Changing rules signal difficult times for agriculture
Updated: Friday, October 21, 2011 10:38 AM
By DOUGLAS R. JONES
For the Capital Press
Farmers across the Midwest were hit with an unwelcome surprise in recent weeks as they prepared to deliver their corn harvest to their local grain elevators.
Some big grain companies -- primarily Bunge -- posted signs saying that the new corn variety, Agrisure Viptera, would not be accepted at their facilities. As a result, farmers who planted the popular insect-resistant corn have had to scramble to find alternatives.
Many farmers feel that Bunge has changed the rules in the middle of the game. Syngenta, the innovator of Viptera, is backing up the farmers who planted Syngenta seed in good faith with a lawsuit.
It's just the latest example of how tangled our international regulatory and trade system for biotech has become, the dangerous disincentives it is creating to the innovation and adoption of new plant technologies, and how farmers are now caught in the middle. Unless we get this straightened out, not only farmers, but the entire agricultural industry -- one "bright spot" in a lagging U.S. economy, according to the Fed -- will suffer.
The immediate problem originated this summer, when China suddenly entered the corn market with several purchases. Bunge is afraid that if the new trait ends up in shipments to China, that county either won't accept the grain, or more likely, will demand a lower price.
Although China is still a minor part of the U.S. corn market, the unexpected imports have thrown a wrench in the works. This is because China, whose regulatory system generally lags behind the rest of the world, is not expected to approve the Viptera trait until next spring.
Because foreign approvals are such a critical issue, in 2007, the Biotechnology Industry Organization, BIO, brokered an industry-wide agreement -- which included the grain companies -- specifying that biotech companies would not commercialize new traits until they achieved regulatory approval in major export destinations. China is not considered a major destination. Syngenta complied with the agreement, following both BIO and National Corn Growers Association guidelines, and secured approvals in Canada, Argentina, Brazil, Australia, Japan, Mexico, New Zealand, the Philippines, Korea and Taiwan.
In all my years as a farmer, I have never seen a major company take an action like Bunge's, and I fear it sets a very dangerous precedent. Corn is a commodity crop. As a farmer, you buy seed based on the traits you need for top production on your farm -- insect resistance, herbicide tolerance, drought tolerance, etc. -- and expect to be able to deliver your harvest to the grain elevator simply as "yellow No. 2 corn."
Suddenly, the rules have changed in the middle of the growing season just weeks ahead of harvest. I understand Bunge's desire to protect its profit margin, but there is a larger issue at stake. Bunge's action creates a huge disincentive for farmers to adopt new technologies.
If I think a sudden shift in politics here, or in a buyer country, may tangle up the regulatory system and effectively "outlaw" my crop, I am not going to plant it. If thousands of farmers like me won't plant it, why should biotech companies invest $100 million or more to innovate and develop new varieties in the first place?
U.S. agriculture leads the world precisely because we have adopted new varieties, developed by both biotechnology and other high technology breeding methods, and other farming technologies more readily than other nations. As an example, we have increased our productivity in corn by over 40 percent per acre in the last 20 years, largely because U.S. farmers readily adopted biotechnology starting in the mid-1990s.
In the short term, U.S. grain companies need to manage grain so they do not damage incentives for farmers to adopt new varieties and biotech companies to innovate and develop them.
Long term, nations that want to import U.S. grains to feed their growing populations need to embrace biotech as the safe technology it is. They also need to synchronize their regulatory process with the rest of the world. They may choose not to accept a new variety and pay a premium for non-biotech varieties as a "specialty" crop. Either way, the rules should be set before planting season.
What happened this year to Syngenta's corn could have happened last year to other new varieties introduced without Chinese approval and it can happen next year to anyone. We simply cannot continue to leave U.S. agriculture at the mercy of this tangled world of regulatory systems.
We all need to work together to fix this problem quickly. Otherwise, the consequences for farmers, agriculture, and U.S. competitiveness are just too severe.
Douglas R. Jones of Meridian, Idaho, is executive director of Growers for Biotechnology.