New genes meet a wary market

American farmers know uncertainty. Weather shrivels their crops. Surpluses squeeze their margins. But at least in the good old days - circa 1998 - there was one thing they could count on. If they harvested a crop, they could always sell it at some price.

No longer.

In the brave new world of genetically modified agriculture, farmers worry nobody will buy their newfangled crops. That's because safety concerns, already prevalent in Europe, have crossed the Atlantic and created a backlash that could end - or at least delay - the biotechnology revolution that promised to transform American agriculture.

But a transformation is taking place nevertheless. And if it doesn't exactly match what biotech companies envisioned, it is turning the agriculture industry on its head.

Instead of pushing tons of generic corn onto the world's plate (or cattle trough, more likely), US agriculture stands on the threshold of tailoring its offerings to meet specific demands around the world. Biotech had long promised this switch from commodity industry to boutique business. But today's market isn't differentiating among genetically modified organisms (GMOs). It'sdistinguishing between GMO and non-GMO food.

Most galling of all to biotech companies: After spending tens of billions of dollars on research, their fanciestengineered seeds are not the ones fetching premiums in the marketplace. It's their older, more traditional varieties attracting the attention.

Differentiation "can't be stopped," says Allen Andreas, chief executive officer of food-processor Archer Daniels Midland in Decatur, Ill. "There's going to be a market for GMOs; there will be a market for non-GMOs."

Already, strange new terms are popping up in farm country, such as "segregation" and "identity preservation." The idea is that farmers, elevator operators, and shippers would separate GMO and non-GMO crops to such an extent that they could certify certain lots as "GMO-free."

If the idea catches on, it would radically alter the nation's grain-handling system. Built to deal with single streams of bulk crops, the infrastructure would require big investments from the type of storage on the farm to the trucks and barges that deliver the grain.

"We can't afford to put up a new handling facility," says Jim Liesman, manager of Farmers Grain and Coal Co. in Mason City, Ill. "You are looking at a half-million dollars to put in a new leg and that wouldn't be a big facility."

Segregation of crops

No one knows how far "segregation" will go. "The message of the marketplace is: 'Be cautious,'" says James Stitzlein, manager of market development for Consolidated Grain and Barge Co., a New Berlin, Ill., concern that is already segregating some crops and offering a small premium.

"Everybody's walking that tightrope," says Doug Eggeman, manager of Central Soya's elevator in Jeffersonville, Ohio. This fall he experimented by offering a 10-cent-per-bushel premium to producers who could certify their soybeans were non-GMO. The plans aren't set for next year.

The uncertainty shudders up and down the industrial food chain. Biotech seed companies forecast that they'll sell a little less to a little more GMO seed for the coming year. "If nothing happens between now and planting, we do expect farmers will be planting more [GMO crops] than last year," says Monsanto President Hendrik Verfaillie.

But the possible growth will be nowhere near the spectacular climb of the past four years. Bio-engineered corn went from 1 percent to better than one-third of America's entire corn crop; soybeans went from 0 to nearly 60 percent of the total soybean crop.

Food companies also worry about the backlash against GMOs worldwide. "Concern is growing," says Cathryn Mattson, director of government affairs for Bestfoods Inc. in Englewood Cliffs, N.J.

Japan will require labeling of GMO foods starting April 2001. Several Asian countries are considering GMO guidelines. The European Union, site of several food scares in recent years, already requires that products containing genetically modified corn or soybeans carry labels.

The US could follow suit. This fall, baby-food makers Gerber and Heinz announced they would not accept GMO ingredients. And US Rep. Dennis Kucinich (D) of Ohio has introduced a bill that would require GMO food to be labeled.

Bestfoods supports GMO foods as safe. But the company (maker of Skippy peanut butter and Mazola corn oil) reformulated its European products after several grocery chains began refusing to carry GMO foods.

"We are in the business of selling food," says Ms. Mattson. "We are not in the business of championing a particular technology."

All this leaves farmers in their own quandary. This is the time of year when they typically order seed for the coming year. Will they buy GMO seed?

Dilemma on the farm

The signals are mixed so far. Some dealers report fewer sales of GMO seed, but it depends on where farmers live. Those in central Illinois, who sell to food processors whose GMO concerns are high, are still unsure what to do. "I haven't made the decision yet," says Steve Stahl, a corn and soybean farmer in Sangamon County. "Everyone is kind of passing the buck."

Farmers in other parts of Illinois see little threat if they plant GMO crops for the immediate future. Richard Showalter, in Mason County, expects to use GMO seed for half his corn crop year - a little lower than in 1999. "I'm hedging my bet."

But the calculations aren't always obvious. GMO crops, particularly herbicide-resistant soybeans, are so much cheaper to produce than traditional ones that Jay Frye, also of Mason County, says he'd need a big premium - 25 to 40 cents a bushel - to make GMO-free soybeans an economic option.

(c) Copyright 1999. The Christian Science Publishing Society