30 April 2003
Eco-soundings/Mexico/NZ/US/new Dolly-firm setback
GM food giant could face disaster
* Guardian Eco-soundings
* Dolly the sheep firm PPL drops drug factory plans
* Consumers wary of biotech foods, says US study
* NZ: Govt accused of ignoring advice on GM
* Mexican Senate approves controversial law to allow limited use of GM crops
GM food giant could face disaster, claims Greenpeace report
Paul Brown, environment correspondent
Wednesday April 30, 2003
A report on the prospects for the genetic engineering giant Monsanto, which has 91% of the world's market in GM seeds, says the company "could be another financial disaster waiting to happen".
Innovest, which specialises in environmental, social, and strategic governance issues and is based in New York, says the company may not be able to obtain insurance against risks of contamination of food and other farm products, which might result in big compensation claims.
The report, which was commissioned by Greenpeace, says the company's prospects for expansion are limited because of increasing rejection of GM. One of Monsanto's latest products, GM wheat, might be a "costly failure" because of market rejectionand could cost the US large grain exports, the report says. Monsanto last night dismissed the report and reacted angrily to being given a CCC environmental rating, the lowest possible score. It said the report coincided with an investment assessment from the Bank of America suggesting Monsanto stock was undervalued and it was time to buy.
Innovest says the CCC environmental rating implies the firm has above-average risk exposure and less sophisticated management than its peers.
As a result, it is likely to underperform in the stock market over the mid- to long-term. The report says Washington appears to have been soft on Monsanto because of its substantial financial contributions to politicians. It also helps to clarify why the US government has not taken a precautionary approach to GM, and continues to reject GM labelling in the face of overwhelming public support for it.
It adds that if labelling were introduced in the US it would cause a serious loss of market for the company. The report says Monsanto stock has fallen by 50% but may still be overvalued. It warns that, as in the case of the Enron scandal, the financial markets fail to look below the surface factors. As a result of this the markets may have failed to notice that "Monsanto could be another disaster waiting to happen for investors".
Monsanto's other major product, the herbicide Roundup, is coming out of patents, and droughts in the US are restricting its use, the report says, leading to further pressure on the company. Monsanto withdrew its GM potatoes in 2001 after McDonald's, Burger King, McCain's and Pringles refused to buy them. More than 35 countries have enacted or announced laws that restrict GM imports and/ or require labelling of foods containing GM ingredients. GM concerns have caused US corn exports to Europe to plummet from $305m in 1996 to $2m in 2001.
In a statement Monsanto said: "The report issued by Innovest is highly biased and cherrypicks information about plant biotechnology and Monsanto in order to further a political agenda.
"It's telling that the cover page of the Innovest report, which was commissioned by an environmental group with an anti-biotechnology agenda, warns readers about the information in their report ... 'we do not guarantee its accuracy or completeness' and 'all opinions expressed herein are subject to change without notice'.
"It's odd that Innovest spent virtually no time seeking to balance the cherrypicked information through any meaningful discussion with Monsanto about our products and our strategy."
Marc Brammer, senior analyst on the Innovest report, said although the report had been commissioned by Greenpeace, this had no effect on the assessment. "We feel our conclusions are logical rather than ideological," he said.
Wednesday April 30, 2003
Two polls for the government to ponder on. Asked by Mori whether they supported a 10p charge for plastic bags at supermarkets, 63% of respondents supported the idea and 27% were opposed. Firm backing, Mori says, for the "polluter pays" principle. The second poll is on the eve of the public debate on commercial growing of GM crops. This question is whether GM foods should be introduced. A solid 56% were opposed, 25% were neutral and only 14% in favour - figures almost unchanged for five years.
Despite this, as the government continues to move towards commercial growing of GM crops, its official advisers, the Agriculture and Environment Biotechnology Commission, have lobbed a spanner into the combine harvester. Its report says it would "be difficult and, in some places, impossible to guarantee" that any British food was GM-free if commercial growing went ahead. This would destroy the government's other plans to increase organic production.
To prove the point, Dorset county council has urged the government not to go ahead with commercial growing of GM crops until damage to human health, the environment and farmers' livelihoods has been ruled out. It is one of a chorus of councils in the south-west voicing opposition. Campaigners hope to convert this into a regional council vote to make the peninsula GM free.
Of mice and menace
On the international stage, matters are not going so well. Codex, the international food labelling body, is meeting in Ottawa to discuss GM labelling and health. A full contingent is expected from the North American "no labels necessary" lobby. Sadly, the "let's keep the consumer informed" lobby, represented by 12 European countries, has decided, because of the Sars virus, not to attend. This includes Patti Rundall, of Baby Milk Action, who normally takes on multinationals without batting an eye. It puts you in mind of stories of mice frightening elephants. Sorry, Patti.
Dolly the sheep firm PPL drops drug factory plans
UK: April 29, 2003
LONDON - The Scottish biotechnology firm that helped clone Dolly the sheep said yesterday it had dropped plans to build a large-scale manufacturing plant to extract medicine from the milk of genetically modified sheep.
PPL Therapeutics Plc (PTH.L) said delays in developing recombinant Alpha-1-Antitrypsin (recAAT) for the treatment of emphysema, a serious lung condition, meant building the debt-financed factory at a cost of 42 million pounds ($66.82 million) was too risky.
The company is writing off 7.5 million pounds it has already paid towards the cost of the facility and is discussing possible changes to its collaboration agreement with Germany's Bayer AG (BAYG.DE) for the project. Large-scale production of the experimental drug may now be contracted out, it added.
PPL has been involved in some major biotech breakthroughs. As well as cloning Dolly the sheep in 1996, it was the first firm to announce it had cloned pigs capable of providing organs for humans and has also worked on stem cells.
But it has come under fire from investors for spreading its interests too widely and has also had a string of setbacks, notably the delay in development of recAAT.
It made a loss of 18.6 million pounds in 2002, up from a loss of 12.7 million in 2001.
The company recently slimmed down its operations with the spin-out of the transgenic pigs business and the closure of stem cell operations.
Consumers wary of biotech foods, says US study
An experimental auction has shown that people, on an average, are willing to pay 17-21 cents per unit more to purchase plain-labelled food than `GM-labelled' food.
MUMBAI, April 28
IN what is seen as a vindication of the right of consumers to make an informed choice, a study that has far reaching implications for the as yet evolving market for biotech foods has found that ``consumers' willingness to pay for food products decreases when the food label indicates that a food product is produced with the aid of modern biotechnology''.
The study on `the effects of information on consumer demand for biotech foods - evidence from experimental auctions' conducted by a team of four US researchers presents evidence that consumers are largely wary of biotech foods and are willing to pay for biotech food based on the presence or absence of labels advising that food was prepared with the aid of biotechnology.
The evidence, gathered for vegetable oil, tortilla chips and potatoes, shows that labels matter. This sends an important message for primary producers (farmers), food product manufacturers and marketers as well as service providers. Importantly, consumers discounted food items labelled GM (genetically-modified) by an average of 14 per cent. While gender, income, and other demographic characteristics appeared to have only slight impact on consumers' willingness to pay for biotech foods, information from interested parties and third-party (independent) sources was found to have a strong impact. With bio-engineering remaining controversial, information on biotech foods will have a major impact on consumer acceptance of foods with biotech labels. The experimental auction showed that people, on average, were willing to pay 17-21 cents per unit more to purchase plain-labelled food than `GM-labelled' food. Consumers might have perceived the plain-labelled products as non-biotech.
``Nonetheless, the observation that such a large `premium' exists for food items that are perceived to be non-biotech has strong implications for grain handlers, food manufacturers, and others in the marketing system'', pointed out the technical bulletin published by the US Department of Agriculture.
Biotech food labelling has become a contentious issue in the US and also between the US and some of its trading partners. Proponents of mandatory biotech-food labelling argue that consumers have a right to know whether their food has been produced using genetic engineering.
A number of countries including Australia, China, Japan and members of the European Union have adopted mandatory biotech-food labelling provisions.
Opponents of mandatory labelling argue that such labelling will confuse consumers and, in many cases, unnecessarily alarm consumers. In the US, only biotech food that differ substantially from their conventional counterparts require special labelling. Thus far, however, no biotech foods on the market have required labelling.
Implication for India: The study has serious implications for developing countries such as India that are agrarian economies. While the benefits of agricultural biotechnology are known, there are serious concerns over biosafety and environment. Obviously, adoption of the precautionary principle is desirable.
In our country, extant food laws are not only antiquated, but also their enforcement is tardy, to say the least. In India, consumers have never been taken seriously, neither by producers nor by policy makers. No wonder, shoddy goods dominate the market.
As of date India does not produce any biotech food indigenously. So far, only one GM crop has been cleared for commercial cultivation (Bt. cotton). However, large imports of food products, both primary and processed, are taking place with the liberalised import regime.
The Government has absolutely no wherewithal to check GM traits in food products that enter the country. Our laboratories do not have appropriate equipments, they are inadequately staffed and the professional competence of those manning testing facilities is suspect.
It is an open secret that soyabean oil, corn (maize) and cotton that enter the country are largely genetically modified. But the Government has not initiated any action to screen such imports, despite the legal position that import of such products is not allowed without specific permission from the government.
In case of imported soyabean oil (extracted from GM soyabean), some debate on imposing restrictions on imports took place last year; but official apathy has meant no concrete action to keep the consumers informed.
GM laws head to Parliament
Govt accused of ignoring advice on GM as new laws allowing release of GM organisms introduced into Parliament
29 April 2003
The Government is being told it is ignoring the best advice by pushing ahead with GM legislation. New laws allowing the release of genetically modified organisms are being introduced to Parliament on Tuesday.
Sustainability Council chairman Sir Peter Elworthy says a report of a fortnight ago, found any release of a GM organism could seriously damage export incomes. He claims the policy behind the new law was rushed through over summer before the Government could have seen the results from the economic study. Sir Peter says the legislation fails to give the Environmental Risk Management Authority the powers to ensure a company is financially fit before approving GM release. He says there is no provision for compensation when non-GM crops are contaminated. He believes ERMA should be able to collect a bond for the clean-up of any problems with modified crops.
The Sustainability Council also questions why the Government is rushing into the legislation when it claims that it expects very few release applications in the next few years. The council is made up of Sir Peter Elworthy, Professor Garth Cooper, sportswoman Dame Susan Devoy, cook Annabel Langbein, actor Sam Neill and economics consultant Simon Terry. It aims to protect and enhance New Zealand's ecosystems, the health of its people and the ability to derive income from established land uses. Its focus is the bearing genetically modified organisms have on those aims.
Mexican Senate approves controversial law to allow limited use of GM crops
Date Posted: 4/28/2003
MEXICO CITY - AP World News via NewsEdge Corporation : The Mexican Senate approved a new law Thursday that would allow genetically modified crops under certain limits and require some labeling of foods containing those so-called "GM'' components.
While the law seeks to protect native Mexican plants from accidental releases or contamination by GM crops, environmentalists said the safeguards are not strong enough.
"The spirit of this law is more in line with corporate interests, not the public interest,'' said Liza Covantes of GreenPeace Mexico, in a statement distributed before the law was passed on an 87-3 vote, with 2 abstentions. But the law was likely to please neither U.S. agricultural interests- who oppose any labeling requirement- or Mexican farm activists, who advocate a total ban on GM crops.
The debate came to the forefront in Mexico in 2001, when some researchers claimed they had found GM genes contaminating some native varieties of corn in Mexico, where the grain was first domesticated. Other scientists later called into question those findings. The law approved Thursday- which still must be approved by the lower house of congress- would impose safeguards on experimental planting of GM seeds, and require them to be declared risk-free before they are released for human consumption or wider plantings. Foods made with GM crops would have to reflect that fact in their labeling.