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 Two of the world's biggest seed makers, Syngenta AG and Dow
AgroSciences, are responding with tightly controlled U.S. launches
of new GMO seeds, telling farmers where they can plant new corn and
soybean varieties and how can the use them. Bayer CropScience told
Reuters it has decided to keep a new soybean variety on hold until
it receives Chinese import approval.
Beijing is taking longer than in the past to approve new GMO crops,
and Chinese ports in November 2013 began rejecting U.S. imports
saying they were tainted with a GMO Syngenta corn variety, called
Agrisure Viptera, approved in the United States, but not in China.
The developments constrain launches of new GMO seeds by raising
concerns that harvests of unapproved varieties could be accidentally
shipped to the world's fastest-growing corn market and denied entry
there. It also casts doubt over the future of companies' heavy
investments in research of crop technology.
The stakes are high. Grain traders Cargill Inc [CARG.UL] and Archer
Daniels Midland Co, along with dozens of farmers, sued Syngenta for
damages after Beijing rejected Viptera shipments, saying the seed
maker misrepresented how long it would take to win Chinese approval.
In the weeks since Cargill first sued on Sept. 12, Syngenta's stock
has touched a three-year low. ADM in its lawsuit last week alleged
the company did not follow through on plans for a controlled launch
of Viptera corn.
Syngenta says the complaints are unfounded.
Bayer, told by Beijing in September that the new soybean seed, LL55,
had not been approved for imports, says it will keep on trying,
seven years after the company first filed its request. In the
meantime, it will withhold the new seed. China granted its last
import approval for any GMO grain in June 2013.
TEN YEAR EFFORT
"Our objective is to get the approval and the clearance from the
Chinese authorities so that we can go into a full commercial launch
as soon as possible," said Frank Terhorst, global head of seeds for
the company.
It can take up to 10 years and $150 million to develop new GMO seeds
and further delays in Chinese approvals will raise concerns about
Bayer's future investment in new GMO products, Terhorst said.
The slowdown in Beijing's regulatory process comes amidst growing
consumer sentiment against GMO food in China and concerns amongst
some government officials about excessive dependence on U.S. food
supplies.
China is a key market for the $12 billion U.S. agricultural seeds
business and for global grain traders and accounted for nearly 60
percent of U.S. soybean exports and 12 percent of corn exports two
years ago. Nearly 90 percent of corn in the United States is
genetically engineered, according to the U.S. Department of
Agriculture, as farmers embrace technology that helps kill weeds and
fight pests.
It is a common practice to mix different corn varieties in storage
and during transportation, so a lack of approval for one GMO variety
can put at risk of rejection large shipments that include approved
GMO grains.
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The controlled releases by Dow and Syngenta aim to bring new GMO
seeds to the U.S. market while assuring U.S. farmers and exporters
that the harvests will not be rejected by countries that have not
approved the GMO grain.
Dow AgroSciences this month said it will limit sales of its new
genetically modified corn and soybeans next year while it waits for
China's approval. Farmers who grow the new Enlist corn must maintain
isolation areas around their fields, use the corn only as livestock
feed, and submit to audits of their compliance.
When Syngenta released its Agrisure Duracade corn this year, which
is approved in the United States but not by China, it contracted
grain handler Gavilon, owned by Japanese trading house Marubeni
Corp, to oversee the launch. Gavilon assigned as many as six workers
at its Omaha headquarters to keep Duracade out of markets where it
had not been cleared, said Greg Konsor, general manager for grain
operations.
At harvest, growers have to fill out canary-yellow tracking
agreements where they identify themselves, their trucking firms and
the destinations for their Duracade corn. The bright color is meant
to tell buyers the shipments require special attention.
Iowa farmer Gary Vetter said that after he planted 240 acres of
Duracade last spring, he received calls and certified mail from
Gavilon checking on his compliance with restrictions aimed to keep
the grain out of unapproved markets.
"No matter what, they want to know where the corn goes," he said.
Controlled launches, however, are at best a temporary fix because
they are costly, complicated and risk accidental contamination of
other export grains, said Jim Sutter, chief executive of the U.S.
Soybean Export Council.
"The long-term solution is to work with our partners in China and
build confidence in the process in the way we want it to work," he
said. "Easier said than done."
(Additional reporting by Niu Shuping in Beijing; Editing by David
Greising and Tomasz Janowski)
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