ANOTHER CONTAMINATION SCARE DENTS US BIOTECH HOPES

Farmers Weekly 8 December 2000

The US government is still defiantly bullish about the prospects of
persuading EU consumers to accept genetically-modified (GM) foods.
However, at home, another GM scare involving non-food-use-approved maize
getting into the food chain is making farmers and processors
increasingly dubious. Alan Guebert reports.............

THE biggest question facing many US agricultural processors, exporters
and farmers today can be appreciated best by paraphrasing the old
nursery rhyme: "Starlight, star bright, do you know where your StarLink
maize is tonight?"

The US Department of Agriculture claims to know where the maize — banned
from all food use globally and only recently approved for US exports —
is located. Aventis, the French firm which developed the genetically
modified maize sold throughout the US maize belt in 1999 and 2000, says
it knows, also. So do I: StarLink maize is everywhere.

From Iowa to Osaka, from taco shells to chicken feed, StarLink is spread
throughout the US food, feed and export chain. In late October, StarLink
was found in Japan. On Nov 1 the US Food and Drug Administration,
America's food safety watchdog, issued a recall of more than 300 food
products that contain StarLink.

The mess has split US farmers. The National Corn Growers Association,
viewed as the spokesgroup for most maize farmers, defends StarLink and
has attempted to calm foreign customers. It has also worked closely with
USDA and Aventis to get the maize approved for feed and non-food exports
(which occurred Oct 26) and is working with both for food-use approval
in the US.

The smaller, but more outspoken, American Corn Growers Association has
publicly chastised every government agency, Aventis and the NCGA for
creating the StarLink controversy in the first place. The partial
approval of StarLink for just domestic feed and industrial markets was
"a recipe for disaster and disaster is what we now have", said one of
its officials in mid-October.

The "disaster" is two-fold and growing. First, the Oct 26 export approval
for feed and non-food uses almost guarantees that StarLink is present in
maize already sent overseas. That will slow any new exports while buyers
locate and isolate it, since America's biggest maize customers have laws
banning StarLink. More importantly, the export approval is seen as a US
confession that it cannot deliver what it promises — grain that meets
foreign specifications.

Japan, America's largest maize customer, offers an example. StarLink was
found in Japan on Oct 25. The previous week, Japanese importers ordered
690,000t of US maize, or 97,600t a day. After the discovery, though,
Japan ordered only 85,000t for the week of Oct 20-26.

Second, US farmers, merchandisers and food processors face inestimable
losses for StarLink if they hold even a handful of it. Oct 31 press
reports from Iowa, the leading US maize producer, suggest that half, or
50.8m tonnes, of the state's $2bn (£L2bn) 2000 crop may contain traces
of StarLink mixed with "clean", or non-StarLink, maize. If accurate, the
cost of the cleanup will explode. Aventis has promised to pay StarLink
growers a tiny $10/1 (£6) for the maize grown from seed. But it
has not agreed to pay the bonus on maize mixed with StarLink. Iowa
officials, however, are pressing Aventis to buy both StarLink maize and
maize mixed with the stuff. That could push Aventis's projected
liability from $100m (£62m) nationwide to more than $250m (£155m) in
Iowa alone.

An Iowa merchandiser who has detected StarLink in two separate
trainloads of maize guesses his losses at $35,000 (£22,000). "I am
sending the bill to Aventis," he said, in a Nov 2 newspaper story. "If
they pick up the tab, we won't sue." His attitude is universal.

Farmers with StarLink are trapped in an even tighter box. Aventis has not
guaranteed it will pay farmers for maize commingled with StarLink. And
StarLink users, like livestock feeders, are also backing away from it
unless they can buy it for a discounted price. Another big projected
user of it, ethanol makers, do not want it, either. Ethanol makers who use
the wet-milling process have promised export customers of maize gluten,
ethanol's biggest by-product, they will not use StarLink. Wet milling
accounts for 60% of America's 1.5bn gallons of ethanol.

"I do not know what I am going to do," says one Nebraska farmer who mixed
685t of StarLink with more than 1270t of non-StarLink maize. He also
admits he sold 330t of StarLink to his local merchandiser who, he
guesses, dumped it into a silo containing 2538t of "clean" maize. "I did
not know I was not supposed to sell it," he says. Ironically, the farmer
was also a salesman for StarLink.

His plan to end the StarLink nightmare? "I will put the maize under
government loan. That way if this problem get worse I can just dump it
on the government next year and say you guys created this monster; you
clean it up." He adds: "I have learned my lesson. No more GMO crops on
this farm — ever."

USDA and farm groups hate to hear such groanings; they have staked too
much on biotech to concede defeat now, even if farmers retreat.

Indeed, USDA now is pushing for approval of StarLink in domestic food,
mostly because it is the only way to recapture the StarLink genie. In
other words, the government sees the problem and hopes to solve it by
saying: "There is no problem." Oh, but there is. Just ask anyone holding StarLink.