acreage to Roundup Ready soybeans, which are spliced with a gene developed by biotechnology giant Monsanto to make them resistant to the company's popular and biodegradable Roundup Ready herbicide.

Like the quiet revolution in Swanson's fields, genetically modified (GMO) soybeans have won the hearts of most U.S. farmers and account for 63 percent of the oilseed grown this year.

But just as eagerly as he embraced Roundup Ready soybeans, Swanson turned his back on gene-modified corn this year for the same basic reason: it saved him no money.

Most gene-altered corn is modified with a bacterium from the soil to make the crop deadly to the European corn borer, an insect that in some years has caused farmers millions of dollars in damage. "We haven't had much of a problem with the pest. Not enough to justify planting GMO corn," Swanson said.

"Roundup Ready soybeans have been economical, and benefit the environment because there is no run-off in Roundup herbicide," he said in a telephone interview.

Swanson said savings from using Roundup herbicide ranged from $5 to $10 an acre, working out to about $2,250 in average savings for an American farmer with 300 acres (121 hectares) of soybeans. That is significant savings for a farmer, who will earn only about $47,000 for his 300 acres of soybeans at current prices.

Such savings for cash-strapped farmers -- less fuel, less tillage, less herbicide -- remain the driving force behind the success of GMO soybeans.

Preliminary results of a study done this year by the National Center on Food and Agricultural Policy of 30 crops conclude that Roundup Ready soybeans cut grower costs by an average of $15 an acre (0.447 hectares), representing savings of $735 million for 49 million acres.

Insect-resistant cotton was estimated to have earned farmers an extra $99 million from an extra 260 million l (117.9 million kg) of cotton from the GMO acreage, which also cut pesticide use by 2.7 million pounds (1.225 million kg) annually.

WARY EYE ON EUROPE, CHINA

But the flip side of the cost benefits for farmers has been disrupted demand for GMO crops, especially for corn and soybeans, the use of which spreads out all over the food chain from animal feeds to cooking oils.

In Europe, consumer groups have been ferocious opponents of gene-altered crops, destroying test plots and demanding research to guarantee that GMOs won't harm humans, animals or the environment.

European consumers, worried by a decade of mad cow disease and more recently foot-and-mouth, have been wary, leading European food makers and retailers to demand "non-GMO" ingredients from suppliers.

The result is that a farmer in Illinois harvesting GMO soybeans this month will usually earn 5-10 cents a bushel less than a farmer with non-GMO beans.

Top processor Archer Daniels Midland, which ships huge amounts of grain products to Europe, is offering up to 20 cents more per bushel for non-GMO soybeans this month at its giant Decatur, Illinois, processing complex.

The European Union has proposed strict labelling and traceability rules for GMOs, rules that the United States says are unworkable, unrealistic and unreasonable.

U.S. Agriculture Secretary Ann Veneman has said that if no compromise was found, a World Trade Organisation complaint was an option. The U.S. and Europe have already fought to a WTO stalemate over the EU's refusal to allow imports of U.S. beef produced with a genetically altered bovine growth hormone.

China, another huge U.S. market for soybean exports, jolted traders in June by announcing vague new rules that require labelling and certification of GMO products.

Uncertainty about how the rules would be used halted U.S. soybean exports to China, pressured U.S. soybean prices, and thus reduced earnings for U.S. farmers -- all over complicated and contentious GMO trade issues.

"I am concerned about what's going on in Europe and China," said Doug Boison, another Nebraska farmer who grows both non-GMO and Bt (pest resistant) corn as well as more than 1,000 acres (405 hectares) of Roundup Ready soybeans. But he said U.S. farmers were going to have to "work with" the traceability rules in Europe.

"We are not going to have a choice and I think in the long run it will be to our benefit," Boison said. "But it's not going to be cheap."

Bart Ruth, president of the American Soybean Association, said on October 23 that the dispute with China had been resolved and "the path has been cleared for a resumption of U.S. soybean shipments into China."

He said China, whose annual purchase of U.S. soybeans has totalled $1 billion in recent years, would accept as an interim measure a U.S. government review that biotech soybeans are safe for human and animal consumption, until Beijing completes its own regulatory review on gene-altered soybeans.

STARLINK LEGACY

But that compromise sounded like one reached last year with South Korea and Japan, top U.S. corn importers who have since cut back their buying on concerns that the grain might be contaminated with StarLink, a GMO corn grown for livestock but not approved for food use because of allergy concerns.

The discovery of StarLink in taco shells and other food items last year sparked widespread food recalls by Kraft and other food makers. That also prompted discounted prices to angry farmers, some of whose corn suddenly tested positive for StarLink even if they hadn't planted the GMO, thanks to "pollen drift."

Iowa state assistant attorney general Steve Moline said farmers remember the bitter lessons of the fiasco with StarLink, which was quickly withdrawn by its maker Aventis CropScience, a unit of the Franco-German pharmaceutical giant Aventis SA since sold to Germany's Bayer AG.

"StarLink has shown that it takes very little genetic material to infiltrate a significant portion of the corn supply," said Moline, who was at the forefront of a legal effort that secured compensation from Aventis for farmers and grain elevators in 17 states with supplies tainted by StarLink.