WASHINGTON -- American farmers paid premium prices this spring to sow many of their fields with genetically engineered corn and soybeans, but now as the fall harvest nears, more of the international buyers they depend upon are saying they do not want those crops.
Consumers and food companies in a growing number of countries are shunning the new crops created by genetic engineers at such companies as Monsanto, DuPont and Novartis. Foreign consumers say they do not wish to eat the new foods like corn that have been altered to produce their own pesticide, and some companies are reacting quickly to consumers' desires even though no clear evidence exists that the crops are unsafe.
This week in Japan, for example, the Kirin Brewery Company announced that starting in 2001 it would use only corn that has not been genetically engineered. While bowing to customers' concerns, Kirin made clear that it did not think the products were unhealthy. A day later, Kirin's competitor, Sapporo Breweries, announced that it, too, would revert to traditional corn, which is an ingredient in some types of beer.
The biotechnology industry plays down the recent decisions of some food companies, saying they are overreacting to threats that aren't real. Most consumers, the industry says, do not mind these new products.
Until a few months ago, opposition to genetically altered foods was largely confined to Europe, and trade officials in the United States have been battling the European Union, which has stopped buying all American corn. But this summer, the Clinton Administration's efforts have grown increasingly urgent, in an attempt to contain the aversion to these crops that is leaping from continent to continent.
Japan, which now wants mandatory labeling of gene-altered products, is the largest importer of American crops, and Mexico, whose top producer of corn flour for tortillas is avoiding altered grain, is the second largest importer of American corn.
"This is a very significant trade threat," said Peter Scher, who directs the agricultural negotiations for the United States Trade Representative's Office. "The only thing I can tell farmers is that we are doing everything we can to sell their products overseas."
About a third of American crops, including soybeans and corn, are exported. This year, American farmers planted an estimated 60 million acres (the size of the United Kingdom) with genetically engineered corn and soybean seeds, accounting for nearly half of all soybeans in the United States and about a third of all corn.
Most farmers still expect that they will find a market for much of this year's corn and soybean crops, industry officials say. But they have already been told that seven varieties of gene-altered corn, representing about 5 percent of the expected harvest, will be rejected by corn exporters. Most of that will be ground into animal feed.
Next year's harvest looms as more troublesome, with public sentiment changing, foreign markets shrinking and the agriculture industry struggling to adjust.
For the first time this summer, many corn growers are dealing with costly new issues.
Local grain elevator operators, who buy and store wagonloads of corn to sell to the exporters, have begun asking farmers to separate some types of gene-altered corn from ordinary corn to appease international buyers.
Dennis Mitchell, a farmer in Houghton, S.D., has been an enthusiastic producer of gene-altered corn and planted 600 acres this spring, 80 percent of which is a crop altered to produce a toxin that kills the European corn borer.
He boasts that the new seeds have increased his yield by at least 15 percent, and he has received assurances from local elevator operators that he will be able to sell his grain this year.
But he is paying close attention to the tremors in the marketplace, especially now that American companies like Gerber and Heinz baby foods have announced that they will not use genetically altered corn or soy ingredients. And he is uncertain what he will do next year when spring planting season arrives.
"I wish we could get this cleared up," he said. "I certainly can't raise anything I can't market."
Such uncertainty only adds to the problems of American farmers, who point out that this year's crop prices are the lowest in more than a decade.
"This is such a hard time for us, and then you compound that with this uncertainty," said Gary Goldberg, the chief executive of the American Corn Growers Association, a group that has been opposed to some practices of the biotechnology industry. It represents 14,000 independent farmers.
"Farmers are going to get caught in the middle," he said.
Clinton Administration officials have repeatedly assured consumers that all of the genetically engineered crops that have been approved in the United States are safe for people to eat. And, indeed, there is no compelling scientific evidence that shows the foods are unsafe. But the crops are so new that there is not enough evidence to prove the foods' safety to a minority of scientists who say further studies need to be done.
Dan Glickman, the Secretary of Agriculture, said that the consumers' concerns seemed to be spreading like "an infectious disease."
"This technology," he said, "got a little bit ahead of the politics."
He and Federal trade officials have spent the summer pressing European leaders and agricultural ministers to reconsider what is essentially the European Union's moratorium on new types of gene-altered crops. They have threatened some countries with intercession by the World Trade Organization, arguing that restrictions on these foods run counter to the current science supporting their safety.
Genetic engineering is a process in which scientists splice one organism's genes into another. For example, scientists created the pesticide-producing corn by inserting a gene from a bacterium.
Most of the corn and soybeans have been altered to either produce their own pesticides or to be resistant to herbicides. The first gene-altered seeds were offered to farmers in 1996, and growers snatched them up, quickly making the new biotechnology into a multibillion-dollar business for the seed companies.
The biotechnology companies say that the food companies are caving in to pressure from environmental advocates who have written letters saying that consumers do not want these products.
"Consumers are turning away from these foods in enormously smaller numbers than the activists would have you believe," said L. Val Giddings, a vice president for food and agriculture at the Biotechnology Industry Organization, a trade group of more than 800 companies in Washington.
Still, farmers and trade officials point to new problems. In Mexico, which bought $500 million of American corn last year, Grupo Maseca, the company that is the leading producer of corn flour, said recently that it would avoid importing genetically modified grain. The corn flour is made into tortillas, the Mexican staple.
In South Korea, another large importer of American grain, corn-processing companies said they were considering buying corn from China instead of the United States because of concerns about the gene-altered crop.
And, in Japan, the Government passed a law requiring food companies to label products that have been genetically engineered. (In the United States, Federal officials have only recently said they will consider voluntary labeling.) Preparing for awareness generated by the labeling in Japan, a subsidiary of the Honda Motor Company said this week that it would build a plant in the United States and hire farmers to supply it only with unaltered, conventional soybeans. The soybeans, which would be exported back to Japan, would be made into tofu.
In the United States, where there has been little uproar over the foods, the baby food makers Gerber and H. J. Heinz were the first large food companies to reject the new products. Then Iams, the pet food company, said it would not buy the seven varieties of gene-altered corn that have not been approved by European regulators. Iams's announcement shut down an alternative route that farmers had for that corn that exporters will not accept.
The agricultural industry has begun responding, with exporters trying to devise new methods to bridge the growing gap between farmers and consumers. A two-price system -- higher prices for conventional crops and lower prices for genetically-altered crops -- is clearly developing. For example, this year, the Archer Daniels Midland Company has been paying some farmers an extra 18 cents for each bushel of non-altered soybeans.
The American Corn Growers Association, which represents mostly family farms, told its members last week that they should consider planting only conventional seeds next spring, unless a host of questions can be answered, including whether the United States will be able to export the genetically altered crops.
The National Corn Growers Association, which is about twice as big as the American Corn Growers Association, and has a financial partnership with Monsanto and some of the other agricultural companies, has not followed suit.
Susan Keith, the group's senior director for public policy, said that the association, which is based in St. Louis, was keeping farmers informed of what types of genetically altered corn could be the hardest to sell, but had not suggested that they consider planting only conventional seeds.
The worries about international trade have deepened farmers' fears of a bleaker economic future.
Prices for most crops are the lowest in 10 years, and farmers say they are concerned that grain prices are falling even further now that foreign consumers are turning away from genetically altered crops. But experts say prices have mostly been affected by the larger harvests in other countries, which have reduced the demand for grain from the United States. In addition, the financial crisis in Asia caused exports to fall last year and prices to drop. And overproduction of some crops continues to hurt prices.
For now, uncertainty about the next planting season is bedeviling the nation's farmers. They cannot predict where the next food backlash will surface and sometimes, even if they do, it is too late.
"It wasn't until May that farmers got word that Europe had not approved certain kinds of corn," Goldberg said. "By then, the corn was in the ground."
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Last Updated on 9/2/99
By Karen Lutz