The rise and fall of Genetically Engineered Food

Boom to bust in 3 seasons

Origianted: (Jonathan Matthews)
Norfolk Genetic Information Network (ngin)

From boom to bust in three seasons - the rapid rise and fall of GE
Dr Christine Dann

1996 was the first year in which economically significant amounts of GE food crops were first grown in the world. Most of them were planted in the USA. By 1999 33% of US corn (maize) acres, 44% of soybean acres and 55% of cotton acres were planted with GE seed (St Louis Dispatch, 23.5.99). US farmers had obviously embraced the technology enthusiastically. Unfortunately for them, they did so largely in ignorance of the actual performance of GE seed, and of the market demand. They believed what the GE seed and agrochemical producers and suppliers told them about the agricultural and economic performance of their products. As the bullet point history of the rise and fall of GE markets given below proves - they were conned. Farmers in the rest of the world need to learn the lesson, and not be sucked into the brave new world of GE lies and half-truths.

The story of the fall of GE markets is woven from the threads of market manipulation, international trade regulation, consumer resistance, retailer initiatives, decline in investor confidence, and things going wrong down on the farm. It is difficult to separate the strands, as they all impact on each other. The following points trace these strands from the beginning of 1999, when the boom started to go bust.

January 1999

Monsanto lays off staff, its stock price falls, and it faces more lawsuits by farmers unhappy with the performance of its GE seed.
Swiss Re, a major reinsurance company, advises that insurance companies are 'over-exposed' to GE claims; Lloyds advises other insurance companies to charge special premiums to insure GE crops.
Monsanto is suing 525 farmers for planting its seed 'illegally', including a farmer who claims he did not plant the seed and that his crops were contaminated by wind-blown GE pollen.
A Time magazine poll finds that 81% of respondents want GE foods labelled.

February 1999

Major French supermarket chain, Carrefours, bans GE ingredients from own-brand food and removes other GE foods from sale. British supermarket chains Iceland, Sainsbury, Waitrose, the Co-Op, Marks and Spencer and Asda go GE free.

March 1999

A consortium of European supermarket chains (UK- Sainsbury and Marks and Spencer; France - Carrefours; Italy - Effelunga; Switxerland - Migros; Belgium - Delhainze; Ireland - Superquinn) is set up to jointly source non-GE foods.

April 1999

No new GE products have been approved by the EU since April 1998, and four new applications are deadlocked.
Greece has a total freeze on experimental and commercial growing of GE crops, other EU countries have partial bans on growing, selling and/or experimenting.
Unilever, the world's largest food manufacturer (annual turnover 35 billion pounds sterling) announces it is going GE free.
Nestlé and Cadbury-Schweppes go GE free.
The last large British supermarket not yet GE free, Tesco, goes GE free.
The GE free supermarkets in Europe now have considerable market power a joint annual turnover of $150 billion*
The third largest US corn processor, A.E. Staley Co, announces that it will refuse GE corn not approved by the EU

May 1999

Giant US agri-food company Archer Daniels Midland sets up GE-free elevators, announces that it wants farmers to separate GE and non-GE harvests at source, and offers a premium for non-GE soybeans.
Monsanto sets up a toll-free line to advise farmers which elevators will accept GE crops.
Commodity prices remain low, and economists warn that as surpluses grow, prices will fall.
Religious groups (Christian, Jewish, Hindu, Buddhist) sign on to a $30 million law suit against the US government, which demands that the Food and Drug Authority classifies genes used to alter foods as additives and tests them more rigorously.
The Supreme Court of India upholds a ban on testing GE crops.

June 1999

Northern Foods, one of the largest food companies in the UK, goes GE free, as do Walkers crisps and Kellogg's cereals.
Rank Hovis McDougall announces it will stop using GE soyflour in its breads.
By now 24 of the 30 largest food companies in the UK are GE free.
In Brazil a judge upholds the precautionary principle ands confirms a ban on planting and marketing GE soy.
EU Ministers for the Environment announce a factual ban on any new approvals for the commercial release of GMOs, until strict environmental standards can be set.

July 1999

A US Department of Agriculture survey of GE crop performance is released, and shows that yields are not consistently higher and may be lower, and that herbicide and pesticide use is not always less. Profits were also variable.
Three US baby food manufacturers go GE free.
American trust-busting lawyer David Boies (leader of the successful US Justice Department prosecution of Microsoft) announces that he is considering taking a case for farmers against the anti-competitive behaviour of the major biotechnology companies.
The Advertising Standards Authority in the UK upholds complaints against Monsanto for misleading claims about its GE products.
US agri-food giant company ConAgra buys a GE-free health food company, and takes ownership of several GE-free website names e.g.

August 1999

Deustche Bank investment analysts note that the GE market is going bust, and that premiums are being paid for non-GE not GE crops. They advise investors to sell their Pioneer Hi-Bred stock, and not to invest in GE stock generally.
US lobbying of foreign food regulatory agencies against labelling GE foods continues, and is successful in slowing down and watering down ANZFA proposals on labelling.
In Japan the two largest breweries go GE free; in Mexico a major tortilla corn chip manufacturer goes GE free.
US pet food company Iams stops using non-EU approved corn in its cat and dog foods.
A University of Nebraska survey finds that only 36% of rural Nebraskans favour using GE seed.

September 1999

As the US harvest comes in, mid-western grain merchants offer 20-30 cents premium per bushel on non-GE soybeans and 8-15 cents premium on non-GE corn.
Of 100 Midwestern grain elevators surveyed, 11% were segregating corn and 8% segregating soybeans.

October 1999

Thailand's Trade Minister (and WTO head-in-waiting) Supachai Panitchpakdi
announces an indefinite ban on importing GE seed to Thailand.
Monsanto stock has lost a third of its value in the past year.

November 1999

A bi-partisan bill requiring full labelling of GE foods and supported by 20 legislators goes to the US Congress.
The Alliance for Better Foods (ABF), a lobbying organisations consisting of US pro-GE food manufacturers and retailers, reports that in the first nine months of 1999 it spent $676,000 in contributions to US politicians.
Member companies of ABF spent a combined $43.3 million in campaign contributions during the 1998 US election cycle; Monsanto, DuPont and Novartis spent more than $6 million on lobbying in 1998.
US-based genetic analysis company Genetic ID claims Australia could earn a $1 billion share of the world GE-free food market if it moves judiciously on the issue.
The US National Family Farm Coalition, a coalition of small farmer organisations, issues 'The Farmers' Declaration on Genetic Engineering in Agriculture', which demands an end to the sale, environmental release and further production of GE seeds and agriculture products until an independent and comprehensive assessment of the social, environmental, health and economic aspects of these products has been made.
Uncertain about market prospects and crop handling requirements for 2000, US farmers are confused about whether to order GE seed, and many decide against it.

December 1999

Brazil, the world's second largest soybean producer, offers farmers $5.37 million in low interest loans to pull out GE soy seedlings and replant with non-GE varieties (as an alternative to burning illegal crops).
Brazil's exports of non GE soybeans to the Europe rose from 10,135 million tonnes in 1996 to 15,130 million tonnes in 1998; the USA's soy exports to Europe dropped from 8.854 million tonnes in 1996 to 6.572 million tonnes in 1998.
The value of US soy exports to Europe dropped from $2.1 billion in 1996 to $1.1 billion in 1999.
Britain's last Christmas with GE turkeys looms as UK supermarkets start sourcing meat, eggs and dairy products from animals that have not been fed GE grain.
American and British shareholders in major food companies such as Heinz, Coca-Cola, Safeway, Pillsbury, Burger King. ADM, Philip Morris, Sara Lee and McDonalds join a campaign co-ordinated by the Interfaith Center on Corporate Responsibility to get the companies to out a moratorium on GE ingredients and products until proper testing has been done.
Credit Suisse First Boston reports that the biotech industry is suffering from 'negative momentum' and compares it to the nuclear power industry - the science might be sound but no one is building new nuclear plants today.

January 2000

A Reuters straw poll of 400 US farmers at the annual meeting of the largest US farm organisation, the American Farm Bureau Federation, indicates a drop in GE food crops for 2000 - 15% less GE soy, 22-24% less GE corn.
Major US corn processor Frito-Lay tells its suppliers not to grow GE corn.
The UN Biosafety Protocol is signed in Montreal, and provides for stricter national and international controls on producing and trading in GMOs.
Deutsche Bank reports that biotech company stock is still a bear market, and the predicted two-tier market for GE and non-GE corn and soy has developed, with non-GE attracting the premium.

February 2000

Germany's Minister of Health suspends approval for Novartis Bt corn on the grounds that it is necessary to protect consumers and defend precautionary health protection.
Market rejection of Bt corn cost US farmers $200 million in lost export revenue in 1999.
Minnesota introduces a bill to place a moratorium on GE crop growing in Minnesota.
American soy farmers try and persuade Monsanto to refund the difference between the price of GE soy seed in the USA and Argentina - between $300-$600 million.
A survey of 1,200 US grain elevators estimates that 24% are planning to segregate GE corn and 20% will segregate soybeans in the fall of 2000 (up from 11% and 8% in 1999), and slightly more than one in ten elevators will offer a price premium for non-GE products.

March 2000

A group of transnational biotech industry companies (DuPont, Monsanto, Dow Chemical, AstraZeneca, Aventis, BASF, Novartis, and other smaller companies) award a $50 million contract to PR firm BSMG Worldwide to develop and run a 3-5 year advertising and communications campaign to promote GE foods as safe for humans and not harmful to the environment.
Top American chefs start ridding their restaurants of GE foods.
American corn farmers advise their Filipino counterparts not to grow GE corn.
A European Union Directorate-General for Agriculture study of the economic impacts of GE summarises American studies which show that GE crops exhibit variable profitability, and that profitability depends on market as well as farm conditions, hence the future profitability of GE is hard to predict. It also notes that GE soybeans attract the same subsidies (aka flexibility payments, marketing loans and crop insurance) as non-GE beans, and that marketing loan benefits averaged 44 cents a bushel in 1998. Oilseed producers are also likely to be eligible for emergency payments averaging 14 cents a bushel in 2000 to offset record low market prices.

April 2000

A major Coca-Cola shareholder (William Wardlaw III, with 2,020,682 shares worth $98 million) sponsors a resolution for Coke to go GE free.
US farmers start to report GE plants appearing as weeds in their fields.
First US supermarket chain - Genuardi's Family Markets - goes GE-free and supports labelling of GE products.
US Department of Agriculture predicts a 25% drop in GE corn harvest.
GE papaya grown in Hawaii is rejected by Japanese, Canadian and European markets; growers get a 300-700% premium on non-GE fruit.
McDonalds burger chain stops using GE french-fries, and McDonalds suppliers instruct growers to stop growing GE spuds.
Frito-Lay stops making GE potato chips.
Burger King reassures customers that it does not use GE French-fries

May 2000

Archer Daniels Midland offers 18 cents per bushel premium on a non-GE variety of soybean.
The Tokyo Grain Exchange launches a non-GE soybean futures market.

June 2000

310 scientists from developed and developing countries sign a letter to delegates to the fifth Conference of the Parties on the Convention on Biological Diversity in Kenya calling for an immediate suspension on the release of GE crops and products for at least five years, and for all patents of living processes, organisms, seeds, cell lines and genes tobe revoked and banned.
A major independent worldwide research study by Angus Reid Group on consumer reaction to GE foods finds that opposition to GE foods has risen to 51% of consumers in the USA, 59% in Canada, 71% in France, 73% in Germany and 82% in Japan. Opposition to GE foods is higher in countries where respondents feel they understand more about genetic engineering of food and lower in countries where consumers feel they do not know much and need to know more.
GE canola in Canada found to be resistant to three commonly-used herbicides as a result of crossing in the field, adding to the growing problem of herbicide resistance.
The US National Science Foundation's Science and Engineering indicators survey finds that well-educated Americans (college graduates) are more likely to oppose GE than the poorly educated, and that women are more likely to be sceptical about GE than men.
Canadian farmer Percy Schmeiser, sued by Monsanto for allegedly planting its GE canola illegally, countersues demanding 4.2 million pounds sterling compensation for trespass, crop contamination and defamation.
A survey of US corn growers shows that over half are concerned that they will be held liable for contaminating non-GE crops through cross-pollination, and over two thirds are concerned that they will have to bear the costs of segregating GE from non-GE corn and will plant less GE corn if they have to segregate.
Swedish pharmaceutical company Pharmacia buys Monsanto and tries to sell off the agricultural (GE seed) division.
The Prime Minister of New Zealand says that, contrary to the claims of industry and the Australian Prime Minister, a KPMG study shows that full labelling of GE foods would add only 0.19% to the total food bill.

July 2000

A US Department of Agriculture survey suggests that GE acreage in 2000 is down from 1999 - 20% for corn and 6% for soybeans.
The Tokyo Grain Exchange non-GE soy futures market booms, with almost three times as many non-GE contracts being traded as GE ones. Prices for the non-GE beans are 9-10% above GE beans.
Non-GE papaya growers in Hawaii start labelling their fruit 'Not Genetically Modified' to take advantage of non-GE premiums running as high as 700%.

All dollars quoted are US dollars, unless otherwise stated.

Information in this history comes from media releases, research reports and other documentation posted on the following website addresses:

A fully referenced paper incorporating this information and containing further analysis of global food markets will be available in November 2000.
From boom to bust in three seasons - the rapid rise and fall of GE markets
Dr Christine Dann for the Green Party of Aotearoa New Zealand