Trouble in the garden

By the end of 1999, agricultural-biotechnology companies worldwide found themselves in deep trouble as investors lost confidence in them and drove stock prices down. A principal reason for this debacle was the forced disclosure by the US Food and Drug Administration that its own scientists had expressed grave doubts about the safety of genetically modified crops.

By Peter Montague

WALL Street investors lost confidence in agricultural biotechnology during 1999.[1,2,3] Agricultural biotechnology is by no means dead, but investors drove down stock prices of ag biotech companies during 1999 in a stunning reversal for the industry. The Wall Street Journal said 7 January 2000, 'With the controversy over genetically modified foods spreading across the globe and taking a toll on the stocks of companies with agricultural-biotechnology businesses, it's hard to see those companies as a good investment, even in the long term.'[2]

Hardest hit was Monsanto, the St. Louis chemical giant that had spent five years and billions of dollars morphing itself into a 'life sciences' company, betting its future on biotechnology in pharmaceutical drugs and agricultural crops. As the Wall Street Journal wrote 21 December 1999, 'Billions of dollars later, that concept of a unified 'life sciences' company - using technology to improve both medicines and foods - has become an affliction itself for Monsanto. The crop-biotechnology half of the programme has grown so controversial that Monsanto has agreed to a deal that is likely not only to push biotech to the back burner, but also to cost Monsanto its independence. And investors are reacting harshly.'[3]

Selling off

Monsanto agreed late in 1999 to merge with Pharmacia & Upjohn, Inc. and the combined company will be run not from St. Louis but from Pharmacia headquarters in Peapack, New Jersey. Monsanto's ag biotech business will be spun off into a separate company and as much as 19.9% of it will be sold.

Two other leaders in ag biotech, the Swiss pharmaceutical giant Novartis AG, and the Anglo-Swiss drug firm AstroZeneca PLC, announced during 1999 that they will combine their ag biotech divisions into one and sell it off, 'effectively washing their hands of crop biotechnology,' the Wall Street Journal said.[3]

Thus by the end of 1999, ag biotech companies found themselves in trouble, worldwide, for the first time. Here is a short list of reasons why:

* A lawsuit against the US Food and Drug Administration (FDA) forced the release of government documents showing that FDA scientists had expressed grave doubts about the safety of genetically modified foods even as the agency was publicly declaring such foods 'substantially equivalent' to traditional crops.[4] It seems clear from these documents that the scientific integrity of the US regulatory system has been compromised for political purposes, to provide a 'fast track' for the rapid, large-scale introduction of genetically modified foods.

* The insurance industry has consistently refused to write policies covering liability for harm caused by genetically modified organisms. Steven Suppan, research director at the Institute for Agriculture and Trade Policy (IATP) in Minneapolis, said last June, 'It is worth asking what kind of regulatory system approves for commercialisation a technology whose risks are so undetermined that the products developed from the technology have not been insured? An intuitive response is that the US rejection of liability suggests that US agribusiness and the US government have less confidence than is proclaimed publicly in the safety of the products approved and in the integrity of the product review process,' Dr. Suppan said.[5]

* A growing body of literature has begun to show that genetically modified crops are creating new kinds of environmental problems for farmers, and that genetically modified crops are exacerbating already-severe economic problems on American farms.[6]

* Europeans and others overseas have continued to insist that the safety of genetically modified foods has not been sufficiently documented and that import of such foods must be prohibited, or they must be labelled. The doubts expressed by FDA scientists, and the growing list of economic and environmental problems, are likely to stiffen European resistance to genetically modified seeds, crops, and foods.

* It became apparent in 1999 that the public rationale for promoting genetically modified foods - that such foods would 'feed the world' - was based on wishful thinking, not economics. It is now clear that US genetically modified crops are too expensive to 'feed the world.'[6]

* The rationale for refusing to label genetically modified foods unravelled in 1999 as biotechnology companies began to announce new crops with special traits (rice with increased vitamin A, for example). For years, biotech companies, the US Department of Agriculture (USDA), US Environmental Protection Agency (EPA), and FDA have argued that labelling genetically modified foods was impossible because it would require food companies to segregate genetically modified crops from conventional crops and it simply couldn't be done. All the crops were mixed together in the grain elevator, so labelling would be impossible, they said.

This silly and disingenuous argument evaporated in 1999. As soon as biotech firms announced specialty foods created by genetic engineering, the labelling problem miraculously disappeared. Labelling is suddenly easy - indeed, required - because consumer's can't be expected to pay premium prices for specialty foods if those foods aren't clearly identifiable on the grocery shelf.

Polls have shown that more than 80% of American consumers want genetically modified foods labelled as such. Now that labelling is acknowledged as feasible, will the biotech industry, USDA, EPA, and FDA bend to the public will and start labelling ALL genetically modified foods? Not on your life. Government and industry argue with one voice that labelling is not necessary because genetically modified foods are 'substantially equivalent' to the conventional foods they have replaced. They even say labeling would be 'misleading' because it would imply that there are differences between biotech foods and conventional foods.

Federal regulations governing biotech foods are founded on the premise that there are no 'material differences' between genetically modified crops and conventional crops. This argument, it turns out, was thoroughly discredited by FDA scientists before the regulations were issued.

The FDA spent 1989-1992 developing regulations governing genetically modified foods for humans and feed for animals. This was back when President Bush and Vice-President Quayle were advocating 'regulatory relief' for industry.

The FDA's rules - which were announced by Mr. Quayle in 1992 - allow a biotech company like Monsanto or DuPont to decide for itself whether its food products are 'generally recognised as safe', (GRAS). If a company decides that its new genetically modified corn or soybean or potato or wheat is 'generally recognised as safe' then no safety testing is required before the products are introduced into the food supply. The FDA said these rules - like all their rules - are based on 'sound science.'

However, during 1999 a lawsuit filed by the Alliance for Bio-Integrity in Fairfield, Iowa, forced the FDA to release some 44,000 pages of internal documents for the first time.[4] Among them was a series of memos from FDA scientists commenting on the FDA's proposed 'substantially equivalent' policy for biotech foods.

A key issue is whether 'pleiotropic effects' will occur when new genes are inserted into plants to give the plants desirable new traits. Pleiotropy means that more than one change occurs in a plant as a result of the new gene. For example, a gene that allows a plant to grow better under drought conditions might also make the entire plant grow smaller. The smaller size would be an unexpected 'pleiotropic' effect.

No data

FDA regulations assume that pleiotropic effects will not occur when new genes are inserted into conventional foods such as corn or potatoes or wheat or soybeans. Therefore, the FDA says, genetically modified crops are 'substantially equivalent' to conventional crops.

Internal memos make it abundantly clear that the FDA's scientific staff believes pleiotropic effects will occur when new genes are inserted into food crops. [In the following quotations, words inside square brackets have been added for clarity but words inside normal parentheses were in the original memos.- P.M.]

Commenting on the FDA's proposed biotech regulations in early 1992, Louis Pribyl, an FDA microbiologist, wrote 6 March 1992, 'It reads very pro-industry, especially in the area of unintended effects.... This is industry's pet idea, namely that there are no unintended effects that will raise the FDA's level of concern. But time and time again, there is no data to back up their contention, while the scientific literature does contain many examples of naturally occurring pleiotropic effects. When the introduction of genes into [a] plant's genome randomly occurs, as is the case with the current [genetic modification] technology (but not traditional breeding), it seems apparent that many pleiotropic effects will occur.'

'Many of these effects might not be seen by the breeder [meaning Monsanto or DuPont or other biotech firms] because of the more or less similar growing conditions in the limited trials that are performed. Until more of these experimental plants have a wider environmental distribution, it would be premature for FDA to summarily dismiss pleiotropy as is done here,' Dr. Pribyl wrote.

On the same subject, a memo from the Division of Contaminants Chemistry within the FDA's Division of Food Chemistry and Technology said 1 November 1991, 'Pleiotropic effects occur in genetically engineered plants... at frequencies up to 30%. Most of these effects can be managed by the subsequent breeding and selection procedures. Nevertheless, some undesirable effects such as increased levels of known naturally occurring toxicants, appearance of new, not previously identified toxicants, increased capability of concentrating toxic substances from the environment (e.g., pesticides or heavy metals), and undesirable alterations in the levels of nutrients may escape breeders' attention unless genetically engineered plants are evaluated specifically for these changes. Such evaluations should be performed on a case-by-case basis, i.e., every transformant should be evaluated before it enters the marketplace.'

Instead of heeding the concerns of its scientific staff, the FDA issued biotech food rules that assume no pleiotropic effects will occur, therefore no safety testing is required. All biotech foods are assumed to be safe. The stage was thus set for confidence in biotech foods to plummet as soon as word leaked out that the scientific underpinnings of the regulatory system had been compromised.


[1] I am indebted to Steven Suppan, research director at the Institute for Agriculture and Trade Policy (IATP) in Minneapolis, who provided me with several brief, thoughtful summaries of the state of agricultural biotechnology. Contact: Telephone (612) 870-3413.
[2] Christina Cheddar, 'Tales of the Tape: Seed Co. May Yet Reap What They Sow,' Wall Street Journal, 7 January 2000, pg. unknown.
[3] Scott Kilman and Thomas M. Burton, 'Biotech Backlash is Battering Plan Shapiro Thought Was Enlightened,' Wall Street Journal, 21 December 1999, pg.A1.
[4] The FDA documents are available at And see Marian Burros, 'Documents Show Officials Disagreed on Altered Foods,' New York Times, 1 December 1999, pg. A15.
[5] Steven Suppan, unpublished paper, National Summit on the Hazards of Genetically Engineered Foods, 17 June 1999, Capitol Hilton Hotel, Washington, D.C.
[6] Some of this literature is summarised in Charles M. Benbrook, World Food System Challenges and Opportunities: GMOs, Bio-diversity, and Lessons From America's Heartland,' unpublished paper presented 27 January 1999, at University of Illinois. Available in PDF format at

Peter Montague is with the National Writers Union, UAW Local 1981/AFL-CIO.

The above article appeared in Rachel's Environment & Health Weekly #685 as the first half of a 2-part article.