Reinvigorating Genetically Modified Crops

In August 2002, government officials in the United States were shocked when Zambia, which was on the verge of a major food crisis, began to refuse the import of free U.S. corn as food aid, because some of that corn might be “genetically modified” (GM). This was the same corn that U.S. citizens had been consuming and that the United Nations World Food Programme had been distributing in Africa–including Zambia–since 1996. In short order, three other countries facing possible famine in the region–Zimbabwe, Mozambique, and Malawi–also decided to reject U.S. corn as food aid unless the corn was milled to prevent it from being planted. As a reason for their refusals, Zambia and the other countries cited the fear that if any GM corn imported as food aid was planted by farmers instead, they would lose their current status as “GM-free” countries, as designated by importers in the European Union (EU). This loss, the governments worried, would compromise their ability in the future to export crops and foods to countries in the EU, where GM products are unpopular and more tightly regulated.

The United Nations was able to replace most of the rejected corn shipments to Zambia with non-GM corn from Tanzania and South Africa, but not before hardships in the country increased. As but one sign of such hardship, in January 2003 some 6,000 hungry people in one rural town overpowered an armed police officer to loot a storehouse filled with U.S. corn that they heard the government was soon going to insist had to be taken out of the country.

These events persuaded trade officials in Washington that the more restrictive GM-food policies that had taken hold in Europe were now a threat not just to U.S. commercial farm commodity sales but also to the efficient international movement of food aid for famine relief. The United States renewed calls for the EU to relax its regulatory and import restrictions on GM crops and foods. U.S. officials pointed out that scientists in Europe had been unable to find any evidence of added risk to human health or the environment from any GM crop variety developed to date. For example, in 2001 the EU Commission for Health and Consumer Affairs released a summary of 81 scientific studies of GM foods conducted over a 15-year period. None of the studies–all financed by the EU, not private industry–found any scientific evidence of added harm to humans or the environment. In December 2002, the French Academies of Sciences and Medicine drew a similar conclusion in a report that said that “there has not been a health problem–or damage to the environment” from GM crops. This report blamed the rejection and over-regulation of GM technologies in Europe on what it called a “propagation of erroneous information.”

Early in 2003, the United States moved closer to bringing to the World Trade Organization (WTO) a formal challenge of EU regulations regarding GM foods and crops, particularly a five-year EU moratorium on new GM crop approvals. But the immediate chance of success is poor. Although the United States has a solid scientific and legal case, the political and commercial foundation for challenging the EU on these products is currently quite weak. Even if the United States wins such a challenge, the likely result will be no change in EU regulations and a continued spread, into the developing world, of highly precautionary EU-style regulations on GM foods and crops.

This outcome would not necessarily be a calamity for U.S. farmers. It might only mean turning the clock back to 1995, the “birthday” of the first GM crop, and returning to the use of non-GM seeds by corn and soybean farmers. U.S. farm income likely would dip slightly, because production costs would increase as the need for insecticides and herbicides increased, but farmers would adapt. The situation would be more problematic for the big corporations that originally developed GM crops, as they would lose expected returns on their major investments in research and development.

But should Europe’s precautionary principle spread internationally, the biggest losers of all will be poor farmers in the developing world. If this new technology is killed in the cradle, these farmers could miss a chance to escape the low farm productivity that is helping to keep them in poverty.

Poor farmers in tropical countries are facing unsolved problems from crop pests, crop disease, low soil fertility, and drought. This is one reason per capita food production in Africa has been declining for the past 30 years. Since 1975, the number of malnourished children in Africa has more than doubled, reaching 30 million. Fifty million Africans suffer from vitamin A deficiency, and 65 percent of African women of childbearing age are anemic. Two-thirds of all poor and poorly fed Africans are farmers; for them, increased farm productivity would be the best escape from poverty and hunger. GM technologies hold considerable promise for these people. Maize farmers in Kenya, who now lose 45 percent of their crop to stem borers, could be helped if given the chance to plant currently available GM maize. Cowpea farmers in Cameroon, who lose more than half of their crop to pod borers and weevils, could be helped if given the chance to grow GM cowpeas. Moreover, it might soon be possible to use new recombinant DNA techniques to provide these farmers with even more desperately needed drought-resistant or nitrogen-fixing food crops.

In light of the promise of GM crops, the United States should modify its approach to dealing with current EU restrictions. A number of steps may help reverse the regulatory tide that now is preventing GM food and feed crops from reaching the poor farmers in greatest need.

Hurdles to growth

Today, 99 percent of the world’s plantings of GM food and feed crops are restricted to just four countries–the United States, Canada, Argentina, and (illegally) Brazil. This reflects, more than anything else, a globalization of Europe’s highly precautionary regulatory approach toward GM technology. There are four primary channels of influence through which this European triumph is now taking place: intergovernmental organizations (IGOs), development assistance, nongovernmental organizations (NGOs), and international food and commodity markets.

Intergovernmental organizations. It is not surprising that European influence dominates within most of the IGOs that deal with GM foods and crops. European governments work hard to maintain and develop their influence within IGOs, whereas the U.S. government too often ignores or disrespects these groups–by failing to pay dues on time, failing to send high-ranking delegations to IGO meetings, or failing to ratify agreements. Thus IGOs that should be promoting GM crops are not doing so, and IGOs that are regulating GM crops are doing so in the manner Europeans prefer. For example, the United Nations Food and Agriculture Organization (FAO), the Consultative Group on International Agricultural Research (CGIAR), and the World Bank should be promoting GM crops because these organizations are production-oriented and pro-technology, as well as traditionally supportive of the United States. But U.S. financial support for and diplomatic attention to these bodies has weakened in the past decade, so in the current climate of European misgivings toward GM crops, the organizations have all backed away from promoting such technologies.

The FAO now mostly provides advice on how to regulate GM technologies, not on how to shape their development or promote their use. The FAO’s director general has even stated publicly that GM foods are not needed to meet the UN’s objective of alleviating world hunger by 2015. The United States, which has been delinquent in paying its dues to the FAO, has lost influence within the organization. At an FAO summit in 2002, U.S. officials pressed for an endorsement of GM crops, but the best the organization could come up with was an endorsement of what it called “new technologies including biotechnology.” By using the word biotechnology instead of referring specifically to genetic modification, the FAO signaled its discomfort with GM crops.

The CGIAR, whose stated goals include “promoting cutting-edge science to help reduce hunger and poverty,” also has backed away from GM technologies. It is true that one of the group’s units, the International Rice Research Institute (IRRI) in the Philippines, is supposed to be developing “golden rice,” a GM crop that may offer benefits to growers and consumers alike. But IRRI recently decided not to conduct any field trials of any GM rice in the Philippines, for fear that they would stir up the anger of local NGOs opposed to GM crops, and only two of the institute’s 800 scientists are still working on this project. Indeed, the current CGIAR annual report makes only one reference to GM crops–and even this refers to the regulation of possible biosafety threats from such crops, not to possible benefits. Such reticence in championing this new technology is again no surprise, given that European financial contributions to the CGIAR are now twice as large as contributions from North America.

Paralysis has struck the World Bank as well. Several years ago, the Bank set out to draft a strategy document on GM crops, but political opposition at the highest levels prevented the document–as bland as it was–from ever gaining official approval. The Bank’s current strategy is not to promote GM crops, but to study them. In late summer of 2002, the World Bank announced a three-year global consultation process to examine the “possible benefits” of this new technology and also the alleged drawbacks–an approach designed to avoid criticism from Europe.

Even as the IGOs that should be promoting GM crops are failing to do so, a number of equally powerful IGOs are taking a distinctly European approach to regulating this new technology. For example, the United Nations Environment Programme (UNEP) has now redirected some of its funding to helping developing countries draft precautionary biosafety regulations for GM crops. UNEP wants such regulations to be in place before these countries begin any planting of GM crops, no matter the delay or administrative cost this might entail. UNEP also helped to negotiate the new Cartagena Biosafety Protocol, developed in 2000 as part of the Convention on Biological Diversity (CBD). This protocol explicitly endorses a “precautionary approach” to GM technologies and allows governments to limit imports of living GM crops and seeds, even without scientific demonstration of a specific risk to the environment. U.S. influence over the negotiations was diminished because the Senate had never ratified the original CBD. Thus U.S. officials could participate in the protocol negotiations only as “observers”–not a good way to influence the outcome.

Development assistance. The United States at one time financed development assistance generously, in part hoping to influence policies in poor countries, but such assistance programs have withered since the end of the cold war. This is particularly true for agriculture. Between 1992 and 1999, support for agricultural development from the U.S. Agency for International Development (USAID) fell by more than 50 percent. In Africa, the United States largely withdrew from such work, closing USAID missions and sending agency personnel home. Meanwhile, European donors remained very much on the scene, ready to advise African governments on how to regulate GM crops. The Dutch, Danes, and Germans remained active, consistently advocating for ratification of the Cartagena Biosafety Protocol and formal adoption of the precautionary principle. Developing countries were warned not to plant GM crops until precautionary biosafety screening procedures were fully in place.

This influence has fostered the import of European-style regulatory systems, even though the capacity of many developing nations to implement such complex biosafety screening procedures is often relatively low. The practical result has been regulatory paralysis. Once complex biosafety screening requirements have been written into the laws of poor countries, cautious politicians and bureaucrats discover that the safest thing, politically, is to approve no GM crops at all. Approving nothing is the best way to conceal a weak technical capacity to screen GM technologies on a case-by-case basis, and it is a good way to avoid criticism from outside groups and the media.

Indeed, in all of Africa, not a single country other than South Africa has yet approved any GM crops for commercial planting. In all of developing Asia, only the Philippines has approved the planting of any major GM food or feed crop–no rice, no soybeans, no corn. Only one industrial crop–called Bt cotton–has been approved, and that only in a few Asian countries. This variety has been modified to contain a gene from the bacterium Bacillus thuringiensis, or Bt, that produces a toxin that kills bollworms, the crop’s major pest.

Nongovernmental organizations. European-based environmental and anti-globalization NGOs have invested heavily in efforts to block GM food technologies. These groups were instrumental in prompting the EU in 1998 to impose a moratorium on new GM crop approvals, and they now are working to prevent approvals in the developing world. Greenpeace, for example, has invested $7 million to stop genetic engineering, focusing particularly on developing countries that have not yet approved any GM crops.

Of course, private biotechnology companies–such as Monsanto, the U.S.-based firm that developed many of the first GM crops–spend a lot more than this to promote the spread of GM crops. But NGOs go beyond paid media campaigns; they also employ direct actions, street protests, and lawsuits to generate free media attention. Lawsuits, in particular, have emerged as a proven method for delaying the introduction of GM crops in poor countries. In 1998, Monsanto thought it had won official approval in Brazil for five varieties of Roundup Ready soybeans, which can withstand applications of the herbicide Roundup used to kill troublesome weeds in soybean fields. But a local consumer NGO and the Brazilian office of Greenpeace filed a lawsuit and found a sympathetic federal court judge to issue an injunction that stopped the approval. This case remains caught up in the Brazilian court system, so planting GM seeds in the country remains illegal, even though farmers there have been eager to do so–and, indeed, are illegally smuggling in GM seeds from Argentina.

NGOs also were instrumental in convincing Zambia not to accept GM products for humanitarian food relief, even though 2.5 million Zambians were hungry and at risk of famine. Political leaders were frightened away in part by campaigns conducted by such groups as Action Aid, from the United Kingdom, and the Dutch branch of Friends of the Earth. Following its initial refusal of U.S. corn, Zambia reaffirmed the import ban on GM food aid in November 2002, after a team of government experts consulted with a number of outside organizations–notable among them European NGOs deeply opposed to GM technologies. They also heard negative views from the British Medical Association, which had no evidence of any added health risks from GM foods but was clinging to a position it had taken three years earlier that the technology had not yet been sufficiently tested for all hypothetical risks.

Frustrated with this crisis, U.S. officials late in 2002 asked the European Union and the World Health Organization (WHO) to reassure officials in Zambia that there was no scientific evidence of risk from the corn being offered and to remind the Zambians that even EU regulators had given food-safety approvals to several varieties of GM corn and soybeans. But the EU responded at first by claiming this was a matter between the United States and Zambia. The WHO also disappointed the United States when its director-general, addressing a group of health ministers from southern Africa, said that the GM corn was “not likely” to present a risk.

International markets. Many observers originally assumed that once the United States began growing GM food and feed products, the technology would quickly become pervasive. The United States is the world’s biggest exporter of agricultural goods, so these products would have to be accepted worldwide. That was the wrong way to look at the matter. In international commodity markets, the big importers, not the big exporters, usually set standards–and the biggest importers are Europe and Japan, which together import $90 billion in agricultural products annually. Europe imports 75 percent more food and farm products from developing countries every year than the United States does. Accordingly, developing countries that aspire to export farm products must pay close attention to European consumer preferences and import regulations.

If it were only consumer opinion in Europe that mattered, then nobody could really complain, since that would be a free market outcome. But this is not the case: European consumers have shown that they are willing to pay small premiums in the market for GM-free food, but only small premiums. Rather, the problem is the increasing variety of EU regulations and policy actions that are keeping GM products from the shelf. It seems that European officials, having under-regulated mad cow disease, dioxin contamination, and hoof-and-mouth disease, are hoping to restore their credibility, in part, by over-regulating GM foods.

One major concern centers on the EU’s plans to implement, by late 2003, new regulations covering the tracing and labeling of GM products. These regulations go beyond the informal EU moratorium on new GM biosafety approvals, implemented in 1998, a policy that has required an import ban on any bulk commodity shipments from the United States that possibly might contain unapproved GM varieties. The EU says that it is enacting the traceability and labeling regulations in order to facilitate lifting the approval moratorium, arguing that EU consumers, political leaders, and anti-GM activists may be less likely to object to new GM crop approvals if such rules are in place. But under the rules, any developing country hoping to export farm products to Europe may be compelled to remain GM-free.

Mandatory GM labeling will now apply not only to human foods but also to animal feed, and even to processed products where there is no longer any physically detectable GM content. Even more troublesome will be the traceability regulation, which will oblige every operator in the food chain to maintain a legal audit trail for all GM products, recording where they came from and where they went. The intent is to facilitate enforcement of the new labeling rule and also to allow quick removal of any product that might prove to be unsafe. In Europe, where farmers do not grow GM crops, this will mostly be a paperwork exercise. But for GM-crop-producing countries such as the United States, the regulation will force exporters to start segregating GM from non-GM corn and soybean products throughout the food chain, from farm to fork. At the very low threshold of contamination to be permitted under the EU regulations (shipments must be 99.1 percent free of any GM content to escape being labeled and covered under the regulation), this segregation process will raise the export price of the U.S. corn and soybean shipments in question. Fearing either loss of access to Europe or loss of competitiveness, U.S. farmers might eventually have to retreat from planting GM seeds.

U.S. trade officials argued for a softening of these new regulations, hoping to reduce their likely impact on U.S. exports. They asked that the threshold of permitted contamination be raised and that labels be required only if some GM content is physically detectable. They also called for a provision that labels need only state that products or shipments “may contain” certain genetically modified crops, rather than having to say exactly which GM crops they contain. But these requests found little support when the EU Councils of Agricultural and Environmental Ministers approved the new regulations late in 2002. Only the United Kingdom appeared ready to call for any weakening of the regulation. At the other extreme, the French wanted labels not only on all processed GM foods but also on meat from animals that have been fed GM crops, and even on pet foods that contain GM ingredients.

The United States believes that both the moratorium on new approvals of GM products and the traceability and labeling regulations violate several WTO agreements. The moratorium, for example, violates the Sanitary and Phytosanitary agreement, which calls for all such regulatory actions to be based on firm assessments of scientific risk–and even EU officials admit that there is no scientific evidence to justify the moratorium. The United States has threatened to challenge the moratorium in the WTO for the past four years, and in January 2003 the nation’s chief trade representative announced that he personally favored bringing such a case in the near future. But since the new regulations have not yet taken effect, no formal challenge is possible in the WTO at the moment.

If U.S. officials do pursue WTO cases against these regulations, the result will probably be more frustration. The United States could win legally but lose politically and commercially. The WTO can be useful at times for pressuring the EU into scaling back trade distortions linked to traditional farm subsidies. But for scaling back trade impediments linked to consumer food safety fears, the WTO is a weak instrument. U.S. officials have already experienced the limits of the WTO’s dispute-settlement powers in recent cases regarding hormone-treated beef. The United States won (twice) in the WTO but still failed to open the EU market to such beef. The hormone ban was popular with consumers in Europe and had been endorsed by the European Parliament, so the EU decided to comply with WTO rules by paying the United States an annual fine rather than lifting the ban. Therefore, even if the United States were to prevail in challenging the GM-food regulations, there is little guarantee that U.S. food sales to Europe would increase. The EU might simply decide to pay a fine, or consumers might still shun GM foods.

It seems almost certain, then, that the regulatory movement in Europe toward tighter restrictions on GM imports will continue, and agricultural exporters worldwide know this. Indeed, fear of losing exports to Europe already is slowing down this technology even in some strongly pro-GM countries, such as Argentina. Since 1998, Argentina has made it a policy not to approve any new GM varieties until they have been approved for import into the EU. China, another early GM enthusiast, has similarly decided to hold back on approving the commercial planting of GM maize, soybeans, or rice. China began its slowdown after importers in the EU turned away a shipment of soy sauce made in Shanghai from U.S. soybeans that might have had a GM origin. Even the United States and Canada are slowing development of some new GM crops, such as GM wheat, for fear of losing export sales of wheat or flour.

Steps for U.S. action

U.S. officials have so far struggled to find useful short-term options for slowing the spread of EU-style regulations to the developing world. The best approach now will be to put aside past failures and to adopt a longer-term strategy that rests on a fundamental belief in the ultimate promise of genetically modified crops.

One such approach would be to begin investing more public money in the development of GM technologies specifically tailored to the needs of poor farmers in tropical countries. The United States made a mistake in the 1980s when it began skimping on public investments in the development of GM crops and entrusted this job so completely to the private sector. U.S. companies responded by developing a first generation of GM crops designed mostly to please wealthy commercial farmers in the United States and other temperate zone regions.

It was thus relatively easy for anti-GM activists in Europe and elsewhere to oppose the first GM products, such as Monsanto’s herbicide-tolerant soybeans. The corporate motive (in Monsanto’s case, to facilitate sales of its Roundup herbicide) was transparent, and few poor farmers in the semiarid tropics can grow soybeans. It would have been far more difficult for activists to build a political consensus against GM crops if the first products had included an insect-resistant or disease-resistant variety of cassava or cowpea. But private companies have few incentives to produce such varieties for poor farmers, so this is a job that must be done through public research institutions and international assistance agencies. This kind of public leadership was key to ushering in the Green Revolution of the 1960s and 1970s, which brought high-yielding wheat and rice varieties to poor farmers throughout Asia. To hope that a comparably successful Gene Revolution could be launched in poor countries without stronger public leadership was a mistake.

It also may prove fruitful, facing a momentary blockage of GM food and feed crops, to refocus on the spread of a key industrial GM crop–Bt cotton. Farmers in South Africa, China, Indonesia, and India have all been allowed by national biosafety regulators to plant Bt cotton, and all report satisfying results in terms of lowered production costs, less bollworm damage, and reduced occupational exposure to hazardous insecticide sprays. With luck, the continued success of Bt cotton in these countries will eventually whet the appetite of their policymakers for comparable GM gains in the food and feed crop sectors. Should this happen, national biosafety regulators may then feel more confident in their ability to approve GM corn, rice, and other staple crops.

Approval will be even more likely if, by then, the GM varieties under consideration have emerged from publicly funded national or international scientific institutes, rather than from corporations in the United States or other industrial nations. National research institutes in China and India are currently developing precisely such technologies. At some point, the potential domestic farm productivity gains from approving GM food and feed crops in these countries will outweigh possible loss of future export sales. What practical steps might the U.S. government take in the meantime to preserve space for a future GM crop revolution in the developing world? A first step is to restore the level of U.S. assistance to international organizations devoted to agricultural research and development. Governments in the developing world will pay more attention to the U.S. position on GM crops if it is perceived as part of a more generous overall development assistance posture. In March 2002, President George W. Bush proposed a 50 percent increase–an additional $5 billion–in annual U.S. core assistance to developing countries, to be administered through a Millennium Challenge Account. Later that year, the USAID issued a report that proclaimed “getting agriculture moving” as one of its key interests–and added plainly that “U.S. leadership can help in restoring budgets of the agricultural research system.” If Congress heeds this message in 2003, and if U.S. contributions to international agricultural development and research are indeed restored, then U.S. influence over the range of technological choices open to developing countries can perhaps be restored as well.

In addition, U.S. officials need to become more adept at giving voice to the expressed needs and desires of farmers, scientists, and officials from the developing world. If presented from a U.S. perspective only, the international case for GM crops is inherently hard to make. If instead the views and positions of struggling farmers in the developing world are presented, the case becomes difficult to deny. Small farmers growing GM cotton in China, India, and South Africa already are testifying to the great benefit this crop provides in terms of added income and improved occupational and environmental safety. This testimony needs to be heard. So, too, does the testimony of agricultural scientists in stakeholder countries. Professor James Ochanda, a Kenyan biotechnologist and chair of the African Biotechnology Stakeholders Forum, told a European audience in January 2003: “We do not want to be a pawn in the transatlantic trade squabble. We have our own voice and want to make our own decisions on how to use this new technology.”