by Mithre J Sandrasagra

United Nations, 16 Feb 2000 (IPS) -- The world's farmers are expected to reduce their planting of genetically engineered seeds by as much as 25% this year, according to a Worldwatch Institute report released Thursday.

This is a startling development in light of a twenty-fold increase in the planting of genetically altered crops during the last four seasons, the report notes. Recent public resistance to food containing genetically modified ingredients has led to the fall of biotech companies' stock prices, the decline of transgenic crop exports, and to questions over farmers' considerable liability as demand is expected to drop farther.

Farmers who have invested in transgenic seed and the agrochemical inputs they require face huge liabilities if demand for transgenic produce continues to slip. American exports of gene-altered soybeans to the European Union fell from 11 million tonnes in 1998 to six million tonnes in 1999, and American corn shipped to Europe dropped from two million tonnes in 1998 to 137,000 tonnes last year.

This represents "a combined loss of nearly one billion dollars" for American farmers, according to the report, titled "Portrait of an Industry in Trouble."

The questions raised by declining demand in the West include what will happen to the transgenic crops produced in the West over the next few years, and whether production will continue to supply Third World demand.

The developed world is slowly realising that the rapid expansion of transgenic crops and the corresponding hugely inflated initial stock prices of biotech companies are reminiscent of the uncritical bandwagons that accompanied the proliferation of nuclear energy and the spread of chemical pollutants like DDT.

The effects on the environment and human health of these earlier technological innovations were eventually proven to be far more complex and lingering than the promises that accompanied their rapid commercialisation.

The concern for developing countries is that untested and potentially harmful transgenic produce will be dumped very cheaply on their economies. A recent report put out by Deutche Bank declared that "Genetically Modified Organisms are Dead" and emphasised that non-transgenic crops would command price premiums over transgenic crops.

Two top commodities handlers, Archer Daniels Midland and A.E. Stanley, "have already begun to discount transgenic crops because of this greater financial risk," says the Worldwatch Institute.

Today, the United States accounts for half of the global soybean harvest, dominating production on a scale that is unique among major crops.

The evolution of the soybean trade between the United States and China reflects the fears of many other developing nations. China, once the world's leading soybean grower, now produces only one-tenth of the total harvest.

And the United States has become the leading exporter of soybeans, while China is a leading importer. Not surprisingly, nearly two-thirds of China's 1998 soybean imports came from the United States.

As incomes continue to rise in China and as a projected 300 million more people are added to the country's population, the Chinese will consume more pork, poultry, and eggs, requiring ever-expanding imports of soybeans for animal feed.

China is almost certain to become progressively more dependent on US soybeans in the years ahead, and almost all US soybean production is transgenic.

In November 1999, 30 farm lobbies, including the National Family Farm Coalition and the American Corn Growers Association, warned American farmers that "inadequate testing of gene-altered seeds could make farmers vulnerable to massive liability from damage caused by genetic drift - the spreading of biologically modified pollens and other environmental effects."

Pollen from genetically altered crops has been found to be harmful to certain beneficial insects in an ecosystem. A December 1999 article in Nature magazine reported that "the insecticide produced by a widely planted variety of transgenic corn can accumulate - in its active form - in the soil for extended periods of time."

The authors emphasise that the effects on soil organisms and fertility are potentially enormous. Another factor contributing to the decline in public demand for products containing transgenics in the West is the growing number of food manufacturers and grocery chains that have taken transgenic products off their shelves in an attempt to forestall unforseen health hazards to their customers.

According to the Worldwatch Institute, "most major food companies have announced that they will avoid transgenic ingredients in their products for the European market.

"Gerber, Frito-Lay, and natural food retailers Wild Oats and Whole Foods, have said that they will avoid transgenic ingredients in their products sold in the United States - the largest consumer market for transgenic crops at present."

On Jan 30 in Montreal, Canada, 130 nations signed the Cartagena Protocol on Biosafety, an agreement prescribing caution with regard to genetically modified organisms.

Under the first new environmental treaty of the 21st century, governments will signal to the international community whether or not they are willing to accept imports of agricultural commodities that include genetically modified or living modified organisms (LMOs). In addition, under the Protocol, shipments that contain LMOs are to be clearly labelled.

Exporters of seeds, live fish, and other LMOs that are to be introduced into a local environment from abroad must provide detailed information to each importing country in advance of the first shipment, and the importer must then authorise the shipment.

According to the United Nations Environment Programme (UNEP), the Protocol ensures that recipient countries have both the "opportunity and the capacity to assess risks involving the products of modern technology."

Environmental agreements involve the "precautionary principle," which allows countries to reject potentially dangerous practices without hard scientific proof that they are harmful to the environment.

UNEP emphasises that "though modern biotechnology has great potential for human well-being if developed with adequate safety measures for the environment and human health...the introduction of genetically modified organisms should not proceed faster than advances in scientific understanding."

Trade law, on the other hand, requires "sufficient scientific evidence," attesting to the danger of a product before trade in it can be limited.

In the short term the developing world will be flooded with their questionable produce unless developing nations fight to uphold the provisions of the Cartagena Protocol and in doing so force further research into the effects of transgenics. (SUNS4609)