Seeding Power: The Other Problem with GM Crops

 This article originally appeared in the Summer 2000 issue of our New Rules Journal.

Seeding Power: The Other Problem with GM Crops

by Brian Levy

Two visions of agriculture are battling today for our hearts and minds. One is marked by potentially harmful environmental impacts, the privatization of agricultural knowledge, the concentration of power and control in a handful of companies and the transformation of farmers into laborers. The other embraces independent ownership, small-scale production and sustainable agricultural practices that preserve diversity and local control. In discussions of genetically engineered food, the debate has largely centered on genetic engineering’s potential impact on public health and safety. But behind the environmental fears are broader social and economic concerns. Biotechnology firms designed GM seeds to be grown in a large-scale agricultural system; in such a system, farmers become renters of seed technology. Organic farms are typically independently owned and contribute to a stable local economy. In the late 1990s, these two visions collided.

GM’s Golden Days

Thegenetic engineers won the first round. When genetically modified crops(GMs) were first introduced in 1994, they were widely viewed as the next technological revolution in an agricultural system already dependent on synthetic fertilizers and hybrids. Unlike previously developed hybrid crops, GM crops are created by combining the genetic material from two distinctly different organisms. In other words, where hybrid corn crops were made by selectively breeding different types of corn, GM technology crosses species boundaries, inserting genes from bacteria into corn, from fish into tomatoes.

The Food and Drug Administration (FDA), the Environmental Protection Agency(EPA) and the U.S. Department of Agriculture (USDA) rapidly approved 50 GM varieties for use, from corn and soybeans to tomatoes and potatoes. Genetically modified sugar beets, rice, wheat, peppers, bananas, strawberries and fish were expected to follow shortly.

Despitehigher seed costs, by 1999 approximately 25 percent of U.S. cropland had been planted in GM varieties. Monsanto, whose GM seeds accounted for 88 percent of the total transgenic crop area in 1998, predicted that by 2000 almost 100 percent of all soybeans planted in the U.S. would use GM seeds. GM seed sales reached $1 billion. The International Seed Trade Federation confidently predicted sales would reach $2 billion by 2001 and $20 billion by 2010. Food processors accepted the new technology without question.

A Grassroots Movement

Thegenetic engineering revolution was spawned by a handful of chemical and seed companies. The organic revolution, on the other hand, was spawned from the ground up, on tens of thousands of independent family farms. Natural food sales began with a handful of tiny health food stores, and later, modestly sized food cooperatives. In the U.S., Europe and Japan, sales reached $1 billion in 1990 and grew 25-30 percent annually over the next ten years. In 1999, U.S. organic food sales alone exceeded$6.5 billion through 6,000 retailers. Over the past five years, U.S. organic acreage has more than doubled to 2.2 million acres.

Ashowdown between two agricultural futures was inevitable. In the U.S., the 1990 Organic Foods Production Act ordered the USDA to develop national organic standards. In December 1997, the USDA issued draft standards that largely reflected the interests of the biotech industry and corporate agriculture. The standards would have defined genetically engineered crops as "natural foods" and would have allowed the irradiation of food and the use of waste sludge as fertilizer. These standards contradicted those recommended by the National Organic Standards Board, a USDA-sanctioned non-governmental body of organic growers, processors, certifiers, retailers and environmentalists.

Inan unprecedented and largely unorchestrated rebellion, consumers and producers of organic produce flooded the USDA with 275,000 overwhelmingly negative comments in less than six months. Food coops, which had been instrumental in creating and building the market for organic foods, now played a key role in defeating the proposed standards: their infrastructure was crucial in spreading the word and encouraging consumers to respond. In May 1998 the USDA withdrew the draft standards and went back to the drawing board. The organic community began to adjust to its newfound strength and move from a what-are-we-against to a what-are-we-for stance.

GM Hits the Wall: Europe

InEurope, where food is viewed as a cultural issue as much as an economic one, GM crops were never enthusiastically embraced by farmers or the public. Because citizens distrust government pronouncements about food safety after public health crises like mad cow disease, public policy with regard to GM crops was more cautious from the beginning.

In1990 the European Union issued Directive 90/220, which allowed countries citing health or environmental concerns to ban for three months the growing of specific GM crops. In practice, these bans were extended indefinitely, and no new GM crop has gotten a green light in Europe since 1998. In February 1999, Germany joined France, Luxembourg, Portugal and Austria in formally banning the planting of Novartis Bt corn. In June 1999 the EU Council of Environmental Ministers agreed to continue the de facto moratorium on new approvals of GM crops.

When the first GM foods appeared on European grocery shelves in 1995, consumer resistance led to two new EU directives. The so-called "Novel Foods Regulation" (97/258) of 1997 created a new testing and approval system for any foods not used for human consumption before, including any GM products. It also required that all new GM foods be labeled. A 1998 EU regulation (98/1139) mandated the labeling of GM soya and maize already on the shelves.

As EU member states translated the directives into national legislation, Britain chose to impose fines of up to $8000 on shops and supermarkets that failed to label. 1 In early 1999 several European countries enacted legislation that required food outlets to inform customers whether they were using GM crops.2

Inthe spring of 1999 three of the world’s largest food processors -Nestle, Unilever and Cadbury – announced they would no longer use GM ingredients in their products sold in Britain. Months later a consortium of six European food retailers vowed to keep GMOs out of all store brand products in the EU.

Multinational food companies that market GM food elsewhere began introducing GMO-free product lines for EU distribution. Even food chains such as Burger King, Domino’s Pizza and KFC announced they would no longer use GM ingredients in the EU. It was truly a sign of the times when the cafeteria at Monsanto’s UK offices stopped serving GMO foods,"protecting" workers from the very foods they helped to create.

TodayEurope supports over 110,000 organic farms that cover 2 percent of the land in agricultural production. Some countries, such as Austria, already have 10 percent of land in organic production. In 1999 about 11 million acres of European cropland was planted in GM crops, a number that is not increasing. That same year 7 million acres were organically farmed. At present rates, European organic acreage should exceed GM acreage by next year.3

GM Hits the Wall: United States

TheU.S. is behind Europe but moving in the same direction. A January 1999 Time magazine poll revealed that 81 percent of U.S. respondents wanted GM foods to be labeled. In a movement reminiscent of the organic standards groundswell, 500,000 signatures were sent to Congress and the President last summer calling for the labeling of such foods.

Inthe past year, GMO labeling bills have been introduced in Minnesota(S.F. 3638), California (S.B. 1513) and Michigan. In Maine, proponents are now organizing a Maine Right to Know initiative to hold a statewide referendum in 2001. In the U.S. House of Representatives, Dennis Kucinich (D-OH) introduced the Genetically Engineered Food Right to Know Act (H.R. 3377) last November. Barbara Boxer (D-CA) has introduced a companion bill (S. 2080) to the Senate. Several states – New York, Minnesota and Vermont – have also introduced bills to ban the selling, cultivating, planting or harvesting of GMOs.

Americanfood businesses have begun to imitate their European brethren. Whole Foods and Wild Oats natural food companies announced they would remove GM products from their shelves altogether. Frito-Lay Inc. announced it would accept only GE-free corn for use in its snacks. Gerber and several other food processors followed suit. In April, McDonald’s announced it would use only non-GM potatoes. In early May, the White House put forth new proposals that make submission of company data on GM crops mandatory rather than voluntary. The proposals also direct the FDA to develop guidelines for companies that want to voluntarily put labels on foods indicating whether they contain GM ingredients or not.

Farmershave begun to reconsider their reliance on GM seeds. For many the more expensive seeds have not translated into higher profits. And the markets for GM crops are shrinking. Since 1998, the EU has ceased importing American GM corn, costing the U.S. $200 million a year in lost sales. Soybean exports to the EU have fallen by half. The pressure against GM crops has increased further as major U.S. commodity handlers recently announced they would not buy GM crops not approved for the EU market. Many farmers discovered that they would have to begin separating GM from non-GM varieties, an expensive proposition for farmer and grain elevator.

Two years ago, farmers received a premium for GM varieties. Now many are receiving a premium for non-GM varieties. As a result, the USDA expects plantings of GM soybeans, corn and cotton to decrease this year. GM acreage will decrease even further due to a new EPA biosafety rule on Bt corn requiring 20 percent of farmers’ land to be sown with conventional varieties.4

Adeclining market for GM seeds has dimmed investor enthusiasm for the companies that market them. Last year Deutsche Bank, Europe’s largest, recommended that investors sell their holdings of genetic engineering stocks. Now even the biotech giants are thinking twice. While the industry may not be in full-scale retreat, finding a warm reception these days can be a challenge. As thousands converged to attend a Biotechnology Industry Organization’s conference in March 2000, the Boston City Council unanimously passed a resolution declaring March 26"You Are What You Eat Day."

Will Global Authorities Preempt National Decisions?
Who has the right to regulate GM crops? This was a primary dispute that led to the collapse of the December 1999 World Trade Organization (WTO)meeting in Seattle. The U.S. aggressively pushed to create a working group on biotechnology within WTO. If successful, this would have set in motion the inclusion of GMOs under the General Agreement on Tariffs and Trade (GATT). Under GATT, countries cannot make distinctions between products on the basis of how they are grown or manufactured or caught. Thus a shoe or a tomato or a tuna fish must be treated the same no matter what environmental or labor or safety concerns are associated with the way they were produced. Under the WTO, GM corn would be considered regular corn, and any attempts by nations to regulate or label GMOs would be deemed protectionist.

Thetumultuous situation in Seattle and opposition by European countries stalled the attempt to bring GMOs under the WTO. Attention turned instead to the ongoing negotiations under the United Nations Protocol on Biosafety (widely known as the Cartagena Protocol on Biosafety). Negotiated under the Convention on Biological Diversity, the Protocol talks focused on regulating the movement of GM goods with the goal of safeguarding biodiversity and human health. Unlike the WTO, this venue was more likely to consider environmental and consumer concerns to be valid even when they interfere with trade.

As the biosafety talks began in January 2000, intense pressure to minimize efforts at regulating biotechnology came from the so-called "Miami group" of six countries – the U.S., Canada, Australia, Argentina, Chile and Uruguay. However, the biotech industry began to recognize that without clear international rules on GM safety, public mistrust would only continue to increase. When the talks concluded, several important provisions had been adopted by the 135 participating countries. GMO exporters are required to indicate that their shipments contain GM material. Both GM seeds and grains used for food and feed must be identified and approved before importation. Countries can bar the importation of GMOs, even when lacking scientific certainty about a GMO’s potentially harmful effects. It was a rare triumph of the"precautionary principle" in international law – the idea that we are better safe than sorry.

Once ratified by 50 countries, the Protocol will impose greater restrictions on international trade than any prior international environmental agreement. The gingerly worded Protocol must somehow assert independence from existing WTO regulations without being struck down as a barrier to trade.5

Better Rules To Grow By
Today we are writing the rules that may determine the technological underpinnings and perhaps even the organizational structure of future agriculture. Negotiations at the state, national and international level revolve around several key issues, most of which have to do with ownership and economic sustainability.

Inthe U.S., the battle over organic standards has been a contest to define the very meaning of what constitutes organic production. Whenthe USDA included GM crops as "natural" crops it clearly was favoring an agricultural system in which power is concentrated in the hands of a few. With the new organic standards, a key question is whether they too should favor a certain kind of agricultural ownership system. Should organic standards protect the independent farmer as well as the soil?

InFebruary 2000 the USDA issued revised organic guidelines. They were largely taken from rules developed by the organic community since the outcry over the initial USDA standards. After a final comment period, the new standards will go into effect later this year. While the proposed standards ensure food safety and some measure of environmental protection, there is nothing in them that favors independent ownership and decentralized, smaller-scale farms.

LargeCalifornia growers such as Cal-Organic already grow and ship carrots nationwide, to the detriment of local organic producers across the U.S. As more producers adopt organic techniques, the price premium that organic growers once captured will further diminish, providing a financial incentive to increase in size.

Europestresses the "multifunctional" role of agriculture – the idea that agriculture has a much wider role than just the production of food, from protecting the environment and maintaining rural communities to preserving a cultural heritage and utilizing existing rural infrastructure. Are we prepared to expand the definition of organic to include the fostering of a socially organic, diversified and locally rooted food production system? It is within this context that several questions are being raised.

• Labeling. The term "organic" traditionally referred to environmentally sustainable farming. More recently, environmental sustainability is seen as just one aspect of a healthy agricultural system. The Land Stewardship Project (MN) and the Food Alliance (OR) are developing a sustainability label that incorporates environmental and labor standards for beef, pork and apple production. The project rewards farmers with points for "sustainable" practices, from insuring their workers and providing day care to reducing the use of chemicals and antibiotics. The guiding principles also require participants to maintain independent family farms. In California, a "California Green" label requires certified growers to reside on farms of less than 100 acres of row crops or 500 acres of forage crops. While these standards begin to broaden the scope of labeling, they are also able to include the many sustainable or transitional growers who are not certifiable under current USDA standards.
• Costs of Organic Certification. Under the current system, farmers will bear the entire cost of becoming certified, leaving smaller producers to pay a proportionately higher cost than their larger competitors. The three-year transition to organic agriculture typically involves yield drops with no price premiums – an income loss that smaller farmers find more difficult to cover.

  At present, the USDA offers no guidelines on making certification fees reasonable or proportionate to farm revenue. In Europe, all countries have programs to support farmers during and after their transition to organic agriculture. The Danish government has a budget of $5 million for organic conversion grants, paying farmers $192 per converted hectare in the first year, $102 in the second and $38 in the third. The conversion must cover the entire farm and be implemented within four years. Sweden allocates EU and domestic funds to pay all organic farmers support payments of $57-862/acre, depending on crops. As a result organic production now comprises 10 percent of Swedish agriculture. Similar state programs could be adopted to cover certification costs or transitional income losses. At present, however, only Minnesota has a program that reimburses farmers $200 of their certification costs. States or localities in the U.S. could also offer property tax rebates for farms under a certain size to cover their cost of organic certification.

• Liability. The USDA draft standards say nothing about "genetic drift" – the pollen that blows off the fields of GM crops and contaminates organic fields. When biotech companies contract with farmers to grow GM crops, they place responsibility for any contamination on the farmer. The organic grower is thus at risk from, and liable for, the very crops they are trying to avoid – while the biotech companies carry no liability. Organic farmers are insisting that the USDA hold biotech patent holders and seed companies liable for any economic and environmental damage caused by drifting. Both Minnesota and Nebraska legislators have introduced and lost bills that emphasize the strict liability of the manufacturer in cases of GM contamination. While the USDA ignores the issue, other EU nations have at least set standards for genetic contamination and distance requirements between GM and non-GM fields.
• National Preemption. Ultimately, the organic standards must have the capacity to evolve to accommodate concerns over ownership, scale and liability. At present, USDA guidelines stipulate that a state’s organic requirements cannot be less restrictive than the National Organic Program guidelines. However, the USDA must approve more restrictive organic requirements should states wish to go further. The USDA acts as an accreditor, not certifier, but forbids independent certifiers from enacting higher standards. The standards currently act as a ceiling, not a floor. Private and state certifiers must be able to state on their label that this product "meets or exceeds" or "exceeds" USDA organic standards. Furthermore, the USDA contends that the Organic Food Production Act authorizing the USDA organic standards also limits their scope, presenting a barrier to future improvements. Thus the room needed to allow evolution of the standards appears narrow, and this is unfortunate. It is instructive to recall that decades ago, federal minimum wage requirements surpassed any state standards. Today, states lead the federal government. Similarly, while federal organic standards are currently strong, states must have the authority to go even further. This is the case in Europe, where member states may surpass the EU directive (91/2092) that defines EU organic standards.

Conclusion

Fiveyears ago, the president of Monsanto predicted that as for biotechnology, "In a few years, the public will have lost interest." Few predictions have proven so wrong so fast. Rather than losing interest, the public has shown widespread support for organic agriculture and has moved governments to reconsider the future of biotechnology.

Until now, the struggle between competing agricultural systems has focused on environmental concerns and food safety. Although supporters of small-scale, locally owned farms have been active, they have not yet gained a presence in the USDA’s organic guidelines. In order to create an equitable, sustainable agricultural system, our policies must reflect the importance of independent farms, not just for our health but for our communities and our economies.

Notes

1. Remarkably, the British Retail Consortium (BRC) – representing 90 percent of British retailers – issued a statement saying the government legislation didn’t go far enough to help consumers.

2. Now every few months brings an additional directive on GM foods. In January 2000 new rules passed requiring GM labeling if food manufacturers cannot guarantee each ingredient contains less than 1 percent of GM material. As of April 10, all nonpackaged GM products -food served in restaurants, on the street, or catered – must be labeled(Amendment 49/2000). Rules concerning additives and flavorings from GM sources also came into force then. An EU "GMO-free" label is in the works for later this year, and the EU Parliament has considered a bill to impose full liability on GM companies for any damage done by their products. The movement for GM labeling quickly spread around the world. Australia and New Zealand recently passed labeling laws, and South Korea plans to follow suit next year. Japan will soon implement mandatory labeling for food containing GM ingredients, and plans the first GM-free futures contract on the Tokyo Grain Exchange this May. In March Mexico’s Senate voted unanimously to require GM food labeling. Thailand has banned the importation of GM seeds and Sri Lanka has banned all GMO imports.

3. In 1999, there were 7 million organic acres in the EU on 115,000 farms, representing 2.05 percent agricultural area. Growth of organic acreage from 1988-98 averaged 32 percent/ year (Eurostat).

4. US GM-planted corn acreage (19.5 million acres in 1999) is expected to decrease 24 percent this year; GM-planted soybean acreage (42.6 million in 1999) is expected to decrease by 9 percent. (USDA/ERS)

5. Further debate over the international regulation of GMOs is now taking place inside the Codex Alimentarius Commission, an organization charged with the development of an international food code. Members of the organization are primarily food industry representatives. Standards adopted at the Codex meetings are considered international benchmarks against which national food regulations are evaluated by the WTO. The Codex Committee on food labeling and a newly formed Codex Task Force on Foods Derived from Biotechnology will be at the center of these international debates as they unfold.

Brian Levy
Research Associate, Institute for Local Self-Reliance

© 2000 Institute for Local Self-Reliance