Crop trade wars and the maize of confusion

Legal battles loom over genetically engineered produce, says Danny Penman

Pity the poor chemical companies. They've spent decades and hundreds of millions of pounds investing in genetically engineered crops and then the selfish consumers come along, sniff about a bit and then audaciously refuse to part with their cash.

Multinational chemical companies may regard genetically modified foods as progress but, to the majority of consumers, it conjures up images of deranged scientists, nasty chemical companies and mutant killer tomatoes.

The industry is accustomed to this response, which is why it employs legions of smooth-talking PR execs to reassure consumers. But it's also acutely aware that reassurance has its limits - the best policy is to get the consumer to buy the products without realising it. This is why, presumably, chemical companies have been battling against the labelling of genetically engineered food. Without labelling, there is no choice, which means, the shopper has to buy the genetically modified food.

This strategy would have paid off handsomely were it not for the European Commission, which has just decided that all genetically engineered foods must be clearly labelled. Products, such as margarine made from oils derived from engineered crops will also have to be clearly marked.

The Commission's decision turns the economics of genetically altered crops on its head and could well spell the end of such foods in Europe. In future, food will have to be segregated into separate streams - "natural" and genetically modified. This will have a particularly dramatic impact on soya, which is the only modified crop currently shipping in bulk.

Roundup Ready soya, designed by Monsanto, has been engineered to produce an enzyme that makes it immune to the company's own Roundup herbicide. This makes weeding soya fields a doddle. Farmers simply have to spray their fields with the herbicide to kill the weeds and leave the soya intact.

Monsanto, which produces the modified soya, stood to make handsome profits. The company receives royalties from seed companies and it would also have seen dramatic increases in the sales of its Roundup herbicide. Under the Commission's proposals, American farmers, who produce 50 per cent of the world's soya supply and export about a quarter of their crop to Europe, will have to grow the modified crop in segregated fields. It will then have to be harvested, transported, stored and shipped to Europe in separate and clearly defined streams. This enforced segregation will make the crop more expensive, and the consumer, in any case, is extremely unlikely to buy it.

The prospects of Novartis's Bt Maize, which has been engineered to poison many of its usual pests, are also likely to be severely damaged. Another crop likely to be hit by the decision is a new type of potato designed especially for french fries. Novel types of corn, rape seed and sugar beet resistant to Monsanto's Roundup are also likely to be stillborn.

The Commission's decision is a major victory for an unprecedented alliance of consumer groups, churches, environmentalists, farmers, food processors and retailers. These organisations have spent years battling to get genetically engineered food labelled, and several of them have been calling for it to be banned. Opposition to genetically engineered food has been muted in Britain but it is a major issue in virtually every other developed nation. In Austria, a fifth of the electorate has signed a petition demanding a ban on genetically engineered food. Governments in Italy, Austria and Luxembourg have banned farmers from growing modified Bt maize. The European Parliament has been involved in a long-running battle with the Commission. It's a battle the Parliament now appears to have won.

But as recently as last month, the Parliament and Commission were at loggerheads over the issue. On April 8, the European Parliament censured the Commission, by 407 votes to 2, for allowing "trade considerations" to dominate the decision to allow the genetically modified Bt maize into the EU and demanded that "food safety and health considerations should have priority in the future". The Parliament also deplored the fact that "the Commission did not take sufficient account of the precautionary principle with regard to the health of consumers, the protection of the environment and the concerns of producers" on an issue that "has implications for each and every EU citizen". Now, after pressure from virtually every quarter, the Commission has fallen into line with consumers and Parliamentarians.

But US farmers, chemical companies and other interests are unlikely to take Europe's decision lying down. Ten per cent of this year's American soya crop is Roundup Ready and the US Department of Agriculture is already in urgent talks with the European Commission to try to force it to reverse its decision.

Europe's ban is probably illegal under World Trade Organisation (WTO) rules. Restricting the import of soya by "unreasonable labelling" is almost certainly a non-tariff barrier to trade and therefore illegal. America has taken the view that genetically modified crops are safe and claims that they are no different to conventional varieties and, therefore, need not be labelled. European consumer groups, environmentalists and farmers say the risks are unquantifiable and therefore should not be taken. On this issue, the WTO is likely to fall in behind the Americans.

The European Commission will come under great pressure over the coming months to reverse its decision. It will have to decide whether the wishes of the people of Europe or US trade interests come first.

Risks associated with genetically modified crops - if there are any - are probably unquantifiable. But one thing is certain - trade interests have an abysmal record of assessing risk. The mad cow disease fiasco, the decimation of wildlife by DDT and the human costs of Chernobyl and Bhopal do not engender a feeling of confidence in risk-assessment capabilities of scientists, policy makers and industrialists.

That is why labelling is such a hot issue. Without it, the public has no choice but to accept the risks doled out to them. But in this game, the risk makers won't be the risk takers.