Posted on 20-7-2002

Learning From US Agri Experience
by Robert Schubert, CropChoice editor (USA)

(July 17, 2002 -- CropChoice commentary) -- Half a million bucks sounds
like a lot of money, but just how far would it go in dealing with a load of
genetically contaminated wheat? Grain traders I've talked with are fairly
certain that Monsanto's lawyers know the answer better than those
representing Spring Wheat Bakers.

A couple of weeks ago, this cooperative of nearly 3,000 wheat growers in
Montana, the Dakotas, and Minnesota announced a pact with Monsanto. The
plan is for the cooperative to use that $500,000 to develop a closed system
of growing, harvesting and processing Roundup Ready wheat, genetically
engineered to resist the Roundup herbicide. Monsanto wants to
commercialize it in the next couple of years. Spring Wheat Bakers had an
identity preservation system, designed to ship various specialty spring
wheat varieties to Europe. It flopped. The cooperative canned the
initiative almost two years ago because the Europeans were unwilling to pay
the associated premiums. Todd Leake, a co-op member, says that when he
pressed Gary Lee about the issue at a meeting in the spring of 2001, the
former chief executive of the cooperative told him that the "looming
introduction" of genetically modified wheat was a factor in the Europeans'
decision.

Now the idea is to resurrect this segregation system, not to ensure the
integrity of high value spring wheat, but to contain Roundup Ready wheat. A
few considerations are in order.

One, the Europeans, Japan, South Korea and other major customers for U.S.
wheat don't want genetically modified varieties.

Number two, containing this or any other transgenic wheat would be nearly
impossible. Speaking at last week's meeting of the North Dakota Interim
Agriculture Committee, University of Manitoba geneticist and wheat breeder
Anita Brule-Babel told the assembled state legislators that if Roundup
Ready wheat were planted widely, it could very well spread beyond control
within 5 years. She has first hand experience with Roundup-resistant
canola in Canada, where growers of conventional and organic canola have had
to give up on the crop because of genetic contamination.

Number three, Monsanto assumes none of the liability, as a quick reading of
a grower agreement will show, says Sarah Vogel, a Bismarck lawyer and
former state commissioner of agriculture. "Any farmer that grows Roundup
Ready wheat has signed a deal with Monsanto," Vogel says. "In its
contracts, Monsanto disclaims every oral representation that it makes about
these products, including their merchantability."

Despite the potential market disaster this wheat could wreak, legislators
appear unwilling to place a moratorium on it. That suits Monsanto just
fine. The biotech behemoth needs a new product and quick. Its stock is in
the tank. Plus, Pfizer wants to buy its parent company, Pharmacia.
Consequently, the pressure undoubtedly is on for Monsanto to spin off more
quickly than it had planned. With all that in mind, one might wonder
whether Monsanto is trying to shift some future liability to Spring Wheat
Bakers, whose essence is those 3,000 farmers. Let's say samples of a
30,000-ton shipment of conventional wheat, worth about $4 million, going to
Europe test positive for the Roundup Ready genes. Would that mean that
Spring Wheat Bakers accepted $500, 000 to take on a $4 million liability?
Someone would lose money. The grain trade certainly wouldn't take the hit.
The industry has been down this road before with biotech soybeans and, of
course, StarLink corn. No, it'd simply reject the wheat. That would leave
all the farmers who lost the value of their crop to go banging on
Monsanto's door. Its lawyers' answer: "Hey, the agreement was with Spring
Wheat Bakers."

Where to next? The insurance companies would have high-tailed it long
before. Would the management of the cooperative take out a $3.5 million
loan to cover the costs? Bankruptcy? A taxpayer bailout courtesy of the
government? Probably none of the above. More than likely, the farmers
would be left holding the bag. "I don't understand why people in
government, state or federal, would even entertain the concept of GMO,"
Vogel says. "It is so bad for everybody but Monsanto."