July 1, 2003 Wall Street Journal U.S. Farmers Decry EU Proposal Europe Is Poised to Lift Crop Moratorium, But U.S. Farmers Say Move Is 'Stupid' By Scott Miller and Scott Kilman Europe would become an even tougher market for U.S. farmers raising genetically modified crops under pending rules that would require wider warning labels on food and a lot more red tape. In addition to setting back American agribusiness hopes for expanding into the world's second-richest market, legislation expected to be passed by the European Parliament on Wednesday is likely to aggravate an already bitter trade dispute between the U.S. and European Union. Among those hit hardest would be U.S. soybean farmers, whose exports to Europe have been cut in half over the last five years, to $1 billion annually, after earlier European action against genetically modified crops. Among other things, the new rules would require warning labels on two new products -- cooking oil and livestock feed -- that are largely made from genetically modified U.S. soybeans. Some European supermarket chains already say they won't stock cooking oil carrying a genetically modified warning label. And antibiotechnology groups in Europe plan to put pressure on farmers to avoid using U.S. soybeans to fatten animals. The EU also will require food imports to show their genetic history with a comprehensive paper trail leading back to the farm, a requirement some U.S. grain exporters and farm groups say is impossible to satisfy because of the way grains are mixed in the U.S. industry. Bob Callanan, a spokesman for the American Soybean Association, which represents U.S. soybean farmers, called the proposal "outrageously stupid." Last-minute additions to the legislation would give individual countries powers to greatly limit the planting of genetically modified crops within their own borders. The action by the 15-nation trading bloc's legislative body is certain to aggravate the EU's trade relations with the Bush administration, which has filed a complaint at the World Trade Organization over the EU's five-year-long moratorium on approving new genetically modified crops for planting and consumption. U.S. farm groups already are urging Washington to file a new complaint as soon as the latest rules become law, probably this fall. The proposed rules would officially end the moratorium, but U.S. critics say the legislation would effectively douse demand for any new genetically modified crops, as well as the few genetically altered crops already in the EU market. The EU approved the consumption of Monsanto Co.'s herbicide-tolerant soybeans in 1996, before public opinion in Europe swung against crops using biotechnology. U.S. farmers are using genetically modified seed to, among other things, grow plants that tolerate exposure to herbicides, thus making it easier to weed their fields without damaging their crops. Some farmers in Spain raise corn that is genetically modified to resist certain insects. European lawmakers are in a pickle. On one hand, many of their scientists acknowledge they have little ground to challenge the safety of America's genetically modified crops -- a fact that weakens the EU's case before the WTO. But it is politically unwise to open the floodgates to a technology that most European consumers say they don't want on their dinner table. By requiring more labeling information, Europe's lawmakers are effectively putting responsibility on consumers to keep out genetically modified U.S. farm products. "Because of these rules, U.S. farmers are going to lose market share," said Alexander de Roo, vice chairman of the European Parliament's committee on environment, public health and consumer policy. European consumers are far more leery of science's ability to move genes between plants than are consumers in the U.S., where crop biotechnology has swept across the Farm Belt and food products don't have to be labeled to note the presence of genetically modified ingredients. The outbreak of so-called mad-cow disease in Europe in the 1990s shattered the public's confidence in food regulators and in the safety of intensive farming practices. The EU has required warning labels on many genetically modified food products for years. Indeed, the proposed rules won't have much impact on most U.S. packaged-food companies that do business in Europe because they have reformulated their products to remove any genetically modified ingredients. "If consumers don't accept [genetically modified products], the end of the moratorium won't matter," said Austin Sullivan, a spokesman for General Mills Inc. of Minneapolis, part of joint ventures that sell such items as breakfast cereal and snacks in Europe. The proposed rules' burden would fall mostly on U.S. farmers and the companies that export their crops to Europe. Lawmakers will consider two pieces of legislation in a debate that starts Tuesday. One would begin to require warning labels on products containing genetically modified ingredients even if the food-processing technique has destroyed any evidence of their presence, which is the case in cooking oil. The legislation also would create an elaborate paper trail on any genetically modified ingredients. Under the proposed rules, EU regulators would have to be able to trace the genetically modified grain used in a product back to the farm. The American grain industry isn't set up that way: Crops that leave a farmer's field quickly lose their identity. U.S. farmers typically sell their crops to a local merchant, who dumps their crops into big bins. The merchants, in turn, sell their grain to processors that create huge stockpiles from which to fill orders from around the world. For example, a single ship carrying soybeans headed to Rotterdam, Netherlands could easily hold the commingled production of thousands of U.S. farmers.