Multinational Monitor

JAN/FEB 2000
VOL 21 No.


Don’t Ask, Don’t Know: The Biotech Regulatory Vacuum
by Ben Lilliston

Down on the Farm: Farmers Get The Biotech Blues
by Michael Stumo

The View From Wall Street
by Charlie Cray

The International Food Fight: From Seattle to Montreal
by Kristin Dawkins

In The Pipeline: Genetically Modified Humans?
by Richard Hayes


Traitor and The New Life Science Industry
An Interview with Pat Mooney

Changing the Nature of Natures
An Interview with Martin Teitel


Behind the Lines

The Biotech Challenge

The Front
Monsanto Sued - Corporate Welfare Challenged

The Lawrence Summers Memorial Award

Names In the News


Down on the Farm Farmers Get The Biotech Blues

by Michael Stumo

Linus Solberg is a farmer from Cylinder, Iowa. He grows corn and soybeans and raises hogs. Solberg has also been a seed dealer for years. From his farm he sells corn, soybean and other crop seed to local farmers for a relatively small commercial seed company. Some of the seed he sells and plants is genetically modified (GM).

But Solberg is not a fan of GM seed. GM crops are not more profitable, he says, but they can "make terrible farmers into good farmers."

Genetically modified seeds generally allow farmers to have fewer problems with weeds and insect pests with less management scrutiny of the fields and less labor.

In most cases, the genetic alterations in seeds do not increase yield. The popular Roundup Ready soybeans, a GM crop, actually yield less than conventional counterparts.

Why farmers find GM seed worth planting is a crucial question, because consumers are not the biotech industry's primary target for selling the first GM seed products -- farmers are.

The farmer-targeted modifications or plant traits are called "production traits." Their purported benefits to farmers do nothing to enhance food's quality, safety, taste or nutritional content.

Production Traits

Farmers and gardeners have faced bugs and weeds in their fields and gardens since the dawn of agriculture, and most production traits are focused on increasing yields by reducing bugs and weeds. Other traits provide drought tolerance and make the plants stronger.

Weeds are a big problem for farmers. They can reduce yields and can make a person look like a "bad farmer" to the neighbors. Since the 1940s, crop producers have purchased agricultural chemicals to kill the weeds and bugs which made their lives difficult.

Biotechnology now allows them to shop through the seed catalogue for products which do the same thing as many chemicals -- without requiring another pass through the field to apply the chemicals. But farmers pay a premium for the GM seed to get it done.

The most popular GM crops come almost exclusively in two categories: resistance to powerful herbicides, and resistance to insect damage because the plant cells produce a pesticide.

Examples of herbicide resistance include Monsanto's Roundup Ready (RR) corn and soybeans and AgrEvo's Liberty Link corn. Roundup Ready crops are designed to withstand application of Roundup herbicide (glyphosate), which generally kills anything green. Liberty Link corn is designed to survive carry-over problems caused by heavy application of an herbicide called Pursuit. "Carry-over" is when last-year's herbicide remains in the soil, thereby poisoning this year's crop.

Monsanto's Roundup Ready soybeans quickly became popular with farmers, making them the most successful ag-biotech product introduction in history. Farmers can plant the soybeans and spray the entire field with glyphosate to kill every weed in the field without harming the crop. Monsanto also sells or licenses Roundup Ready corn, cotton and canola.

Insect resistance has been the other most popular category of production traits. Bt corn, cotton and canola have rapidly gained huge market share in North America. Bt is an abbreviation for the bacterium known as Bacillus thuringiensis (Bt).

Organic farmers have sprayed the bacteria on their fields as one of the few natural pesticides for many years. The bacteria produce a protein that is toxic when ingested by certain lepidopteran insects such as European corn borers and tobacco budworms.

Bt corn plants contain genes from this bacteria. Both YieldGard brand corn (designed to protect against the European corn borer) and BollGard brand cotton (designed for pink bollworms and tobacco budworms) contain the Bt gene.

The amount of the toxin produced can be low or high depending on where the Bt gene is in the corn genome. Margaret Mellon of the Union of Concerned Scientists states that when company scientists put the Bt gene in a batch of corn cells the gene may attach to Chromosome #2 in one or more of the millions of corn cells. This is called an "event." This event is patentable. It may cause the corn plant to produce Bt in the leaves only and for just a portion of the season.

The next time company scientists put the Bt gene in a batch of corn cells, it may attach to Chromosome #10. This is a separate event which is separately patentable. The event may cause the corn plant to produce extremely high amounts of Bt throughout the plant and throughout the growing season. Mellon says that there are quite a variety of Bt patents based on different processes and different "events." In most cases, the amount of poison produced is much higher than organic farmers use when applying the natural Bt bacteria to their crops.

The specific market penetration numbers show the tremendous popularity of these production traits with producers.

According to the USDA, 65 percent of the U.S. cotton crop was planted to GM cotton in 1998 as compared with 56 percent in 1998 and only 25 percent in 1997. GM soybeans made up 57 percent of the U.S. soybean crop in 1999, up from 42 percent in 1998.

Although the percentages increased for all GM crops in 1999, there is a good chance that the numbers will decrease in the year 2000 due to consumer rejection filtering upstream through the food chain.

The Appeal to Farmers

The biotech industry pushes farm crop seed products which cost more, may or may not yield more, and reduce labor needs. But it has now become clear that GM crops do not improve the bottom line for farmers: profit per acre does not increase.

Farmers do not look at the cost-benefit analysis to determine whether GM crops or other inputs will produce more profit per acre, explains Linus Solberg, the farmer/seed dealer. Rather, they focus narrowly on yields.

Dr. Mike Duffy, an agricultural economist from Iowa State University, recently completed a study examining why farmers buy RR soybeans and Bt corn. Iowa growers surveyed in Duffy's study said the reasons they planted RR soybeans included:

  • increased yield through improved weed control -- 53 percent;
  • decreased weed control costs -- 27 percent;
  • increased flexibility in planting -- 12 percent; and
  • more environmentally friendly -- 3 percent.
But the on-farm experience, supported by field testing conducted by the University of Arkansas and other universities, shows that RR soybeans yield less than their conventional counterparts.

The survey results for Bt corn was nearly the same. The growers' stated reasons for choosing Bt corn were:

  • increased yield -- 77 percent; and
  • decrease pesticide costs -- 7 percent.

Farmers did not say they planted GM seed to achieve more profit per acre.

Solberg plants 400 acres of soybeans each year -- 300 conventional and 100 Roundup Ready.

While he insists that farmers can make more money per acre if they plant conventional soybean seed saved from last year and undergo a well managed selective herbicide program, he plants RR soybeans in particular fields where he has severe weed problems. One field is near the Des Moines river and often floods. The floods deposit weed seeds from upstream. Spraying Roundup has allowed him better control of the weeds.

George Moriarty has worked for the Iowa Farm Business Association counseling farmers and gathering farm data for years. Although he argues that GM crops do not make economic sense, he can identify a number of factors leading farmers to use GM seed.

Farmers are eager to jump at something new, especially if there is a promise of higher yields, he says.

Moriarty also points out the more subtle incentives for farmers to plant GM crops. Despite low commodity prices, there is intense competition by remaining farmers to rent existing land. With increasingly thin profit margins, the remaining conventional farmers are striving to farm more and more acres to make a living. Moriarty says that tenant growers believe that their leased fields "have to be as clean [free of weeds] as my neighbor's or my landlord won't rent to me."

Dr. Duffy concurs with many of Moriarty's explanations. He believes that farmers "don't want to get left behind." Rather than keeping up with the Jones, farmers "don't want to get eaten up by them." This amorphous desire has nothing to do with profit but is part of the competitive farming subculture which has developed in conventional agriculture.

Duffy also believes that growers have other motivations which do not show up in his survey. They want to keep clean fields so their neighbors will think highly of them. Weedy fields are often viewed negatively, similar to how people talk about someone in a more urban community who doesn't mow their lawn. Also, Duffy says that less weeds this year means less weed seeds next year. Less weed seeds means less weeds to fight in the future.

A big factor in the decision to plant GM seed, according to Moriarty, as well as Duffy and Solberg, is convenience.

Roundup Ready soybeans and Bt corn both require less management. For example, to control weeds in conventional soybeans, farmers must apply herbicide at precise times: before planting, pre-emergence (after planting but before the seeds sprout); and post-emergence (when the soybeans are several inches tall). With RR soybeans, farmers can just till the soil, plant, and spray Roundup herbicide later. They don't have to time applications to protect the crop itself from the herbicide.

The motivations for growing Bt corn are similar. Rather than assessing how severe a corn borer infestation is, and whether they should spray pesticides, farmers have automatic protection with less intensive field management.

The labor savings are a significant draw for farmers. If the profit per acre is higher at a well managed farm planting conventional crops, the ability to farm more acres may allow some farmers to make more money overall. It may also be that less labor and management in the fields allows struggling farmers to take a job in town to make a living while still farming.

A final reason that many farmers have adopted biotechnology is that they are strongly driven to be the first to adopt a new technology.

A basic tenet of agricultural economics is that early adopters of new technologies are able to profit until the advance becomes commonly adopted by most other farmers. The source of this profit comes from either higher yields or lower costs on the micro-economic level. But once the new advance permeates the entire production sector, the aggregate effect is to increase supply and lower the overall market price to the detriment of farmers generally. At this point the early adopters have lost their advantage and all farmers suffer economically together.

In the case of biotechnology, the speed of penetration into production agriculture was tremendous. Even if GM crops increased yield or decreased costs -- and the evidence suggests otherwise -- there were few farmers who can be considered early adopters because adoption was almost instantaneous. Dr. Robert Taylor, an agricultural economist at Auburn University, says that, as a result, there were virtually no early adopter benefits.

The Propagandists

Whatever the farm economics and farmer psychology behind the rapid spread of biotech, the GM proliferation cannot be understood apart from the propaganda issued by industry, government, land grant universities, farm commodity groups and the agricultural media.

Ad campaigns directed at farmers reveal the type of energetic language that seems to appeal to many of them. These advertisements hit the media hardest in the winter and spring months when farmers have a lull and are focusing on the next crop season.

A recent four page, color advertisement by Asgrow (a Monsanto subsidiary) in Iowa Farmer Today promotes YieldGard brand Bt corn.

The Asgrow ad trumpets, "YieldGard -- Yield Gain." The corn seed evidently now has the "Advanced Trait System," an "innovative trait system [to give farmers] built-in weed, disease and/or insect protection in high-yielding Asgrow corn hybrids."

Big Biotech campaigns also include representatives, dealers and other company persons going out to speak to groups of farmers. These meetings are sponsored by a seed dealers for their customers, local grain elevators or county extension offices. The forums put the industry representative in a position to recommend options for farmers in managing their crop operation.

Big Biotech's control of information is manifested in the new seed catalogues -- promotional materials which are also a critical information source for farmers.

Every year, the seed companies print and distribute catalogues containing the varieties of seed which they have for sale. The catalogues contain information on each variety highlighting their specific strengths, including factors such as yield, drought resistance, strong stands, narrow or broad leaf canopies, as well as whether or not it is adapted to specific climates.

The ability of seed companies to alter the offerings in the seed catalogue -- i.e. promoting genetically modified varieties and discontinuing conventional seeds -- allows Big Biotech a powerful tool to direct farmers' purchases.

The U.S. government, which has poured billions into biotechnology, has echoed the propaganda of industry in selling GM dreams to the public. The government funds the agricultural land grant universities which similarly proclaim the alleged benefits of their biotech research.

Another source of industry propaganda is the farmers' own commodity organizations, including the National Corn Growers Association and the American Soybean Association. Most of these associations engage in lobbying, research and promotion related to their particular commodity.

Although farmers and ranchers formed the association and in theory control them, in fact big agribusiness interests have gained profound influence within many commodity groups.

Rod Thorson, ag radio broadcaster for WLPO radio in LaSalle, Illinois, says that two things happen when a farmer gets on the board of a commodity group: "The meals get better and the problems don't seem as bad anymore."

In the case of biotechnology, the National Corn Growers Association (NCGA) prides itself on being allied with the seed corn industry in carrying out its activities.

The powerful NCGA is central to the practice of making sure that industry, academia, government and producer association strategies in agriculture are coordinated.

For example, the Association sponsored a Roundtable on Genetically Enhanced Corn last June. The purpose was "to discuss biotechnology, enhance understanding of each stakeholder's position and lay a foundation of mutual cooperation." In the meeting, representatives from Big Biotech, academia and government compared notes and coordinated information to combat arguments against biotech.

The NCGA's communications machine is very extensive. With about 30,000 members, NCGA has direct access to farmers and is regularly quoted in ag trade journals.

The American Corn Growers Association (ACGA) has about 12,000 members. It is a much more independent producer organization which has not fallen into the trappings of partnering with industry. While ACGA is not against biotechnology per se, and values some of the insect and weed resistance traits, it is very concerned about the dominance of the concentrated biotechnology industry which threatens the livelihoods of its producer members. Because ACGA has not allied with industry, its financial and organizational resources are far less than that of NCGA.

The American Soybean Association (ASA) is similar to the NCGA. ASA claims to have between 31,000 and 34,000 soybean producer members -- a small minority of the several hundred thousand actual producers. It closely coordinates with big agribusiness. Its Corporate Partner Program includes sponsorships of a range of "leadership development" activities from American Cyanamid, DuPont, Monsanto, Novartis and AstraZeneca.

The formidable information, lobbying and communication structure utilized by the ASA and NCGA hinder the development of farmer opposition to biotechnology. Any farmers who may have questions are quickly confronted not only with industry rhetoric, but by propaganda and marginalization from the big commodity groups.

Finally, the agricultural trade media has been instrumental in pushing the interests of agribusiness, including Big Biotech, for decades.

"There is nothing fair or balanced about their coverage. They are lap dogs for transnational agribusiness," says broadcaster Thorson. "You usually see both the good and bad in other business papers. Not in agriculture."

Most farmers and ranchers receive agricultural publications whether they subscribe or not. And advertising revenues far exceed revenues from subscriptions in all agricultural papers, says Mychal Wilmes, editor of Agri News in Minnesota.

Many believe that relying upon advertising revenues affects news coverage.

It is "obvious" that agribusinesses have pervasive influence over the coverage in the trade press, says one ag reporter. It is not a "very well kept secret" that the coverage tone is different and less balanced, and is driven by ad revenue, and that agribusiness consolidation makes it harder to achieve balance.

The reporter, a long time agricultural journalist, says that it is "understood" in older publications that one must portray agribusiness favorably. New publications or newer reporters sometimes see more "direct communication" in that regard if they do not toe the line.

Farm Future

Farmers may be conservative, overly concerned with yield over profit and susceptible to propaganda, but they are not stupid.

Consumer rejection of GM foods -- especially in Europe, and increasingly in the United States -- is now being felt in the markets into which farmers sell. Farmers must segregate GM and conventional crops at the farm gate, and farmers are now facing the prospect of lower prices for the genetically modified crops.

As a result, far fewer GM crop acres are expected to be planted next year. No amount of propaganda will be able to obscure the reality of inferior prices for GM crops.

Deciphering the Monsanto "Technology Agreement"

With the rapid market penetration of genetic modified commodity crops has come a widespread new relationship between companies like Monsanto and hundreds of thousands of crop producers via the "Monsanto Technology Agreement."

Every time a farmer purchases Monsanto's Bt corn or cotton or Roundup Ready corn, soybeans or cotton, the Technology Agreement is signed. This boiler-plate contract imposes new obligations on farmers and has broad prohibitions on independent research into the risks and benefits of biotechnology.

Many seed companies have licensing agreements with Monsanto, which owns most Bt and Roundup Ready gene technology. These licensing agreements allow them the right to insert Monsanto's patented genetic modifications into the companies' existing hybrid varieties. This arrangement also allows Monsanto to insert itself into the huge revenue stream existing between farmers and the seed companies.

Farmers have purchased their seed from local cooperatives or seed dealers for decades. The farmer has a relationship with one or more seed dealers who recommend certain hybrid varieties which are most appropriate for that farmer -- depending upon soil conditions, climate and other factors. Seed catalogues, which are printed every year by seed companies, have significant influence on farmers' purchasing decisions.

The farmer usually chooses which seed varieties to purchase long before spring planting. The farmer "books" or orders the seed months ahead of time. When planting time comes, the farmer drives to the seed dealer and loads up the bags of seed to take home.

But if the farmer chooses GM seed, such as Bt corn or Roundup Ready soybeans, the seed dealer has the farmer sign a "Technology Agreement" before leaving. Usually without even reading the document -- and likely without understanding it -- the farmer signs the contract and goes home.

This is where Monsanto gets its cut. If the farmer buys non-GM hybrid seed, he or she must only pay the seed company for the seed. A bag of hybrid seed corn with 80,000 kernels costs about $60 depending upon the variety. A bushel of seed soybeans costs $15.

But if the seed is genetically modified, the farmers must additionally pay Monsanto a "technology fee" in the amount of $25 for corn and $5 for soybeans.

Monsanto not only gets money out of the deal, it extracts ongoing contractual obligations from the farmer. These contract terms restrict many rights the farmer used to have in a conventional seed transaction.

The same basic Technology Agreement covers Roundup Ready soybeans, corn and cotton as well as Bt corn and cotton. An analysis of the 1998 Monsanto Technology Agreement reveals several "Trouble Clauses" for farmers.

The first Trouble Clause is the "Terminator Clause" -- analogous to the "Terminator Gene" which has been developed to prevent grain harvested from crop seeds from reproducing the next year. The Terminator Clause takes away the farmer's right to save any of the crop grown from the seed for replanting during the next year.

The second Trouble Clause prohibits farmers from supplying seed to any other person.

This provision does more than block third parties from acquiring Monsanto's genetically altered seed without writing Monsanto a check. It also prevents and punishes those who may try to do independent research on the genetically modified crops without Monsanto's express permission. Friendly university scientists with a Monsanto relationship can gain access to seed for research -- but scientists who may be critical of biotech can and likely will be denied access.

The third Trouble Clause stipulates punitive damages for farmers who violate Monsanto's decrees. Farmers who save the seed for replanting must pay damages in the amount of 120 times the technology fee. This is $3,000 in the case of corn -- far more than Monsanto would likely be able to prove if it sought damages from farmers in court. This part of the contract further makes farmers pay Monsanto's legal fees and other costs of enforcement.

The fourth Trouble Clause requires farmers to provide Monsanto with the locations of all fields planted with Bt cotton and to "cooperate fully" with any of Monsanto's inspections.

This provision -- which applies only to Bt cotton -- also makes farmers provide Monsanto with invoices and access to all their cotton fields so Pinkerton detectives can determine whether farmers have planted any saved seed. In the absence of this contract provision, farmers would have the right to call the police or otherwise throw the Pinkerton detectives off their property for trespass.

The fifth Trouble Clause explicitly obligates farmers who purchase Roundup Ready corn, soybeans or cotton to also use Roundup herbicide, Monsanto's most popular and profitable ag product. The active ingredient in Roundup herbicide, glyphosate, is nearing the end of its patent protection period. The contract tie-in is an attempt to preserve a lock on the market and will prevent farmers from purchasing competing herbicides which may cost less.

The sixth Trouble Clause requires farmers to implement an Insect Resistance Management (IRM) Program when planting Bt crops. The IRM instructs that a certain percentage of a field or farm must be planted in non-Bt seed. This is called a reservoir.

The reason for this provision is that entomologists have determined that corn borer resistance to Bt crops is fleeting. Some pests within a population are resistant to Bt toxin and when they survive and breed, they create a newly resistant population. In a non-Bt reservoir, non-resistant bugs will still exist and can breed with resistant bugs to create non-resistant offspring. This, in theory, will delay widespread development of Bt resistant bugs.

Unfortunately, researchers are finding resistance developing faster than they previously thought.

There are widespread instances of farmers ignoring these insect resistance management recommendations. The company doesn't actively promote IRM except in the fine print of the contract. Monsanto has an incentive to sell all the seed it can and widespread use of reservoirs means foregone revenue. But the IRM contract clause gives Monsanto "cover" to deny responsibility for emerging Bt resistance.

The seventh Trouble Clause notifies farmers that grain produced from Bt corn may not be approved in export markets by harvest time and that farmers should be prepared to feed the corn on the farm or sell it for use only in domestic markets.

It is important to recognize that Monsanto promotional advertisements push its genetically modified crops with no caveats, and the company severely criticizes people who suggest that it is improper to plant them. But the European Union, a major export market for U.S. commodities, has not approved some Bt corn for import, although other genetically modified crop varieties have been approved.

This clause gives Monsanto cover because it enables the company to say it notified farmers of marketing problems even while its overwhelming public relations campaign obscures the issue.

-- M.S.

Michael Stumo is the general counsel to the Board of the Organization of Competitive Markets.

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