The rise and fall of Genetically Engineered Food
Boom to bust in 3 seasons
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
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.
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.
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.
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
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
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
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.
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
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.
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
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. no-gmo.com.
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.
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
Of 100 Midwestern grain elevators surveyed, 11% were segregating corn
and 8% segregating soybeans.
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.
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.
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
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
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
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.
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
American soy farmers try and persuade Monsanto to refund the difference
between the price of GE soy seed in the USA and Argentina - between
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.
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
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
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
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.
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.
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
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