20 August 2002

TROUBLED MONSANTO - GUARDIAN ARTICLE

http://www.guardian.co.uk/gmdebate/Story/0,2763,777538,00.html
Troubled Monsanto scales down GM hopes in Europe
David Teather, New York
Tuesday August 20, 2002
The Guardian

Monsanto, the US corporation faced with widespread opposition to its genetically modified products, has conceded that it will take at least another three years before winning approval for their sale in Europe.

The company, which has become the bete noire of campaigners against GM crops, said it was working on the assumption that it will make no progress in Europe until 2005.

There has been a moratorium on the approval of new GM crops in Europe since 1998 due to public anxiety about potential risks. European consumers have become unsettled by unrelated food scares, including mad cow disease.

Monsanto also expects a lack of progress in Brazil, a key producer of soya beans, which has managed to resist pressure from Washington to grow GM crops, until 2005.

In the past few days, British ministers have said that they are coming under intense pressure from the US and the biotech industry to accept GM products. Such crops have been planted across swathes of American farmland.

On BBC Radio 4's Today programme last week, the countryside minister, Elliot Morley, said: "There is enormous international pressure to allow GM crops and seeds in this country from the biotech companies. They are going through national governments and the World Trade Organisation and pressurising the EU."

Britain's environment minister, Michael Meacher, said yesterday that Britain would not be "bounced" into accepting GM crops by the US.

Hendrik Verfaillie, the Belgian chief executive of Monsanto, told the Financial Times that the company needed to be more realistic about growth after a recent warning that profits in 2002 would be a third lower than hoped for.

"We are assuming no progress in Europe until 2005. We are trying to be conservative," he said. "It is better to under-promise than under-deliver, I have learned. I don't like earnings revisions, they are painful."

Britain has been running a three-year trial of GM oilseed rape in fields across the country, supplied by Aventis, part of Bayer. The trial, to measure the seed's environmental impact, is part of a deal between the government and the industry aimed at trying to reassure the public.

But the disclosure last week that trial crops had been contaminated with unauthorised GM seeds carrying antibiotic genes did little to calm campaigners, who now want an immediate halt to the trials.

Mr Meacher also admitted that the pilot may not give a true picture of the wider effect on the environment.

The decision on whether commercial planting is allowed will be made at European level, but resistance among some countries, including France and Greece, is fierce. In turn, Washington is threatening a trade war unless companies such as Monsanto can sell GM grain and seed in Europe.

The total land under GM cultivation rose from 1.7m hectares (4.2m acres) in 1996 to 52.6m hectares (131m acres) in 2001. Around two-thirds of that was planted with GM soya beans produced by Monsanto to resist herbicides.

Monsanto, which is suffering financial pressures, is eager to persuade doubters of the merits of GM food.

The controversial company recently tried to raise up to $650m from the commercial debt markets but was only able to borrow £390m. It also faces falling sales of its traditional herbicide Roundup after the patent expired in the US. Roundup accounts for 45% of Monsanto revenues.

The company was weakened further last week when the US drugs maker Pharmacia split from Monsanto just two years after buying it. Monsanto denies it is in danger of running out of cash.

The lingering suspicions about GM crops was sharply illustrated recently when Zambia joined other drought-stricken southern Africa states in turning away a shipment of GM maize from the US. The shipment was part of an international emergency relief effort to ease food shortages.

101 years in business
1901 Monsanto chemical works opens in St Louis, manufacturing saccharin and caffeine
1957 builds futuristic plastic home at Disneyland
1960 launches agriculture division, producing herbicides
1966 invents AstroTurf
1982 makes history by genetically modifying plant cell
1993 first biotech product approved for sale
1997 sells chemicals arm to focus on biotech
1998 EU imposes moratorium on new GM products
1999 a consumer backlash prompts shares sell-off
2000 merges with Pharmacia & Upjohn. Pledges not to use genes from humans or animals in food chain. UK begins three-year trial of GM oilseed rape.
2002 India approves GM crops in March. Four months on, the European parliament votes for tough GM labelling. Monsanto again becomes independent company.