JANET BELL
The Brazilian state of Rio Grande do Sul is
trying to make itself into a transgenic-free zone. As a leading
producer of soybeans for the global market, making such a move presents
both problems and opportunities. Agricultures industrial giants
are strongly trying to block the states attempts to avoid
the production or importation of transgenic crops and foods, and
tension is building between the federal and state governments. But
rapidly-growing consumer demand in Europe and the rest of the world
means that there is no shortage of suppliers interested in sourcing
their soybeans from Rio Grande do Sul. There are signs that other
Brazilian states may follow suit and the transgenic-free zone could
even spread across the whole country.
Latin America is the perhaps the land of greatest
opportunity for the worlds agribusiness giants. It offers
many possibilities for both reorienting existing production and
opening up vast new tracts of virgin land for large-scale, industrial
agriculture. The continents two largest countries, Argentina
and Brazil, see their future wealth in grain production and have
welcomed transnational corporations with open arms. Argentina has
embraced genetically-modified (GM) crops without any hesitation
and is now the worlds number two producer of GM soybeans after
the US. Between the 1996/97 and 1998/99 growing seasons, the percentage
of transgenic soybeans planted in the country leapt from 0.8% to
72.6%.
Brazil has been more cautious in its approach
to GM crops. Non-governmental and peoples organisations can
take at least part of the credit for this ambivalence, having been
actively lobbying the government on biotech issues since 1985. At
present no GM crops are permitted to be grown commercially. Although
Monsantos Roundup Ready (RR) soybean was finally approved
by CTNBio, the Brazilian biosafety agency, in September 1998, a
federal judge concerned about consumer health threats immediately
slapped a temporary restraining order on it. In May 1999, the Agriculture
Ministry granted registration for RR soybeans, which seemed to give
Monsanto the green light to start selling GM seeds in Brazil. But
the company was again thwarted when hot on its heels came a ruling
from a Federal Court preventing Monsanto and its Brazilian subsidiary,
Monsoy, from commercialising the seeds until the government issues
biosafety and labelling regulations for genetically-modified organisms.
The ruling came in response to suit brought by
the Brazilian Institute for Consumer Defense (IDEC) and Greenpeace,
which contested that, according to the constitution, any innovation
which impacts the environment must be subjected to an Environmental
Impact Assessment (EIA). While EIAs are standard requirements for
GM crops to be approved in the US, they had not been required of
companies planning to release GM crops in Brazil. The NGOs also
argued that Brazilian Consumers Law requires labelling and no such
rules have been established for transgenic food. In delivering his
ruling, Judge Antonio Prudente stated that, "I believe that the
irresponsible haste in introducing the advances of genetic engineering
is inspired by the greed of economic globalisation."
Needless to say, the decision was challenged by
Monsanto. Brazil is the worlds second-largest soybean producer
after the US, harvesting 31 million tons in 1998. As such, it is
a crucial new market for the company. One US analyst has predicted
profits of $US 1 billion if Monsanto captures 50% of the Brazilian
soybean market, let alone the benefits it will reap from the train
of other GM products that it plans to introduce in the transgenic
beans wake. But Monsanto has quite a battle on its hands.
On August 10, Judge Prudente reiterated his earlier ruling, making
it definitive rather than preliminary, and rendering any appeal
by Monsanto less likely to succeed. It also prevents the Agriculture,
Science and Technology, and Health ministries from taking any actions
that contravert the ruling. IDEC lawyers consider that the earliest
hearing for Monsantos appeal will be November, which means
that even if the appeal is upheld the company will miss the 1999
soybean planting season, which runs from August to October. So,
for the time being Brazils soy harvest will remain transgenic-free.
Meanwhile, the government of the state of Rio Grande do Sul (RS)
plans to keep things that way indefinitely.
Rio Grande do Sul is the second-largest soybean-producing
state in Brazil, with soybean covering 3.1 million hectares. Some
80% of agriculture takes place on small family farms and 70% of
production comes from farmers cooperatives. RS produces 6
million tones of soy per annum, half of which is exported. The Partido
dos Trabalhadores (the Workers Party), which came to power in RS
in January 1999, had been convinced by local NGOs that in addition
to environmental and health risks, the introduction of GM crops
would result in the loss of sovereignty over seed production. RS
is Brazils largest seed producer, and at present is free from
the clutches of the agbiotech giants like Monsanto. The government
was also concerned that patented industrial seeds are not affordable
or appropriate for small-scale farmers, who dominate the RS agricultural
scene (see box).
Privatising the Seed Industry
Under strong pressure from the US and
transnational corporations, controversial legislation
was introduced into Brazil in 1996 allowing life patents.
This move was the subject of a protracted parliamentary
discussion process and was characterised by wide opposition
from civil society. Rio Grande do Sul's Workers Party
opposed the legislation at the time and is still against
life patenting. The following year, a law allowing patent-like
intellectual property rights on plant varieties was also
introduced. This law was heavily based on the Union for
the Protection of New Plant Varieties' (UPOV) system of
so-called "Plant Variety Protection." This system
of protection, developed in industrialised countries under
the influence of corporations and plant breeders, actually
gives patent-like rights to plant breeders and has nothing
to do with protecting plants. In 1999, Brazil was one
of a large handful of developing countries that rushed
to sign up to join UPOV. Once again under pressure from
the US and corporations, Brazilian politicians felt they
were choosing the lesser of two evils by signing up to
UPOVís 1978 Convention before its closing date
rather than being forced later on to join the 1991 Convention,
which is even more restrictive and threatening to farmers.
These events have changed dramatically
the nature of seed production, distribution and control.
Until 1996, seed production in Brazil was nationally-based.
Since adopting life patenting legislation and joining
UPOV, the private sector has increasingly been profiting
from knowledge which was previously in the public domain
and has progressively being taking control of seed production.
One of the direct consequences has been a flood of take-overs
of Brazilian companies by the transnational agbiotech
giants in the last few years.
Monsanto's biggest catch in Brazil so
far has been the national company Agroceres, a move which
has helped it gain a 60% market share of the Brazilian
corn market. In the soybean arena, Monsanto acquired Brazilís
largest soybean seed producers, FT Sementes and Monsoy,
in 1996, and gobbled up another national soybean company,
Terrazawa. It also owns or partially owns other US seed
companies operating in Brazil, including Cargill seeds,
Asgrow (soybean) and DeKalb (corn). In March 1999, Du
Pont (which now owns 20% of Pioneer Hi Bred) entered the
Brazilian market by setting up Du Pont do Brasil and taking
over Brazil's Sementes Dois Marcos. In May, AgrEvo completed
the acquisition of the Brazilian seed companies Sementes
Ribeiral and Sementes Fartura.
The new patent and PVP legislation has
profoundly affected the public institutions producing
seeds. In 1997, NGOs from the Alternative Technology Project
(PTA) had to pull out of a joint research project to examine
locally-grown bean varieties with EMBRAPA, because the
contract presented to them contained clauses about the
research findings and genetic materials being the intellectual
property of the Brazilian agricultural research institution.
While the researchers were eager to work with the NGOs
without such strings attached, their hands were tied by
the legal department. EMBRAPA's research agenda, like
many other public institutions, is also becoming increasingly
influenced by corporate agriculture: it is currently working
on introducing Monsanto's RR gene into local varieties
of soybean.
The impact on agricultural biodiversity
has yet to be fully realised, but the implications are
obvious. In order to be listed, the new seed law requires
seeds to meet certain norms of distinctness, uniformity
and stability. These descriptors pay no attention to objectives
of improvement, and place value on morphologic characteristics
rather than agronomic qualities. Diversions from the norms
are described as "aberrations," and only 4 aberrations
are allowed in every 150 plants. Many local varieties
do not meet the standards of genetic uniformity required,
and in this way the law actively stifles any attempts
to maintain or broaden the genetic base of agriculture,
which is so critical to small-scale farmers.
Sources: Angela Cordeiro (1998), "Brevets
& DOVs & OGMs: un triple probleme pour les paysans
brasiliens," for Solagral magazine; various newswire and
newspaper reports.
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Going transgenic-free
So, on January 1, 1999, the new state government
announced its decision to go GM-free. It began by enforcing a 1991
State Biosafety Law, which the previous government had ignored.
The law requires that environmental impact assessments are undertaken
before trials of transgenic crops can be started. As none had been
carried out by the companies involved, the government declared all
79 ongoing GM trials illegal. Data was collected from the sites,
and harvests were confiscated and dumped in sealed packages at a
depot in the appropriately-named town of Nao-Me-Toque ("Dont-Touch-Me.")
An Agro-Evo rice trial plot was also destroyed because it was not
covered by nets or surrounded by an adequate buffer zone, as required
at test sites. Meanwhile, a Workers Party deputy submitted proposed
new legislation to the State Assembly which would make the commercialisation
and importation of any GM produce illegal.
In the meantime, it remains impossible for field
trials to continue because there are no agreed criteria for environmental
impact assessments. Commitment to pursing the transgenic-free zone
is strong. According to RS agriculture secretary José Hermeto
Hoffman, "We have a very clear objective and [Monsanto] has a
very clear objective, so its like a war." A recent government
leaflet states that, "Our government favours the progress of
science under public control and in the service of life, not private
control and in the service of profit." Monsanto, meanwhile,
has been launching newspaper advertisements attacking the "intolerance"
of the RS government and the "incorrect and deceitful information"
it has been propagating relating to the fruits of biotechnology.
The RS government believes that creating a transgenic-free
zone is a sound economic move, given the increasing demand for GM-free
products in Europe and Japan. As Hoffman says, "Brazil has the
historic opportunity to become the worlds largest producer
of conventional soybeans." The country is the biggest and most
reliable source of non-GM soybeans for importers, since all of its
37-40 million ton crop is GM-free and there are no uncertainties
or complications regarding segregation. Canada has good segregation
systems, but only produces 7-10 million tons of GM-free soybeans
a year. Although it doesnt like to admit it, the US also has
competent segregation systems (see box). But Brazil seems to be
emerging as the country of choice for GM-free soybeans for the European
market. Which is good news for Brazil, given that 60% of its soy
exports already head for Europe.
Made to make the farmer's life harder?
The widespread assumption that GM soybeans
will reduce costs and produce higher yields is totally
unfounded so far. Extensive studies undertaken in the
US, where in 1999 more than 50% of the soybean crop came
from genetically-modified glyphosate-resistant soybeans,
have shown that farmers growing Roundup Ready soybeans
have suffered yield losses and increased costs. One review
of more than 8,200 soybean trials found the "yield
drag" of the top varieties of GM beans compared with
conventional varieties to be 6.7% (see table). Moreover,
farmers growing transgenic soybeans used 2-5 times more
herbicide compared with those growing conventional varieties.
This figure is likely to increase because there is clear
evidence of tolerance developing in several weed species.
The yield drag and Monsanto's technology
fee impose a sizeable direct tax on the income of Roundup
Ready soybean producers, ranging from a few percent where
these varieties work best to more than 12% in less favourable
areas. The report concludes that the remarkable popularity
of Roundup Ready soybeans amongst US farmers despite their
cost and yield drag is evidence of the gravity of the
problems created by today's herbicide-dependent soybean
weed management systems. Despite the advent of herbicides,
weeds pose as much trouble for soybean farmers in 1999
as they did in 1959. Farmers can no longer afford or have
lost the knowledge of how to implement more effective,
integrated, multiple tactic weed management systems.
Source: Charles Benbrook (1999), Evidence
of the Magnitude and Consequences of the Roundup Ready
Soybean Yield Drag from University-Based Varietal Trials
in 1998, AgBioTech InfoNet Technical Paper No 1, July
13. http://www.biotech-info.net/RR_yield_drag_98.pdf
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Demand for GM-free soybeans increases
Processors and retailers in Europe were initially
skeptical about the publics rejection of GM crops, but are
now convinced that demand is real and will not go away, so they
are taking product-sourcing very seriously. In the UK, in response
to unprecedented consumer pressure, all the major supermarkets
have committed to going GM-free, as have many of the market leaders
in neighbouring countries (see table). In April this year, both
Rio Grande do Sul and Parana, the number one soy-producing state,
were visited by representatives of a consortium of leading European
supermarkets which had all committed to eliminating GM ingredients
from their own-brand products. The consortium comprised Sainsbury
(UK), Marks and Spencer (UK), Carrefour (France), Superquinn (Ireland),
Esselunga (Italy), Migros (Switzerland) and Delhaize (Belgium).
On August 19, Marks and Spencer announced that it intends to go
GM-free in animal feeds as well as soy products, and that some animal-based
products will be GM-free by October. The company made a point of
noting that it will be sourcing its products from Brazil. This is
a particularly significant move because about 80% of the UKs
1.5-2 million tons of soy imports are for animal feeds, but up to
now the search for GM-free sourcing has been limited to whole soybeans
and soybean products such as lecithin. If other UK retailers also
follow through in their quest for GM-free feed, GM-soy imports into
the UK will slow to a trickle.
COUNTRY |
COMPANY |
COMMITMENT |
FOOD TURNOVER 1997 (BN
US$) |
NATIONAL RETAIL RANKING
1997 |
Austria |
Adeg |
Will not sell GM-labelled products |
0.8 |
5 |
BML |
Will not sell GM-labelled products |
4.7 |
1 |
Hofer |
Will not sell GM-labelled products |
1.8 |
4 |
Spar |
Has own GM-free brand; will not
sell GM-labelled products |
2.3 |
2 |
Belgium |
Delhaize |
Eliminate GM-ingredients from own-brands |
2.9 |
2 |
France |
Auchen |
Own-brand products GM-free from
Apr 99 |
14.9 |
3 |
Carrefour |
Own-brand products will be GM-free |
11.3 |
4 |
Systeme U |
All own-brand products are GM-free |
7.7 |
7 |
Ireland |
Superquinn |
Will make own-brand products GM-free |
0.5 |
4 |
Italy |
Coop |
Plans to go GM-free |
7.2 |
1 |
Esselunge |
Will make own-brand products GM-free |
2.0 |
5 |
Spain |
Pryca |
Own-brand products GM-free from
May 99 |
2.3 |
3 |
Switzerland |
Coop |
Own-brand products are GM-free |
6.2 |
2 |
Migros |
Will make own-brand products GM-free |
7.6 |
1 |
UK |
Asda |
Labels products with GM ingredients |
10.7 |
3 |
Iceland |
Own-brand products are GM-free |
2.5 |
12 |
M&S |
Will make own-brand products GM-free |
4.7 |
6 |
Safeway |
Labels all products with GM ingredients |
10.4 |
4 |
Sainsbury |
Will make own-brand products GM-free |
19.0 |
2 |
Tesco |
Will make own-brand products GM-free |
22.4 |
1 |
In April, an RS government delegation also visited
the UK and France to talk to importers, retailers, food manufacturers,
NGOs and politicians to assess markets, to seek technical help and
to foster interest in setting up sales agreements. Despite the strong
interest generated in the potential markets for GM-free soy, passing
the legislation to turn the state into a GM-free zone is far from
a fait accompli. In the Assembly, the government party has
a minority of seats (22), and has to convince the remaining 35 opposition
seats of the wisdom of its choice. The governments enthusiasm
is strongly countered by the influence of the biotech lobby, which
has done a good job of convincing people that GM crops will be far
more lucrative for Brazilian farmers.
The biotech giants propaganda machines have
been whirring away efficiently at all levels, targeting everyone
from parliamentarians to farmers. In the office of one RS towns
cooperative sits a poster advertising GM soya. "Made to make
the farmers life easier," it reads. Many soy producers
are not very interested in the ideological questions of the GM debate.
They are far more concerned about whether they can retain competitiveness
when Brazils main competitor Argentina has already
switched to GM. NGOs are working hard to counter the industrys
propaganda and help farmers realise that RR soybeans are no panacea
(see box), but they have a tough task ahead of them. The rougher
the ride the industry gets, the more pervasive becomes its propaganda.
In August this year, for example, Monsanto announced its plans to
invest a mind-boggling $US 1 billion in the country in order to
introduce its RR seeds.
US farmers feeling the squeeze
US soybean farmers are feeling the heat.
Soybean prices have been steadily dropping due to increased
competition from Brazil and other up-and-coming soybean
producers around the world. Soybean farming is not getting
any easier and many feel trapped on the chemical treadmill
because weeds are becoming more and more persistent and
difficult to deal with. Many have turned to Monsanto's
Roundup Ready soybeans to help with the weed problem and
to reduce labour costs, which they see as essential given
the plummeting prices for soybeans. And now there is trouble
in Europe.
Export markets account for 50% of the
US soybean crop, with Europe taking 30-40% of the beans
(worth $US 2.3 billion in 1997). Roundup Ready soybeans
accounted for 50% of the US crop in 1999. While there
is still a ready home market for them, Europe is shying
away from the transgenic bean. US soy exports to Europe
dropped by 46% between the first six months of 1998 and
1999. "When you look at Europe, you get depressed,
you get really depressed," says Jim Hershey, international
marketing director for the American Soybean Association
(ASA). Other key markets, such as Japan ($US 1 billion)
South Korea and Australia, are also looking shaky.
For the first time, the ASA has been
telling farmers to consider segregating bioengineered
beans from traditional beans. But in the current climate
a segregated system could bring the kiss of death to GM
crops, because they offer no advantages to consumers,
just added risks. As Scott McFarland of the National Corn
Growers Association has observed, "If we see a two-tier
pricing system in the US , you will see a departure from
that technology." This partly explains why US agroindustry
and government officials have been so unwilling to support
segregated systems, even though they are already operating.
The emergence of a two-tier system is the very reason
that Germany's Deutsche Bank recently advised investors
to sell their stock in Pioneer Hi-Bred. "If a two-tier
system takes hold, we see price premiums for high-value-added
GMO seeds collapsing," its' analysts say.
The Archer Daniels Midland (ADM) company
has been publicly denying that it can segregate, but it
does not seem to have any problems in supplying its UK
subsidiary, Haldane Foods, which went GM-free 18 months
ago. DuPont launched a GM-free, herbicide-resistant Synchrony-Treated
Soybean (STS) earlier this year, and all of its 500,000
kg of supplies were gobbled up by eager customers. ADM
has been offering farmers a premium of 18c per bushel
to grow STS, which is expected to cover 12-14% of farmlands
devoted to soybean production in 1999. Meanwhile, AgrEvo
suspended commercialisation of its transgenic herbicide-resistant
LibertyLink soybean in both 1998 and 1999 until its export
market could be assured.
1999 could be a tell-tale year for US
farmers - and for transgenic crops. Low crop prices have
farmers asking for a further $US 6-8 billion in aid, despite
the fact that the government has just approved a $US 574
million farm bailout.
Sources: 1999 ASA and Agro-Evo News
Releases; Soya and Oilseed Bluebook Online
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NGOs, meanwhile, have been rallying farmers and
citizens in rural and urban areas. Since April, a coalition of NGOs
has organised meetings for 12-15,000 people in the state. And on
August 20, more than 2,000 people gathered in the RS capital, Porto
Alègre, to vocalise their support for a transgenic-free state.
They issued a declaration calling on the government to suspend the
production, commercialisation and importation of GM products; to
take action to clarify the risks of GM technologies to the public;
and to promote public research to solve the problems of the majority,
rather than to promote dependence and market concentration.
If the RS law fails to pass the Assembly, the
governments idea is to increase bureaucracy so that it is
not worth the farmers while to grow GM crops, or to introduce
a heavy GM tax. By simply not drawing up guidelines for EIAs, the
government may be able to stall for years. But at the same time,
it needs to keep a watchful eye on the illegal planting of RR soybeans,
which are reportedly being smuggled in to Rio Grande do Sul from
Argentina. To ward against this, the state inspection is being equipped
with kits for GM soybean detection and will carry out strict border
controls. The state is also planning to install a DNA lab for GMO
detection. Meanwhile, NGOs like the Centro Ecologico will continue
to work at the local level, raising awareness amongst farmers and
getting them to lobby local politicians. They are also being encouraged
to declare their municipalities "GM-free zones," a move which
doesnt mean anything legally, but has political clout.
Pointers to the future
The RS initiative has created rumblings all around
the country. Brazils Ministry of Agriculture remains in favour
of GM crops and has approved the sale of five GM seeds. But its
position looks increasingly untenable as it has little support from
its states. At their national meeting in May, 18 out of the 27 state
secretaries for agriculture issued a motion calling for a halt to
the commercial release of GM crops pending assurances on a long
list of concerns from a lack of risk assessment studies to increased
interest from Europe in the Brazilian market as a source of GM-free
agricultural products. The state of Matto Grosso do Sul, another
key agricultural player, is currently working on implementing a
5-year moratorium for GM crops and other states are also working
on measures to restrict them. According to Angela Cordeiro, biodiversity
consultant for EMATER, the Brazilian agriculture extension agency,
the key to getting more support for such initiatives is convincing
people of the economic advantages of going GM-free. She points out
that labelling of GM products is now required in Europe and may
even become a reality in the US before long. "It is far more
expensive to segregate crops than simply to remain GM-free."
The demand and support from Europe and the rest
of the world for Brazils GM-free crops is key to making Rio
Grande do Suls dreams of a transgenic-free Brazil turn to
reality. The signs so far are positive, but time will tell. On August
27 the Edeka retail association (representing about 6,500 European
retailers) announced it would not sell products containing GMOs.
Edeka members independently operate about 9,000 outlets including
supermarkets, bakeries and drugstores in Germany, the Czech Republic,
Denmark, France and Poland. Japans largest maker of soybean
protein food products, Fuji Oil Company, also announced on September
1 that it will also be switching to GM-free soybeans. In Brazil
itself, the IDEC/Greenpeace suit against Monsanto has been critical
in giving GM-free advocates more time to convince people of their
arguments. According to Maria Guazelli of the Centro Ecologica,
"This growing season is critical. This year distributors, not
farmers, have felt the benefits of the increased premiums that Europe
is paying for GM-free soy. But come March when the next soy crop
is harvested, farmers will realise how easily they can sell it to
Europe and will start to reap the benefits themselves."
There are signs that there may be a sea change
in opinion occurring over GM crops in the business world, which
has so far been very supportive and optimistic about the GM industry.
Industry analysts are getting skittish about GM crops and are advising
investors to pull their money out of seed companies, which could
profoundly affect the viability of the whole industry. On August
21, Europes largest bank, Deutsche Bank, issued a statement
encouraging investors to sell their stock in Pioneer Hi-Bred. "GMOs
are, in our opinion, becoming a liability to farmers," it says.
Deutsche Banks analysts point out that up to now, market analysts
have focused intently on the value-added that biotech would provide
(higher yields, decreased herbicide use, etc), and that this is
what has sent agbiotech company stock prices soaring. But now it
sees this "value-added" as "value-detracted," because
it is GM-free crops that are selling at a premium. The value
chain has turned upside down.
Both biotechs lovers and adversaries think
that Brazil is an important test case of whether transgenic crops
continue to spread internationally and even whether they continue
to thrive in the US (see box). "Brazil is critically important
to the rate of biotech adoption or decline," says Steven Sonka,
an economist at the US National Soybean Research Laboratory.
"It will be closely watched by the rest of the world."
The above article appeared
in GRAIN's quarterly newsletter, Seedling. GRAIN's website is www.grain.org
. Janet Bell is a freelance writer and editor living in Boulder,
Colorado, USA. She can be reached at janetbell@earthlink.net
Special thanks go to Angela Cordeiro for her extensive input to
this article.
Main Sources:
* Personal communication with: Angela Cordeiro,
biodiversity consusltant for EMATER; Maria Guazelli, Centro Ecologico;
Andrea Salazar, IDEC; Silvia Ribeiro, RS Agroecological NGOs; José
Hermeto Hoffman, RS Agriculture Minister; Lindsay Keenan, Greenpeace
UK; Tanya Green, GAIA Foundation, Antonio Wusch, COTRIMAIO.
* Various newswires and newspaper articles from
Europe, Brazil and the US.
* Web page of the Partido dos Trabalhadores: http://www.pt.org.br
* EMATER/RS web page: http://www.emater.tche.br/
* IDEC web page: http://www.uol.com.br/idec/
* Soya and Oilseeds Bluebook Online: http://www.soyatech.com
* American Soybean Association home page: http://www.oilseeds.org/asa/frontdoor.htm
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