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7-Business: From boom to bust in three seasons - the rapid rise and fall of GE markets

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TITLE:  From boom to bust in three seasons -
        the rapid rise and fall of GE markets
SOURCE: Green Party of Aotearoa New Zealand
        by Dr. Christine Dann,
DATE:   July 2000

-------------------- archive: --------------------

>From boom to bust in three seasons - the rapid rise and fall of GE 

1996 was the first year in which economically significant amounts of 
GE food crops were first grown in the world. Most of them were 
planted in the USA. By 1999 33% of US corn (maize) acres, 44% of 
soybean acres and 55% of cotton acres were planted with GE seed (St 
Louis Dispatch, 23.5.99). US farmers had obviously embraced the 
technology enthusiastically. Unfortunately for them, they did so 
largely in ignorance of the actual performance of GE seed, and of the 
market demand. They believed what the GE seed and agrochemical 
producers and suppliers told them about the agricultural and economic 
performance of their products. As the bullet point history of the 
rise and fall of GE markets given below proves - they were conned. 
Farmers in the rest of the world need to learn the lesson, and not be 
sucked into the brave new world of GE lies and half-truths.

The story of the fall of GE markets is woven from the threads of 
market manipulation, international trade regulation, consumer 
resistance, retailer initiatives, decline in investor confidence, and 
things going wrong down on the farm. It is difficult to separate the 
strands, as they all impact on each other. The following points trace 
these strands from the beginning of 1999, when the boom started to go 

January 1999
- Monsanto lays off staff, its stock price falls, and it faces more 
  lawsuits by farmers unhappy with the performance of its GE seed.
- Swiss Re, a major reinsurance company, advises that insurance 
  companies are 'over-exposed' to GE claims; Lloyds advises other 
  insurance companies to charge special premiums to insure GE crops.
- Monsanto is suing 525 farmers for planting its seed 'illegally', 
  including a farmer who claims he did not plant the seed and that 
  his crops were contaminated by wind-blown GE pollen.
- A Time magazine poll finds that 81% of respondents want GE foods 

February 1999
- Major French supermarket chain, Carrefours, bans GE ingredients 
  from own-brand food and removes other GE foods from sale.
- British supermarket chains Iceland, Sainsbury, Waitrose, the Co-Op, 
  Marks and Spencer and Asda go GE free.

March 1999
- A consortium of European supermarket chains (UK- Sainsbury and 
  Marks and Spencer; France - Carrefours; Italy - Effelunga; 
  Switzerland - Migros; Belgium - Delhainze; Ireland - Superquinn) is 
  set up to jointly source non-GE foods.

April 1999
- No new GE products have been approved by the EU since April 1998, 
  and four new applications are deadlocked.
- Greece has a total freeze on experimental and commercial growing of 
  GE crops, other EU countries have partial bans on growing, selling 
  and/or experimenting.
- Unilever, the world's largest food manufacturer (annual turnover 35 
  billion pounds sterling) announces it is going GE free.
- Nestlé and Cadbury-Schweppes go GE free.
- The last large British supermarket not yet GE free, Tesco, goes GE 
- The GE free supermarkets in Europe now have considerable market 
  power - a joint annual turnover of $150 billion*
- The third largest US corn processor, A.E. Staley Co, announces that 
  it will refuse GE corn not approved by the EU.

May 1999
- Giant US agri-food company Archer Daniels Midland sets up GE-free 
  elevators, announces that it wants farmers to separate GE and non-
  GE harvests at source, and offers a premium for non-GE soybeans.
- Monsanto sets up a toll-free line to advise farmers which elevators 
  will accept GE crops.
- Commodity prices remain low, and economists warn that as surpluses 
  grow, prices will fall.
- Religious groups (Christian, Jewish, Hindu, Buddhist) sign on to a 
  $30 million law suit against the US government, which demands that 
  the Food and Drug Authority classifies genes used to alter foods as 
  additives and tests them more rigorously.
- The Supreme Court of India upholds a ban on testing GE crops.

June 1999
- Northern Foods, one of the largest food companies in the UK, goes 
  GE free, as do Walkers crisps and Kellogg's cereals.
- Rank Hovis McDougall announces it will stop using GE soyflour in 
  its breads. By now 24 of the 30 largest food companies in the UK 
  are GE free.
- In Brazil a judge upholds the precautionary principle ands confirms 
  a ban on planting and marketing GE soy.
- EU Ministers for the Environment announce a factual ban on any new 
  approvals for the commercial release of GMOs, until strict 
  environmental standards can be set.

July 1999
- A US Department of Agriculture survey of GE crop performance is 
  released, and shows that yields are not consistently higher and may 
  be lower, and that herbicide and pesticide use is not always less. 
  Profits were also variable.
- Three US baby food manufacturers go GE free.
- American trust-busting lawyer David Boies (leader of the successful 
  US Justice Department prosecution of Microsoft) announces that he 
  is considering taking a case for farmers against the anti-
  competitive behaviour of the major biotechnology companies.
- The Advertising Standards Authority in the UK upholds complaints 
  against Monsanto for misleading claims about its GE products.
- US agri-food giant company ConAgra buys a GE-free health food 
  company, and takes ownership of several GE-free website names e.g.

August 1999
- Deustche Bank investment analysts note that the GE market is going 
  bust, and that premiums are being paid for non-GE not GE crops. 
  They advise investors to sell their Pioneer Hi-Bred stock, and not
  to invest in GE stock generally US lobbying of foreign food
  regulatory agencies against labelling GE foods continues, and is
  successful in slowing down and watering down ANZFA proposals on
- In Japan the two largest breweries go GE free; in Mexico a major 
  tortilla corn chip manufacturer goes GE free.
- US pet food company Iams stops using non-EU approved corn in its 
  cat and dog foods.
- A University of Nebraska survey finds that only 36% of rural 
  Nebraskans favour using GE seed.

September 1999
- As the US harvest comes in, mid-western grain merchants offer 20-30 
  cents premium per bushel on non-GE soybeans and 8-15 cents premium
  on non-GE corn Of 100 mid-western grain elevators surveyed, 11%
  were segregating corn and 8% segregating soybeans.

October 1999
- Thailand's Trade Minister (and WTO head-in-waiting) Supachai 
  Panitchpakdi announces an indefinite ban on importing GE seed to 
- Monsanto stock has lost a third of its value in the past year.

November 1999
- A bi-partisan bill requiring full labelling of GE foods and 
  supported by 20 legislators goes to the US Congress.
- The Alliance for Better Foods (ABF), a lobbying organisations 
  consisting of US pro-GE food manufacturers and retailers, reports 
  that in the first nine months of 1999 it spent $676,000 in 
  contributions to US politicians.
- Member companies of ABF spent a combined $43.3 million in campaign 
  contributions during the 1998 US election cycle; Monsanto, DuPont 
  and Novartis spent more than $6 million on lobbying in 1998.
- US-based genetic analysis company Genetic ID claims Australia could 
  earn a $1 billion share of the world GE-free food market if it 
  moves judiciously on the issue.
- The US National Family Farm Coalition, a coalition of small farmer 
  organisations, issues 'The Farmers' Declaration on Genetic 
  Engineering in Agriculture', which demands an end to the sale, 
  environmental release and further production of GE seeds and 
  agriculture products until and independent and comprehensive 
  assessment of the social, environmental, health and economic 
  aspects of these products has been made.
- Uncertain about market prospects and crop handling requirements for 
  2000, US farmers are confused about whether to order GE seed, and 
  many decide against it.

December 1999
- Brazil, the world's second largest soybean producer, offers farmers 
  $5.37 million in low interest loans to pull out GE soy seedlings 
  and replant with non-GE varieties (as an alternative to burning
  illegal crops).
- Brazil's exports of non GE soybeans to the Europe rose from 10,135 
  million tonnes in 1996 to 15,130 million tonnes in 1998; the USA's 
  soy exports to Europe dropped from 8.854 million tonnes in 1996 to 
  6.572 million tonnes in 1998 The value of US soy exports to Europe 
  dropped from $2.1 billion in 1996 to $1.1 billion in 1999.
- Britains's last Christmas with GE turkeys looms as UK supermarkets 
  start sourcing meat, eggs and dairy products from animals that have 
  not been fed GE grain.
- American and British shareholders in major food companies such as 
  Heinz, Coca-Cola, Safeway, Pillsbury, Burger King. ADM, Philip 
  Morris, Sara Lee and McDonalds join a campaign co-ordinated by the 
  Interfaith Center on Corporate Responsibility to get the companies 
  to out a moratorium on GE ingredients and products until proper 
  testing has been done.
- Credit Suisse First Boston reports that the biotech industry is 
  suffering from 'negative momentum' and compares it to the nuclear 
  power industry - the science might be sound but no one is building 
  new nuclear plants today.

January 2000
- A Reuters straw poll of 400 US farmers at the annual meeting of the 
  largest US farm organisation, the American Farm Bureau Federation, 
  indicates a drop in GE food crops for 2000 - 15% less GE soy, 22-
  24% less GE corn.
- Major US corn processor Frito-Lay tells its suppliers not to grow 
  GE corn.
- The UN Biosafety Protocol is signed in Montreal, and provides for 
  stricter national and international controls on producing and 
  trading in GMOs.
- Deutsche Bank reports that biotech company stock is still a bear 
  market, and the predicted two-tier market for GE and non-GE corn 
  and soy has developed, with non-GE attracting the premium.

February 2000
- Germany's Minister of Health suspends approval for Novartis Bt corn 
  on the grounds that it is necessary to protect consumers and defend 
  precautionary health protection.
- Market rejection of Bt corn cost US farmers $200 million in lost 
  export revenue in 1999.
- Minnesota introduces a bill to place a moratorium on GE crop 
  growing in Minnesota.
- American soy farmers try and persuade Monsanto to refund the 
  difference between the price of GE soy seed in the USA and 
  Argentina - between $300-$600 million.
- A survey of 1,200 US grain elevators estimates that 24% are 
  planning to segregate GE corn and 20% will segregate soybeans in 
  the fall of 2000 (up from 11% and 8% in 1999), and slightly more
  than one in ten elevators will offer a price premium for non-GE

March 2000
- A group of transnational biotech industry companies (DuPont, 
  Monsanto, Dow Chemical, AstraZeneca, Aventis, BASF, Novartis, and 
  other smaller companies) award a $50 million contract to PR firm 
  BSMG Worldwide to develop and run a 3-5 year advertising and 
  communications campaign to promote GE foods as safe for humans and 
  not harmful to the environment.
- Top American chefs start ridding their restaurants of GE foods.
- American corn farmers advise their Filipino counterparts not to 
  grow GE corn.
- A European Union Directorate-General for Agriculture study of the 
  economic impacts of GE summarises American studies which show that 
  GE crops exhibit variable profitability, and that profitability 
  depends on market as well as farm conditions, hence the future 
  profitability of GE is hard to predict. It also notes that GE
  soybeans attract the same subsidies (aka flexibility payments,
  marketing loans and crop insurance) as non-GE beans, and that
  marketing loan benefits averaged 44 cents a bushel in 1998.
  Oilseed producers are also likely to be eligible for emergency
  payments averaging 14 cents a bushel in 2000 to offset record
  low market prices.

April 2000
- A major Coca-Cola shareholder (William Wardlaw III, with 2,020,682 
  shares worth $98 million) sponsors a resolution for Coke to go GE 
- US farmers start to report GE plants appearing as weeds in their 
- First US supermarket chain - Genuardi's Family Markets - goes GE-
  free and supports labelling of GE products.
- US Department of Agriculture predicts a 25% drop in GE corn harvest.
- GE papaya grown in Hawaii is rejected by Japanese, Canadian and 
  European markets; growers get a 300-700% premium on non-GE fruit.
- McDonalds burger chain stops using GE french-fries, and McDonalds 
  suppliers instruct growers to stop growing GE spuds.
- Frito-Lay stops making GE potato chips.
- Burger King reassures customers that it does not use GE french-

May 2000
- Archer Daniels Midland offers 18 cents per bushel premium on a non-
  GE variety of soybean.
- The Tokyo Grain Exchange launches a non-GE soybean futures market.

June 2000
- 310 scientists from developed and developing countries sign a 
  letter to delegates to the fifth Conference of the Parties on the 
  Convention on Biological Diversity in Kenya calling for an 
  immediate suspension on the release of GE crops and products for
  at least five years, and for all patents of living processes,
  organisms, seeds, cell lines and genes to be revoked and banned.
- A major independent worldwide research study by Angus Reid Group on 
  consumer reaction to GE foods finds that opposition to GE foods has 
  risen to 51% of consumers in the USA, 59% in Canada, 71% in France, 
  73% in Germany and 82% in Japan. Opposition to GE foods is higher 
  in countries where respondents feel they understand more about
  genetic engineering of food and lower in countries where consumers
  feel they do not know much and need to know more.
- GE canola in Canada found to be resistant to three commonly-used 
  herbicides as a result of crossing in the field, adding to the 
  growing problem of herbicide resistance.
- The US National Science Foundation's Science and Engineering 
  indicators survey finds that well-educated Americans (college 
  graduates) are more likely to oppose GE than the poorly educated, 
  and that women are more likely to be skeptical about GE than men.
- Canadian farmer Percy Schmeiser, sued by Monsanto for allegedly 
  planting its GE canola illegally, countersues demanding 4.2 million 
  pounds sterling compensation for trespass, crop contamination and 
- A survey of US corn growers shows that over half are concerned that 
  they will be held liable for contaminating non-GE crops through
  cross-pollination, and over two thirds are concerned that they will
  have to bear the costs of segregating GE from non-GE corn and will
  plant less GE corn if they have to segregate.
- Swedish pharmaceutical company Pharmacia buys Monsanto and tries to 
  sell off the agricultural (GE seed) division.
- The Prime Minister of New Zealand says that, contrary to the claims 
  of industry and the Australian Prime Minister, a KPMG study shows 
  that full labelling of GE foods would add only 0.19% to the total 
  food bill

July 2000
- A US Department of Agriculture survey suggests that GE acreage in 
  2000 is down from 1999 - 20% for corn and 6% for soybeans.
- The Tokyo Grain Exchange non-GE soy futures market booms, with 
  almost three times as many non-GE contracts being traded as GE ones.
  Prices for the non-GE beans are 9-10% above GE beans.
- Non-GE papaya growers in Hawaii start labelling their fruit 'Not 
  Genetically Modified' to take advantage of non-GE premiums running 
  as high as 700%

All dollars quoted are US dollars, unless otherwise stated.

Information in this history comes from media releases, research 
reports and other documentation posted on the following website 

A fully referenced paper incorporating this information and 
containing further analysis of global food markets will be available 
in November 2000.


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