SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOCAGRICULTURAL BIOTECHNOLOGY
WEDNESDAY, MARCH 3, 1999
House of Representatives,
Subcommittee on Risk Management,
Research, and Specialty Crops,
Committee on Agriculture,
The subcommittee met, pursuant to call, at 10:35 a.m., in room 1300, Longworth House Office Building, Thomas W. Ewing (chairman of the subcommittee) presiding.
Present: Representatives Barrett, Smith, Lucas of Oklahoma, Moran, Jenkins, Gutknecht, Walden, Simpson, Fletcher, Condit, Dooley, Pomeroy, Baldacci, Goode, McIntyre, Stabenow, Ethridge, Boswell, Lucas of Kentucky, and Stenholm (ex officio).
Staff present: Lynn Gallagher, John Goldberg, Stacy Carey, Ryan Weston, Jason Vaillancourt, Callista Bisek, Wanda Worsham, clerk; Russell Middleton, and Andy Baker.
OPENING STATEMENT OF HON. THOMAS W. EWING, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOS
Mr. EWING. The subcommittee will come to order.
I welcome you all. It is good to have a nice crowd today. I am pleased to convene the first Washington hearing of the Subcommittee on Risk Management, Research, and Specialty Crops in the 106th Congress.
The purpose of this hearing is to discuss what I believe to be one of the most important issues for U.S. agriculture: agricultural biotechnology.
More than any other issue or program, agricultural biotechnology impacts numerous industries: science, technology, nutrition, environmental management, international trade, and production agriculture are impacted by biotechnology.
Page 2 PREV PAGE TOP OF DOC The benefits of agricultural biotechnology are numerous. Biotechnology allows us to develop cross resistent to pests and disease. Less application of pesticides is a benefit to the producer and to the environment.
Biotechnology also allows for more efficient production of food; an increasing concern for the 21st century. This industry holds great promise for U.S. agriculture. In order to preserve this potential, we must be diligent stewards of this industry. We must value the science. We must foster the innovation. We must support research efforts. Most importantly, we must regulate responsibly.
On the regulatory front, EPA is proposing to create and regulate plants, derived through biotechnology, with pesticide characteristics.
The rule, if finalized would apply Federal pesticide laws to genetically modified plants. This initiative troubles me for a couple of reasons.
First, it was proposed over 4 years ago. Second, the scientific community has raised concerns about the validity of the rule.
Because of the concerns raised by this initiative, this subcommittee, along with Chairman Goodlatte's Subcommittee on Department Operations, will hold a joint hearing on March 24 to review this rule.
To that end, we have requested EPA's withholding any action intended to finalize this regulation until the House Committee on Agriculture is thoroughly able to review this regulation.
I know that the industry has been reviewing this regulation for a number of years and working with the scientific community to develop a consensus. I support this dialog and look forward to hearing about the outcome at our hearing.
I do not want this issue, however, to distract from the main purpose of today's hearing so that we may further learn about the importance of this thriving industry.
Page 3 PREV PAGE TOP OF DOC We have a number of distinguished witnesses with us this morning to share their thoughts and views about this critically important industry.
I will now turn to our ranking member, Mr. Condit.
OPENING STATEMENT OF HON. GARY A. CONDIT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Mr. CONDIT. Thank you, Mr. Chairman.
I want to thank Chairman Ewing for convening what I believe to be a very important hearing on an issue that is having a tremendous impact on agriculture. Agriculture is no stranger to technology, innovation, and change.
As a matter of fact, if you look at the history of agriculture, that we depend on technology and change for a major component of growth in agriculture. So, this is very important to us.
We appreciate the witnesses being here today, Mr. Chairman. We appreciate your attention to this issues. With that, I look forward to listening to the witnesses and may have some questions for them.
I have a statement that I will place in the record and allow anyone else on this side to make any comments that they have, Mr. Chairman.
[The prepared statement of Mr. Condit follows:]
PREPARED STATEMENT OF HON. GARY A. CONDIT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
I want to thank Chairman Ewing for convening what I believe to be a very important hearing on an issue that is having a tremendous impact on agriculture. Biotechnology is an increasingly prominent component of agriculture, medicine and industry. Our ability to isolate and modify genes and to move them across species barriers is powerful and promising, but is plagued by ethical and pragmatic uncertainties.
Page 4 PREV PAGE TOP OF DOC Advancements in science and technological breakthroughs in the understanding of the biology of plants, animals, humans, and organisms at the molecular level, combined with the power of new information technologies, are creating a new technology platform, that is, biotechnology. This powerful technology base, combined with the development of enhancing technologies, such as genomics, bioinformatics, and proteomics, is speeding up the identification of genes that control valuable traits, shrinking the timelines to commercialize new products, and expanding the commercial potential of biotechnology across a growing number of market sectors, including agriculture.
Agriculture is no stranger to technology, innovation, and change. Looking back through history, technological innovation has been the key to the growth of production agriculture. Production agriculture has been shaped by technological breakthroughs that have brought to the farm crop inputs, such as hybrid seed and crop protection chemicals. In addition, technological innovation has moved farm mechanization from the early days of the plow to today's four-wheel drive tractors, outfitted with precision farming technology. These technologies have been geared toward boosting farm productivity, which has improved farmers' bottom line profits, and made farmers' lives easier. These technologies have helped shape the business structures that form the foundation of today's agribusiness infrastructure.
While the technology being brought to the marketplace over the next 5 years will largely continue to focus on input traits, it's long-term potential lies in the development of value-added. output traits that will address a wide range of needs. The ability to create proprietary value added traits will turn many agricultural commodities into premium-priced specialty and quasi specialty products. This will dramatically change what farmers produce, redefine what markets demand, re-engineer the agricultural production and distribution infrastructure to meet the new demands of the marketplace, and redefine the linkage between the farmer and the end-user.
Page 5 PREV PAGE TOP OF DOC It has been a long-held vision that agricultural biotechnology would transform and usher in a dynamic new era of growth for agriculture. As a matter of fact, the potential appears to be even greater than what many had thought just a few years ago. Experts continue to believe that the potential economic and business impacts of agricultural biotechnology remains severely underestimated. This new developing technology-base will not only create products that will help improve farmers' productivity, but more importantly, will dramatically expand the value creation potential of agriculture and the linkage of agriculture with our industrial-based economy.
Ultimately, the success of agricultural biotechnology will be decided in the market place. Past experience indicates that consumers can effectively sort through misinformation, and decide about the real value of new goods and services. When color TVs were introduced there were warnings about potential risks from ''mutations''. With microwave ovens there were warnings about risks of ''abnormalities'' from radiation. The widespread adoption of both technologies suggests that when scare tactics lack solid scientific evidence they tend to be short-lived. This will, no doubt, prove true for agricultural biotechnology as well.
The biotechnology industry must continue to create technology that enhances our ability to produce affordable, safe, high quality food. At the same time, the pressure on natural
resources should be minimized. The government must also do its part. It must ensure the efficacy, quality, and safety of new products, while resisting the temptation to engage in social engineering. Questions of whether new products are desirable, or needed, are best answered by consumers in the market place, rather than by governments.
Thank you again for holding a hearing on this important subject and I look forward to the testimony from today's witnesses.
Page 6 PREV PAGE TOP OF DOC Mr. EWING. Thank you, Mr. Condit.
I also have statements from Chairman Combest and Mr. Smith which will be entered in the record also.
[The prepared statements follow:]
PREPARED STATEMENT OF HON. LARRY COMBEST, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS
I congratulate Mr. Ewing and Mr. Condit for holding this very important hearing on biotechnology and U.S. agriculture.
Imagine a process that gives us the ability to protect crops from insect damage, reduce pesticide use, provide for increased crop yields without increasing land use, and allow greater agriculture efficiency. These are some of the benefits of biotechnology.
The United States is the leader in agricultural biotechnology. Modern agriculture technology is one of the most promising developments in modern science. Used in collaboration with traditional methods, it can raise crop productivity, increase resistance to pests and disease, develop tolerance to adverse weather conditions, improve the nutritional value and taste of some foods, enhance the durability of products during harvesting or shipping, and create new markets for specially tailored crops. Biotechnology will result in greater productivity, efficiency and profitability for the United States producers.
American farmers recognize the value of biotechnology. For instance, in 1996, in the United States, approximately 3 million acres were planted with biotechnology seeds and products. Just 2 years later, that figure was estimated to be 50 million acres. This represents about 75 percent of the global biotechnology plantings.
According to the U.S. National Academy of Sciences there is no evidence of any hazards to food products or the environment with the use of biotechnology. Also, the United Nations' Food and Agricultural Organization (FAO) has concluded that the use of biotechnology does not result in food that is inherently unsafe.
Page 7 PREV PAGE TOP OF DOC The purpose of this hearing is to review the status of biotechnology in U.S. agriculture, its future potential for our farmers and ranchers, and its impact on exports of U.S. agricultural commodities and products.
I welcome all of our witnesses, from the administration, commodity groups making use of the benefits of biotechnology, and the industry responsible for production of these products.
I do want to raise an issue that I hope will be discussed by the subcommittee witnesses. The approval process for biotechnology products, both for the United States and for countries that buy our agricultural products, must be thorough and comprehensive. Producers, processors, the retail food industry and consumers must have confidence in the system. However, this process should not be used as a barrier to U.S. exports.
I am informed that the biotechnology approval process in the European Union is based more on politics than on science. I hope the Subcommittee witnesses will provide their thoughts on this matter.
Thank you Mr. Chairman. I look forward to a very interesting hearing.
PREPARED STATEMENT OF HON. NICK SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN
I would like to thank the chairman for holding this important hearing on biotechnology in U.S. agriculture. There is no doubt that biotechnology for agriculture is opening new horizons for American producers. Biotechnology provides the potential to greatly increase yields while reducing pressure on marginal lands. It also could lead to less reliance on pesticides and reduced water usage.
The biotech revolution underway is perhaps the most important single event in the history of agriculture. Not only will genetically modified products lead to decreased pressure upon the land, biotechnology also gives agricultural producers the technology to transform today's commodities into food and fiber products with new attributes and purposes. These include enhancing human health, overcoming environmental problems, enhancing taste, and lowering costs to the consumer.
Page 8 PREV PAGE TOP OF DOC Some have raised concerns over the safety of genetically modified products. USDA has a very effective program which regulates crop and livestock biotech products to ensure that no ''rogue'' products are released into the environment. EPA and FDA also regulate biotech products. Combined, these regulatory controls are the most stringent in the world. No other country requires such comprehensive tests and proof of the absence of problems before a product is made available to the general public. This system has served us well. Its success is demonstrated in the tremendous confidence American consumers have in the safety of agricultural products on the shelves or our Nation's retail outlets.
There is no doubt that biotechnology represents the future of U.S. agriculture, and indeed, agriculture in general. In just three seasons on the market, biotech products account for 50 percent of soybean and cotton production and 40 percent of corn plantings in the United States. Many more commodities which have been genetically engineered will soon be available. As a result, consumers are increasingly reaping the benefits of increased production, lower prices, and higher quality agricultural products.
I look forward to hearing from our witnesses today on this fascinating subject and learning more about our ability to market these products on a global basis.
Mr. EWING. Thank you gentlemen.
We will now proceed to our first panel. We are very pleased to have the Honorable August Schumacher, Under Secretary for Farm and Foreign Agricultural Services. He is accompanied by Tim Galvin, Administrator, Foreign Agricultural Service; and Mr. Jim Murphy, Assistant U.S. Trade Representative for Agricultural Affairs, Office of the U.S. Trade Representative.
You have a lot of headaches down there; have you not?
Mr. MURPHY. We do, sir, yes.
Page 9 PREV PAGE TOP OF DOC Mr. EWING. Mr. Schumacher.
Mr. SCHUMACHER. Thank you very much, Mr. Chairman, and members of the subcommittee for having me before you. I do have a full statement for the record. With your permission, I would like to insert it.
Mr. EWING. Without objection, so ordered.
Mr. SCHUMACHER. I am very pleased that Mr. Galvin and Mr. Murphy have been working with us very, very heavily over the last few years, especially in Europe, and doing an outstanding job.
Also, as the more detailed questions may come up, I would, with your permission, like to call on Dr. Richard Parry, who is with the Agricultural Research Service and Michael Schectman with APHIS. If we have some very technical questions, we might want to defer to them.
Mr. Chairman, as we start off, much of the success of our extraordinary family farms in this country is due to the commitment to our agricultural research; a commitment that has benefitted our farmers and benefitted farmers around the world, especially in developing countries for more than a century and a half.
That research has paid off. Our Land Grant System, and its accomplishments, have been a model for international research.
In the post-war period, the Ford and Rockefellow Foundations have looked at our successful Land Grant System and funded international agriculture initiatives that have eventually evolved into the great international research centers, such as the International Center for the Improvement of Corn and Wheat in Mexico, and the International Rights Research Institute in the Philippines.
It was at these centers that Norman Borlog and Edwell Housen, in the 1950's and 1960's, adapted breeding techniques, developed from their Land Grant work, into the short stem varieties of wheat and rice.
Page 10 PREV PAGE TOP OF DOC These new varieties help farmers around the world to produce more to feed these countries, their countries, and to develop germ plasm that has been critically important to our own wheat and rice producers.
Secretary Glickman and I visited the Simmit several years ago. On the wall of one of their labs is a statement that says, ''In these rooms research was done that saved 100 million lives.''
For that work, Norman Borlog received the Nobel Peace Prize; not the Nobel Science Prize, the but the Nobel Peace Prize. Let us fast forward and examine the next two decades. The world's population, stable and developed countries, continue to grow by about 75 million people in developing countries.
An estimated 750 million in another decade, and in two decades, 1.5 billion people, mostly in Asia and Africa. Yet, my science friends tell me that yields on major crops in these countries, usually wheat and rice, may be leveling off.
In the developing world 80 percent of the recent growth in wheat production has come from increased yields, while only 20 percent was the result of more land being planted. For example, now over half the world's fertilizer is used in developing countries.
Half the grain in China is now irrigated. New irrigation in these countries face environmental, technical, and particular cost barriers. We have seen some of the problems in China.
Then threeprojects and all of the problems that has created, both in China and elsewhere. This is compounded by the fact that land resources of finite, especially in these countries.
So, how, how will we bridge the gap between the need to feed another 1.5 billion people in two decades' time, and limited land and costly water resources?
Traditional research techniques, such as those used by Norman Borlog, who won the Nobel Peace Prize, simply are not going to be able to deliver the quantum jumps in yields that we are going to need over the next two decades, at a minimum, and beyond.
Page 11 PREV PAGE TOP OF DOC In short, returns on traditional techniques, the techniques that Henry Wallace used back in the 20's and 30's to give us hybrid corn, are now diminishing. That is why new research techniques and products, such as biotechnology, offer such promise.
These products can reduce chemical use, protect the environment, and improve pest resistance. Around the globe, public and private researchers are developing these techniques to increase the critical issue, as I have said, on yields.
Mr. Chairman, we need these new varieties. We need to honor the next Norman Borlog with another Nobel Peace Prize, a scientist, yet to be defined, who will make the next great breakthrough in research, probably in biotechnology, that will save 200 million lives in the next two decades. We are working vigorously to promote these technological improvements in this country.
Some countries have not matched the scientific advances with the necessary policy and regulatory adjustments. Some have raised questions about the safety of these products. I will conclude on some of these issues.
As Secretary Glickman has said, we should consider these advances seriously and with an open mind. New products, be they bioengineered or not, must meet the law of the land, and undergo vigorous and rigorous testing.
Our regulators, APHIS, FDA, and EPA, must maintain an independent and arms length relationship with the sponsors of these new technologies. As these products prove safe, using an independent and objective eye, we must use their immense potential to combat hunger and to ensure a sustainable future.
The United States views biotechnology and genetic engineering just as another set of tools through which agriculture can meet the demands of consumers for abundant, safe, nutrition, and affordable high quality foods.
Fortunately, other nations share this view: Argentina, Australia, Canada, Chile, and Uruguay are working with us to encourage the adoption of standards that facilitate trade, while giving full protection to consumers' health and safety. Other countries such as the European Union have similar concerns.
Page 12 PREV PAGE TOP OF DOC For example, since March 1998, over a year ago, the European Union has approved no food products in biotechnology; only two carnation varieties. Their system is has now become frozen in approval of these important technologies.
Mr. Chairman, biotechnology is not a new science. In fact, we trace it back to the 1800's when Greg Amendo began cross-pollinating peas.
For hundreds of years, virtually all of the food has been improved genetically by plant breeders. I mentioned Henry Wallace. Most cheese, yogurt, and yeast products contain genetically modified enzymes.
We have no reason to fear these products. We eat and drink them every day. We recognize that new technologies in any fields can pose risks. Yet, we must let sound science be our guide.
Objective science-based regulations can provide the necessary protection that allow us to take advantage of the benefits that these new technologies offer.
Just last week, researchers from Dartmouth in New Hampshire and the University of New Castle in England announced a gene they have isolated that controls the iron content of plants. This would be an extraordinary first step in solving one of the world's most significant nutritional problems: iron deficiency; a problem so severe it is sometimes called ''hidden hunger.''
While this is just the first step in helping farmers grow iron-rich plants, it is just one example of the extraordinary research that is happening in laboratories around the world.
The new scientists will be wearing white coats, whereas Norman Borlog had boots on and tried to identify theso we have come a long way in the way who is going to do the science in the future.
No one wants to dismiss legitimate concerns of the safety and ethics that biotechnology may raise. When all of the evidence tells us that genetically engineered grains are as safe to produce and consume as any seed that is conventionally bread, then we must allow and encourage consumers and farmers to benefit from that technology.
Page 13 PREV PAGE TOP OF DOC Mr. Chairman, that completes my short statement. I look forward to answering any questions you may have.
[The statement of Mr. Schumacher appears at the conclusion of the hearing.]
Mr. EWING. Thank you, Mr. Under Secretary.
Mr. Galvin or Mr. Murphy, do you have anything?
Mr. GALVIN. No statement.
Mr. EWING. No statement. Mr. Murphy?
Mr. MURPHY. I thank you, Mr. Chairman, and members of the subcommittee. It is a pleasure to appear before you this morning with Under Secretary Schumacher to discuss the trade benefits and challenges of technology, which are critical for U.S. agriculture.
Let me first spend a moment on some of the benefits, Mr. Chairman. You mentioned a number in your opening statement. In the view of most observers, biotechnology is probably the key to achieving global food securityyields in the foreseeable future.
It is the biggest increase in productivity since the Grain Revolution in the 1960's, which Under Secretary Schumacher has referred to. Just as an example, in the strains of pesticide resistant corn, U.S. farmers are seeing increases of 11 to 25 percent.
It varies depending on the density of the pests in your area. The good news is, of course, that we are in a leadership role on this technology and in a good position to maintain that leadership.
Second, it offers the possibilities of improving human health. We are going to see foods being offered with improved nutritional qualities. One major U.S. company is very close to commercializing a product of that nature. We will see pharmaceutical properties added to foods. That is a little further off. It is of potential benefit.
Page 14 PREV PAGE TOP OF DOC Thirdly, agriculture would be more environmentally friendly and sustainable. Herbicide and pesticide usage is being reduced. There is less need for tractors and other equipment to pass over fields, reducing fuel consumption and reducing compaction of the soil.
Fourthly, we are going to see seeds increasingly targeted to the environmental conditions of particular geographical areas. Most of the products on the market today have one bioengineered trait.
We are now beginning to see the first products with more than one trait; what are called stacked genes. More and more, we will see lots of different features engineered into a particular seed to address the needs and the particular environmental characteristics of areas, which should increase yields even further.
Of course, as we know, U.S. farmers have been very quick to adopt this new technology. Last year, we had about 25 percent of our corn acreage in biotech varieties; about one-third of our soybeans; and somewhere in the neighborhood of 40 percent of our cotton. So, it is catching on and spreading very quickly.
Let me turn briefly, Mr. Chairman, to our experiences with other countries and the implications for U.S. trade of this new technology. With most countries, our experiences are positive.
With Canada, for example, USDA has reached a Memorandum of Understanding last year with Canadian regulatory authorities for exchange of information, some harmonization of our procedures, which is a very positive development.
In Japan, we have had an excellent working relationship on approvals of new products. Some concern last year when the Ministry of Agriculture introduced a proposed new rule on labeling.
We have been talking very closely with them and they seem to be heading in a positive direction on finalizing that rule. Argentina, the approval process has worked very well. Argentina had somewhere in the neighborhood of 3 million acres planted in Round-up Ready soybeans last year.
Page 15 PREV PAGE TOP OF DOC Our big problem, and really the only major problem that we have encountered, Mr. Chairman, has been with the European Union; both on the approvals and the labeling issues.
On approvals, there have been problems from the beginning. Their approval system is controlled by their Directive 90/220, which is an environmental directive. The process has taken too long. It is not transparent. It is overly politicized.
It is not unusual for a company to find that their product is approved by a scientific level group in a member state, only be overturned by a political level group, and the member state vote negatively on that product.
In essence, this approval process has ceased to function. No new product has been approved since last year; spring, almost a year. Member states are either abstaining or voting negatively for a variety of reasons.
I should stress that the problem is not, in our view, with the EC, but it is at the member state level. We, of course, are talking to these member states, but there is no one common theme that causes them to abstain or vote negative. It is a variety of different reasons.
The EU does acknowledge they have problems with this process. They have amendments under consideration for changing this directive. It probably is another year or two before those amendments are implemented. We have got to do something in the short term.
On labeling, they introduced new regulations last September which focused more on the production process than on the nutritional components or safety of the product, which we think heads them in the wrong direction.
Our industry has been waiting to see how those regulations are articulated and further detailed. There are some gaps that they need to fill in.
We have put down a formal marker in the WTO indicating that we think the regulation is probably not consistent with their WTO obligations.
Page 16 PREV PAGE TOP OF DOC In terms of the U.S. response, we have been working very closely with both U.S. and EU companies through the Transatlantic Business Dialogue. That group has come up with a series of very specific recommendations for the two Governments to consider adopting, and we are doing so.
As you may know, there was included in the Transatlantic Economic Partnership Action Plan of last year, the establishment of a Biotechnology Group, which had its first meeting on February 11 of this year.
Also, the establishment of a pilot project where companies will be invited to simultaneously file for approval, both in the EU and the United States. This will encourage a dialogue between our scientists and regulatory authorities in hopes that we may overcome some of the problems in the EU process.
That concludes my short statement, Mr. Chairman. I look forward to responding to questions.
Mr. EWING. Thank you to all members of the panel.
Mr. Under Secretary, could your elaborate a little more regarding the acceptance of biotechnology products in global markets?
It appears that our trading partners are rather arbitrary in restricting access to their markets for our biotechnology products. There does not seem to be a lot of good science out there to back that up; back up their failure to allow us into their markets with our products.
Could you comment on that and what the USDA is doing about that?
Mr. SCHUMACHER. Yes, Mr. Chairman. Maybe Mr. Murphy could also outline some of that in his opening oral remarks and could expand on that.
Our main problem right now is with our EU. I think in other countries, USDA, APHIS, and all, working with STR in our embassies, we have been making some very good progress in South America and in other areas.
Page 17 PREV PAGE TOP OF DOC In fact, I think we are moving forward in that area. I think the issue is in Europe. As Mr. Murphy pointed out, we have some problems at the member states. Their biotech approval process, their engine is frozen.
We do not see the oil yet to unlock that engine in Europe. We are looking through the Transatlantic Business Dialogue. I think the TEP has others working on it and a number of issues. It is a very difficult one. I think as I testified or spoke in Europe, we had three problems with Europe.
I call them the three Bs: beef, bananas, and biotech; all before us and all difficult. So, we are hoping to resolve all three of those in the next few months or there are going to be some interesting developments between our trading relationship. That is the problem. That is where it is. That is what we are working on.
Mr. EWING. As a followup, it appears, and you did not mention any specifics. You say they are frozen. I could hardly agree they are. Do they have substantial reasons that they can back up for being frozen? That is the issue.
I think we all know, or many of us have our own beliefs whey they are frozen. They do not want us in there. They do not want the competition. We did not even bid, I guess, on selling corn to the EU this year with Spain that usually takes some of it because of the biotechnology issue.
We are drowning in corn. We ought to be getting it in to other markets. Do they give us anything specific? Well, they raised several issues.
Just on that point, Mr. Chairman, I must say we were very grouchy when we had it all approved, when there were some tenders put out.
That corn market in Portugal and Spain was provided to the United States and to our corn growers as a part of the accession for those too. That was our right to sell that corn in there.
Page 18 PREV PAGE TOP OF DOC In fact, it was approved in the EU and one member state managed to find, as Mr. Murphy pointed out, a technical reason not to allow that in. It made us very grouchy indeed.
Tim, I think maybe you could explain a little bit more. They allege a number of issues. We can go to the technical side if you wish. We think that they are not scientifically approved.
We have got an outstanding regulatory system here that goes through this in 9 months. We get new products approved done by the public in private research. They take sometimes 24 months and now the system is frozen.
Tim, do you want to expand on some of the issues you are sweating on?
Mr. GALVIN. If I might, Mr. Chairman, I think one of the fundamental problems is just a lack of leadership over there; leadership to explain to the public that indeed these products are safe and that a regulatory system really can be put in place that would safeguard human health.
I think the backdrop for a lot of this is the problems that the EU had with the BSE or the Mad Cow crisis. I think that lead to a general lack of faith on the part of the public that government agencies can regulate science and technology in a way that does safeguard human health.
As a result, on issues like biotechnology and now we are seeing it on hormones too, there just is an unwillingness on the part of EU officials to show the necessary leadership to move ahead on these issues.
Mr. EWING. My time is about up. I will come back. We will have more questions. I think they are dumb like a fox in their leadership. They are using us and they are using this issue to keep us out.
If we think this is just lack of leadership, I do not think we have got our finger on the problem with our trade with Europe. They may not have the leadership, but it is all intentional. They do not want us in there.
Page 19 PREV PAGE TOP OF DOC Mr. Condit.
Mr. CONDIT. Thank you, Mr. Chairman.
If I may, I would like to yield to the ranking member of the full committee, if he has a statement or a question that he would like to ask. I know he cannot be here for the whole hearing.
Mr. STENHOLM. Thank you.
I have only one question. I think you were just answering that, Mr. Galvin. Just out of curiosity, what is it about the Europeans that are making them so opposed to the utilization of technology, whether it is biotechnology or any other technology? How, why, or what are the conditions that make them so opposed to the acceptance, when in the United States we have some that disagree with it, but not to the degree of the Europeans?
What is it that is making a difference, other than the Mad Cow disease answer? Is there anything else?
Mr. GALVIN. I think another part of it is the fact that they do not have a single regulatory agency or a group of trusted regulatory agencies like we have, the FDA for example, that can speak with some confidence about how to regulate in this sort of area.
Mr. STENHOLM. I think, if I may, Mr. Fisher, himself, has said in a public statement that we wish we had, for the 15 member states, an FDA, an EPA, and an APHIS that would undertake the kinds of regulatory systems that our country, our consumers, and our farmers have.
They do not have that. It is going to take a little while to get that together. That is why the member countries seem to have more influence than they would have normally.
Mr. STENHOLM. Any hope in the foreseeable future of them getting that?
Page 20 PREV PAGE TOP OF DOC Mr. SCHUMACHER. We were visiting quite a bit their ministers of science and their ministers of agriculture. Their firms are seeing that they are going to be left in the lurch.
Their scientists are flocking to New Jersey, to North Carolina, to California, biotechnology scientists, because of the feelings that they are having. So, their scientists are walking with airplane tickets over here.
Also, the pharmaceutical side. Again, on the health side, a very important issue. They are really worried about this. They are trying to figure out how to keep their scientists.
Like in our technology in computers, if they lose their scientific capability in biotechnology and it all flocks over here, you will only exacerbate the problem. They are very worried about it. They are trying to figure out how to deal with this, especially in Germany and Austria.
Mr. STENHOLM. Thank you.
Mr. CONDIT. Reclaiming my time.
Mr. Under Secretary, I would like to do this quickly. I would like to followup on Mr. Ewing's questioning. That is, what if the EU just absolutely bands genetically modified imports? Does the United States have a plan to deal with that? Can you be specific in telling me what that plan is?
Mr. SCHUMACHER. I have been working very hard on these three B issues. I think you have seen what the leadership of Ambassador Barshefsky is on the banana issue. Certainly, we have been taking an extraordinarily strong view on the hormone issue.
I think on the biotechnology issue, people have seen what we have done on the first two Bs. Certainly, we will reserve all of our trade negotiating rights through the WTO. People have seen what kinds of themes we have taken on the first two. Certainly, we are going to reserve our rights.
Page 21 PREV PAGE TOP OF DOC Jim, do you have anything?
Jim has been working on this for 4 or 5 years and has been a very, very firm defender of American policy on biotechnology.
Mr. MURPHY. I would just add, as the Under Secretary suggested, you would obviously have to know why they put the ban in place. It is unimaginable to us that there would be a good science-based reason for doing that.
In which case, they would be vulnerable under the WTO and once again under the TBT Agreement, and the SPS Agreement for not having a science-based reason for doing this. This shows up in the hormones case, which the Under Secretary has mentioned.
So, I think we would have very significant tools for countering that ban. I think it highly unlikely that would happen. I think they recognize this is important technology that they need access to as well.
Mr. CONDIT. We already have acreage out there in commodities and crops planted. We are we going to do with those products?
What happens to the people because they cannot get them in right now? Do you have a plan for that?
Mr. SCHUMACHER. Well, the bulk of the soybean and corn acreage that we have, and it is a very substantial amount now, those are under products that have been approved several years ago in Europe. So, those are moving.
It is one, two, or three varieties, for example, in corn that has not been approved yet by Europe. What I think the companies are doing is tagging them in their agreement saying, these have not been approved.
If you plant these, these have not been approved in all countries and you need to put these on the local feed market and not put them in a normal commercial channel. So, their lawyers have worked this very carefully.
Page 22 PREV PAGE TOP OF DOC It is a very small amount in that regard that has been handled by the companies themselves. We encourage companies to do that for those that have not been approved. The bulk of the corn and soybeans have been approved in the past.
It is the new varieties that we are concerned about because so much research is going, not just in grains and old seeds, but across into now horticulture and other areas that are going to be so beneficial in the future. That is why we have to get this system fixed.
Mr. CONDIT. Can you quickly name for any other countries that are opposed to biotechnology products and why, besides the EU?
Mr. SCHUMACHER. Japan.
Mr. MURPHY. Japan has been quite good about approving these products. The only issue we have at all with the Japanese right now is on their proposed labeling of genetically modified products.
They have a proposal out to either have mandatory labeling or voluntary labeling. They have not decided which at this point. In general, the Japanese have been quite supportive of the technology.
Mr. CONDIT. My time is up. We will get back to you.
Mr. EWING. I am going to ask a question in here.
While we are on this issue about corn varieties being approved, is it not true though that were the USDA certify that our corn supply is indeed only those approved varieties?
I mean, as long as corn is being produced by unapproved varieties and the way our system works, that it gets commingled, are you willing to do that so that we can sell that corn the end of this season?
I mean, I think that is why did not sell to Spain. We would not certify that we had followed the rules. That the farmers who had grown corn that was not approved, kept it for local feeding. It is a very important issue as far as trade.
Page 23 PREV PAGE TOP OF DOC Mr. GALVIN. Mr. Chairman, if I may, I think that is a part of the issue right now. We do not segregate corn at harvest. So, we cannot certify that certain shipments are GMO-free, for example.
Mr. EWING. I understand what you can and cannot do. I am not being critical. The point is, I did not want it to be left like there were only a few out there and most everything we were growing was able to go into marketplace because of our system that commingles, which really keeps us from sending any of it to a country who does not accept it.
Mr. GALVIN. Absolutely. In the case of corn, we are shut out of the EU market, no question, because of the commingling.
Mr. EWING. Mr. Smith.
Mr. SMITH. Mr. Chairman, thank you.
I also happen to Chair the Research Subcommittee of the Science Committee.
The day before yesterday, Mr. Under Secretary, we were reviewing, at the National Science Foundation, the geno mapping of a flowering plant that they nowthey thought they were going to finish it in 2004.
Now, they expect to finish it by the end of next year, which is characteristic of most flowering plants. What that leads me to believe is that the genetic engineering in the agricultural biotechnology is ready to explode in terms of our ability to modify and increase production or otherwise accomplish some of the goals that are needed to increase the efficiency of production.
Mr. SMITH. It seems to me that the quicker we do something and the quicker we get in shape to assure any of our buyers the safety of these products, the better off we are.
Secretary Glickman mentioned, and you referred to it in your testimony, that we need to have good research and testing to make sure that these products are safe. What is out there? What are we doing?
Page 24 PREV PAGE TOP OF DOC Should we be expanding our research and testing to prove, within a reasonable doubt, that these products are safe, rather than calling on the EU or any other country to prove to us that they are not safe?
Mr. SCHUMACHER. Certainly, I think this is a very important issue. You are absolutely correct, Mr. Smith, that this is going much faster than I think anybody anticipated, even several years ago.
There is so much interest and the technology is changing so fast. So, the genome research, the mapping, as you point out, not only just on pharmaceutical, but it is coming over into the plants.
So, it is moving much, much faster. That is why I think the President put up additional money for the Agricultural Research Service.
What is occurring is that in the United States, more and more of the research, 70 percent of the plant scientists now in the United States work for private companies.
So, we need to have additional funding, as the President has submitted, for the Agricultural Research Service and for our FDA, and APHIS to undertake the independent science to keep up with this very fast moving pace that is moving forward. I think I very much appreciate your question on that.
Mr. SMITH. What research do we have now? Can you now or provide to this subcommittee the list of research that in some way tends to prove that there is no danger from these products. What do we have now?
Mr. SCHUMACHER. Well, Dr. Parry is here and Michael Schechtman. Maybe they could join us or we could get back to you in writing. I think maybe Dr. Parry could join us for one minute and reply to that.
He is an outstanding scientist in the Agricultural Research Service on that issue. With your permission, I could ask him to make a 30 second presentation.
Page 25 PREV PAGE TOP OF DOC Mr. SMITH. With the permission of the chairman, can the Secretary ask one of our researchers to make a comment?
Mr. EWING. Absolutely.
Mr. PARRY. Thank you, Mr. Chairman.
My name is Richard Parry. I am with the Agricultural Research Service. The USDA does have a very active program on biotechnology, risk assessment research programs.
This is done through a competitive grant program operated by the Cooperative Research, Education, and Extension Service. It is funded through a tax on all biotechnology research conducted in the USDA.
That has been a major effort to explore the possibility for the spread of genes and the environmental affects, and other health affects that could be resulting from biotechnology research. This work will be continuing.
Mr. SMITH. Any conclusions? Has there been any research that has been done or completed that can give us any guidance in our list of defenses that these products are safe?
Mr. PARRY. Proving a negative is very difficult. So far, there have been no untoward affects that have been discovered. There has been a variety of challenges made about potential problems.
However, these have not proven to be sustianing in their actual research studies that have been done to date; nothing that cannot be handled within our current clearance system.
Mr. SMITH. Should we be more aggressive in funding for this research? It seems to me that the future is going to really be overwhelming us in terms of the challenges from these other countries using any excuse they can to keep our products out.
Mr. SCHUMACHER. If I may ask Mr. Galvin. This is a very important issue. We put up an additional request for funding. Michael Schechtman is APHIS, in terms of the regulatory side. As I indicated in my opening statement, FDA, APHIS, and the ARS do an outstanding job in getting in front of this.
Page 26 PREV PAGE TOP OF DOC Tim, do you have a thought on this one?
Mr. GALVIN. Mr. Smith, if I might, I think we are doing all of the necessary research and testing that we need to do to continue to prove that these products are safe.
I think one thing that we have been doing a lot of, but still need to do more of is really an outreach effort, where we go out and explain to these countries what the U.S. regulatory system is all about, how we can ensure the safety of this particular technology.
I could go down a long list of all the activities that we have been doing, including hosting visiting delegations of scientists and regulatory officials, consumer groups, environmental organizations from Europe and elsewhere. Recently, for example, we cosponsored a symposium in Egypt to explain to the Egyptians how a regulatory system works in the area of biotechnology and to help them establish theirs.
We have been engaged in discussions with Chile and Argentina; a part of what we call our Consultative Committee on Agriculture, to try to make sure that our regulatory system is in sync with theirs.
So, we have been trying to spread the word about the effectiveness of the regulatory system we have in place and about the safety of this technology. It is a very resource-intensive effort.
We have received good cooperation from FDA and APHIS. I think there is a limit as to how many folks they can send around the world to the various symposia that are occurring on this issue to try to explain what we are doing here in the United States.
Mr. SMITH. Thank you, Mr. Galvin.
Thank you, Mr. Chairman.
Mr. EWING. Mr. Pomeroy.
Mr. POMEROY. Mr. Chairman, I want to thank you for a very interesting hearing and an important one at this point in time. I have been reading the British newspaper. This Internet is a wonderful thing. You can read newspapers from all over the world on any given morning.
Page 27 PREV PAGE TOP OF DOC There is something that you did not say relative to European resistance that I think needs to be evaluated and it is cultural as well. There is a cultural resistance to this at the popular level that makes this a political hot potato for politicians trying to advance these products.
It makes it very difficult, from our point of view, in trying to sell the product. I think when it comes to food, as a component of commerce, we have got to understand that we cannot force our customers to eat our food. They are going to have to eat our food because they want to eat our food, because they feel good about it, because it is quality. Certainly, the bottom line is safety. Therefore, I think we need to change how we approach this.
Frankly, I think we need a market strategy, a market-based strategy, on ultimately advancing the acceptance of biotechnology produced food globally. Let us look at what attributes biotechnology brings us in production.
Production efficiencies. Now, that ought to be lowered cost. It ought to mean less pesticide use, which has its own appeal.
Nutritional qualities. That ought to also be recognized ultimately in the marketplace as an enhanced and superior product.
So, to those parts of the world that do not have this almost cultural bias against this type of technology, we can begin to develop a superior product, and a cost effective product that will beat our customers, unless they are unfairly subsidizing, and we have got other ways to deal with that. It is a straight up subsidy matter.
As we deal, however, right to the heart of Europe, the base of biggest resistance to this product it seems to me, we have to have a longer term strategy and one that recognizes the nuances of that marketplace. There has been component after component of U.S. commerce that has failed in global trade because they have not appreciated the environment into which they are trying to sell their product.
Page 28 PREV PAGE TOP OF DOC I think that we really have to evaluate that with agriculture as well. Why in the hell do we not segregate so we can certify, if that is what they are demanding, to sell corn? That is, to me, totally absurd for us not to take that basic step.
I do not agree with Europe in their position on this, but let us be competitive as we try and exploit the advantages of global trade, regardless of the sector.
So, ultimately I think that a strategy that basically says we are the United States. We produce good food. You have got to buy it. You have got to eat it, is inevitably going to fail. We have got market-based advantages to the biotechnology in our agriculture production.
Ultimately, that will carry the day. In the meantime, we ought to deal with the nuances of local cultures and political systems so that we sell what we can. I would like you to respond to that observation.
Mr. GALVIN. If I might, Mr. Pomeroy, believe me when we make this pitch, if you will, to the Europeans and others, about biotechnology in the United States, our arguments go well beyond just the fact that we think the technology is safe and therefore you ought to buy it.
We do go on to make all of these additional arguments about benefits to the environment and potential benefits in terms of nutritional content and that sort of thing. Especially when, I think, the next generation of biotechnology products comes along that really will offer these improved end use characteristics.
I think it is a bit ironic, in fact, that we have to make some of these arguments on the environmental side when we are in Europe because I think it is generally understood that in Europe their chemical use, for example, is roughly twice that in the United States on a per acre basis.
We do, in fact, make these much broader arguments as we attempt to persuade the Europeans and others that this technology should be accepted for a whole number of reasons.
Page 29 PREV PAGE TOP OF DOC Mr. POMEROY. Why do we not segregate corn so we can sell to Europe?
Mr. GALVIN. Well, I think if you looked at it from the standpoint of an individual corn producer, that corn producer today is probably growing both GMO varieties and non-GMO varieties.
So, if you say to that producer, OK, now you have to have two sets of grain bins. You have got to be very careful not have trace amounts of GMO varieties getting contaminated in the non-GMO varieties, and so on.
You would have to have that same sort of system at the local elevator. Then continued segregation all the way through the marketing system. Clearly, that entails cost. Right now, I do not think the market is willing to offer a premium to producers if they segregate.
Certainly, if the market is willing to provide that sort of premium just like it does on organic food, for example, then we think that is the way that the market ought to develop and producers could respond accordingly.
Right now, the way our system is set up and until the market is willing to provide a premium for non-GMO commodities, we just think it would be an unfair burden to ask our farmers to segregate the commodities, especially when it is safe.
Mr. POMEROY. Thank you.
In closing observation, Mr. Chairman, I agree that it is safe. I do not want any additional burden on our farmers, but the fact is that we are not selling any corn because we cannot segregate some of it.
It seems to me that within the corn production industry we ought to develop a way of being able to certify so we can at least sell something.
Mr. EWING. Mr. Pomeroy, I think you are on a very important track here and we will come back. I think it is something that deserves some more attention, your line of questioning. Mr. Lucas.
Page 30 PREV PAGE TOP OF DOC Mr. LUCAS. Thank you, Mr. Chairman.
I agree. The focus we have had here this morning on how the Europeans treat our advances in technology and our producers clearly deserves the attention it is being given.
I think for just a moment, too, that we should also focus on occasion about how we give those Europeans that ammunition to use against us. To that point, I would like to address my question to Mr. Murphy.
I understand that the EPA has proposed a rule that would require FIFRA registration on genetic substances that confer pest resistance to plants that are developed through biotechnology.
If that rule is finalized can your office, the USTR, successfully prevent the Europeans from requiring that food products made from biotechnology crops like that bear labels something along the lines of this food contains plant pesticides? Can you fight that kind of a battle.
Mr. MURPHY. I think our ability to work on this is really related to the extent to which the requirements or the position of the EU is science-based or not science-based. They clearly have an obligation to WTO to have any position or restriction on trade be science-based.
To the extent that it is not, as I mentioned earlier in the case of their labeling, we have been very aggressive in making that point and putting the market down in the WTO. The USDA has been working very closely with the EPA on the final development of this rule to make sure it comes out in a way that is least harmful to our exports.
Certainly, we can hold their feet to the fire, and indeed are, in a number of ongoing cases on the whole issue of it must be science-based.
Mr. LUCAS. I just worry, Mr. Murphy, that if I were a European, I would say, well, your entities say it is a pesticide. Therefore, we must label it as a pesticide. The psychological effect on trying to sell any food product that would contain any of that with that kind of a label would be devastating. That is just, from the perspective of a producer, one of those things I worry about. I think legitimately, Mr. Chairman, we need to scrutinize carefully when our own entities offer up these kinds of rules the effect that it will have, intentionally or unintentionally, upon our ability to move our products and consequently, our producers and our economy.
Page 31 PREV PAGE TOP OF DOC Thank you, Mr. Chairman.
Mr. EWING. Thank you, Mr. Lucas. Mr. Etheridge.
Mr. ETHERIDGE. Thank you, Mr. Chairman.
Let me join with the others in thanking you for holding this hearing today. I think it is important. I want to ask a couple of questions, if I may, and preface that by saying that prior to coming to Congress, I served at the State level.
I was involved in the first study committee that really helped to create the Biotechnology Center in North Carolina where we put the initial funding; one of the first States to really get involved, at the State level, in a joint venture with the private sector in doing biotechnology research.
At that time, I felt very strongly as I think a lot of the folks in our State, that biotechnology was the way to go, not only in agriculture, but in pharmaceutical, among other areas.
Our hope at that point was that it would be a way to increase productivity, provide for food stuffs for the future generations as we move to the 21st century, and allow our small farmers to continue to compete in an ever increasing competitive world. My question, and I know you have touched on small farms, but I want to come back to that because I think that is a critical piece for providing for the quality of life in this country as we market the food products.
We have already seen some of the challenges we face in that area. I hope you will comment on what kind of impact we have had thus far. As we look to the 21st century, assuming that biotechnology continues to move, grow, and be an important part, which I think it will.
How does this impact the small farmer? Are we headed in the direction of megafarming only? It will prove to be the detriment for those small farmers whom we had hoped to help.
Page 32 PREV PAGE TOP OF DOC Mr. SCHUMACHER. Thank you. I think as Mr. Smith has said, this technology is really moving fast. It is moving not only beyond our main green crops and oil seeds, but into the horticultural side.
As the horticulture is one of the few areas in our economy that is doing well and, particularly as more and more farmers get into diversifying, especially in the Southeastern States into horticulture, to supply the demand.
I think you will see quite a lot of take up by small farms. I was in a small farm in Kentucky last year. We were doing some wheat harvesting. They actually let me get on the combine and run the combine, which was a little bit surprising to some of my good grain growers.
It was very successful. Right behind the wheat harvest, and this is only a 300 acre farm. This was in June, July, the soybeans were being planted on this good medium size small farm.
Three 300 acres is fairly small in the grain area. I went over and looked at the bag. It was bioengineered soybeans. So, I asked the farmer, yournow off. The price was not as good as he wanted.
You are coming in right behind with soybeans and you are planting these new varieties, why are you buying this seed if things are a little tight here? He said, because it gives me better yields.
It reduces my chemical load on the farm. It just makes economic sense. So, I think that small farmers are seeing it. They are taking advantage of it. I think they will take more advantage of it as it expands into other crops.
Mr. ETHERIDGE. Let me follow that with something Congressman Pomeroy touched on earlier with this whole issue of marketing. I do not sense in the United States, and I remember when I went out to the first plot that we did in North Carolina.
Page 33 PREV PAGE TOP OF DOC There was a lot of nervousness in the air. They wanted to put regulation in at that point about the fallout in the surrounding area. Of course, I happened to Chair the committee and thought that it was not time to put legislation on the books. That has proven to be true that we did not need it.
I do not sense, in this country, the kinds of concern for the corn, the soybeans, and the other food products that we have that we are facing in Europe and in other places.
My question is somewhat on what he was talking about. We have overcome it in this country because people accept the safety of our foods.
My question is, why cannot we change our strategy in such a way to let that be a marketing tool of advertising in other parts of the world who badly need food, and use the examples that we have put in place in the United States as a springboard in other countries?
Mr. SCHUMACHER. Mr. Etheridge, for example, in North Carolina in your State, your leadership has really been terrific in having coming a node of extraordinary research on biotechnology.
A lot of companies are settling into that research triangle that you setup and took leadership on. I think it was extraordinary. I am going to come back to answer you question to what happened in my opening in my oral testimony when Normal Borlog developed those new varieties.
They were taken up in extraordinary rapidity in many developing countries by very many small farmers. Here we are and we are focused quite a bit on the EU, but if we look more broadly in other countries and the success which is being taken up quite rapidly, and then look at our international organizations.
The Food and Agricultural Organization, the Codex Alimentarius have done a number of safety evaluations on these; the World Health Organization and the OECD. They have all looked at these because they are concerned.
Page 34 PREV PAGE TOP OF DOC Jacque DeOff, the outstanding leader of the food and agriculture is going to be visiting the United States. I hope to take him to the research triangle when he visits later on this month to show exactly what is going on.
We saw that, in terms of the developing countries, as I mentioned earlier, that we can find another Nobel Peace Prize. I think we are getting a little distracted with all of the work going on in Europe because they are hurting us.
I think the in the longer term our markets are in the longterm in Asia, South America, and in other countries. That is why the international organizations, who have said these are safe, and they need these products and the work going on in North Carolina.
We have a marketing strategy that is going to be taken up. Once things get a little bit more into the international system and are proven for helping small farmers around the world, you are going to see enormous take up on those.
Mr. ETHERIDGE. Thank you. Thank you, Mr. Chairman.
Mr. EWING. Mr. Simpson.
Mr. SIMPSON. Thank you, Mr. Chairman.
Mr. Murphy, I was following up on the line of questioning that has been asked. It seems like we have two things that we have going on in getting into foreign markets, especially in the European community.
One of them is the concern that their resistance is due to cultural problems that Mr. Pomeroy mentioned. The other is that it is truly an attempt to restrict our entry into their market.
Which one do you think is the predominant view here? Do you think it is a cultural problem with them? When you talk about genetically altered, genetically engineered products, it conjures up all sorts of weird things in your mind. Do you think that is a real problem in their culture?
Page 35 PREV PAGE TOP OF DOC Mr. MURPHY. I think there is no question, but what some groups in Europe have found it very convenient for protectionist reasons to jump on the bandwagon here in opposing the technology.
I think fundamentally, Mr. Pomeroy's suggestion is probably correct. It is at heart more of a cultural issue. They have, as the Under Secretary mentioned earlier, been through the very negative experience with BSE, which has really undermined their faith, first in science, and second in their regulatory authorities.
They do not, as the Under Secretary said, have this institutional benefit of an independent regulatory body that people have faith in. So, there are a number of historical reasons here that they are more negative on this technology.
Our companies, frankly, were surprised because it was so readily accepted here, they did not anticipate that they would run into this opposition in Europe. I think culturally there is just inherently a more conservative attitude there.
I joke with some of my European friends saying that the definition of an American is a risk-taking European. We immigrated here. We had faith in the future. Those who stayed behind had a little less faith in the future. They were more risk-adverse.
You see this in endless conversations with Europeans that often comes down to them saying, you cannot tell me or prove to me that somewhere longterm we will not find something wrong with this technology.
Of course, you cannot. You cannot prove the negative. Our response, of course, is you have to go with the best science available and nobody is finding, in the current research, any problems with this technology.
It is completely safe. There are 270 or 280 million Americans eating this stuff every day. We are all walking around very healthy. So, you Europeans have a laboratory here.
Page 36 PREV PAGE TOP OF DOC But they are culturally more risk-adverse to trying new things. I think Mr. Pomeroy is correct. There is a cultural issue here; not to say there have not been some people who have been quite happy to see U.S. corn kept out last summer. Some people benefitted from that; no question.
Mr. SIMPSON. Mr. Galvin, you mentioned that we bring over many different people from different countries and talk to them about biotechnology, and try to educate them to what is going on and stuff.
Mr. GALVIN. Right.
Mr. SIMPSON. Do we do anything directly with the consumers trying to address the people of the European community? Ultimately, that is who you are going to have to get to buy into this.
Are companies or the Government doing anything to try to change the perception in the European community about genetically altered food?
Mr. GALVIN. Yes. A number of those that we have spoken to are representatives of consumer organizations. So, we have spent a great deal of time speaking to them directly. I believe that companies have done a lot of that as well.
I should point out that the Deputy Secretary, Mr. Rominger, is going to Brussels for a large biotechnology conference on March 18, at which there will be quite an audience of consumer, and environmental organizations, and that sort of thing.
Mr. SCHUMACHER. If I may, there is a tomato variety that was produced here and sold in canned form. A lot of education was done in the can form. That has gone very, very well in the European market.
The supermarkets and the American processors have worked very closely together. That was a very smooth entry. That is selling extremely well in the British super markets.
Page 37 PREV PAGE TOP OF DOC It was handled very well. A lot of preparation was done. Consumers were educated. It is moving very sharply off the shelves in the United Kingdom. There are lessons here as well.
Mr. SIMPSON. One followup, Mr. Murphy. Mostly we talked about the European community today and the problems that we have there. Do we have any problems with, as an example, Canada?
I know that there is a lot of genetic altering going on with potato varieties. Do we have any problem with Canada, currently?
Mr. MURPHY. We really have not experienced any. In fact, on the contrary. USDA and APHIS has worked out last year a Memorandum of Understanding with the Canadian regulatory authorities.
So, there is beginning to build some sharing of data, and analytical methods, exchange of information and analysis so we do not duplicate the review of products.
I think our feeling here is that we have certainly had no problem with approvals in Canada. In the discussions between regulators, there and here, has been very positive. We have the MOU.
In fact, we are using that as a model to talk to the EU to see if we can perhaps work something similar out with the EU that we have worked out with the Canadians.
Mr. SAMPSON. Thank you, Mr. Chairman.
Mr. EWING. If you gentlemen have time, I am going to go one more round of questioning.
Mr. MURPHY. I think we want to establish here that our trade rules are set down in our trade agreements. There are certain rules that each country is supposed to follow. The decisions are not supposed to be made for other reasons.
There are a set of rules that we need to follow. The EU, particularly, and I think what you are seeing from this subcommittee is the frustration with agricultural markets right now, and knowing that the EU does not take a lot of our corn anyway.
Page 38 PREV PAGE TOP OF DOC The fact that we have not been able to sell it there because of the process in getting these biotechnology improvements, our grains, approved over there. Does it not appear that they are able to use the rules to delay, if not to prevent us? I mean, it is a long process. We are looking at a number of years before we can sell our corn over there, if we continue through the current process.
Mr. MURPHY. The frustration, Mr. Chairman, that you indicated the subcommittee has, we have it as well. It has been that the EU, to our knowledge, has never actually turned down or rejected a biotechnology product.
They have taken far too long to approve them. It has been a nontransparent process, overly politicized. They have never actually turned one down. Were they to do so, for a nonscience-based reason, we would, of course, pursue that very aggressively under the rules in the WTO.
It has never quite come to that. They eventually do it. Of the four varieties which are currently pending in the approval process, we are fairly confident those will eventually be approved as well.
So, push has never come to shove here. They have never really taken the strong, negative rejection of a product that has given us a hook to say, okay, that is clearly illegal under the rules and we will pursue that. So, that has just not happened.
Mr. EWING. Well, that would be my reaction in visiting some of those countries and met their people. It is just a delay tactic. They run it up the flag pole and they bring it back down. The approve it at the country level. They approve it at all different levels and it just takes a lot of time.
Our technology is changing so fast in this country, they will forever have us blocked out, unless we have some way to guarantee that what we are sending them only qualifies under those grains that have been approved.
Page 39 PREV PAGE TOP OF DOC I mean, there are a lot of new biotechnology seeds coming on the market all of the time. We will be forever going through that process.
Mr. Schumacher, do you not think we need to have a plan that can be implemented for the European community or any other of our trading partners?
Mr. SCHUMACHER. Yes. Tim.
Mr. GALVIN. If I might, Mr. Chairman. I think your point goes back to the issue that Jim raised in his testimony when he talked about this pilot project that has been established under the Transatlantic Economic Partnership.
The idea under that pilot project is when these companies come in with a new GMO variety, they would essentially submit it to U.S. regulatory officials, and to EU officials at the same time, so that these applications could move along in tandem, as opposed to the current situation where we get approval first here in the United States, and then it gets planted in the United States, and then they go seek approval in the EU
The consequence is this an inevitable time lag that results in us being shut out of the market. So if, under this pilot project, we can get these companies to synchronize their applications in both the United States and the EU, then that should help to improve the situation.
Mr. EWING. Where is that pilot being operated?
Mr. GALVIN. Again, we just had the first meeting with the EU on February 11.
Mr. MURPHY. We did have a very useful discussion there. USDA, APHIS tabled a proposal. We had extensive discussion of that. The Commission committed to revise the proposal, based on that discussion.
It is their hope to take this proposal to the member states that are meeting on March 15 to get the approval within the EU.
Page 40 PREV PAGE TOP OF DOC Could I also add, Mr. Chairman on the corn point that you raised? Before coming this morning I, in fact, was responding to a phone call from the Commission on the issue of the corn quotas into Spain.
We, last year, worked with them and this year we will work with them to try to overcome their concerns about the unapproved varieties. The unapproved varieties are, of course, new varieties, and therefore are planted in fairly small acreage.
Last year, we were able to get over this hurdle by showing them the contracts that the growers signed when they purchased the seeds. We are doing the same thing this year. The companies are providing us copies for those contracts.
We are showing them to the Commission, trying to raise the Commission's comfort level to the point where, when they open the quotas, they will accept U.S. product. So, we are working with the Commission trying to address their concerns here.
Mr. EWING. Are you working with them at all to set time limits on the approval process?
Mr. MURPHY. That is an issue that we are now looking at as to whether we can do something for disciplines in the new negotiations in the WTO.
We are exploring very actively with our industry and with other countries the question of whether we can negotiate additional disciplines in the next round of agriculture negotiations on approval procedures, on labeling requirements for biotechnology.
Mr. EWING. Did any of you see the story recently where I believe the French are trying to genetically modify their milk cows so that they can produce milk so that people who are allergic to milk can consume without causing any problems?
Mr. SCHUMACHER. I have not seen that.
Mr. EWING. There was a story out on that. The French seem to be one of our biggest objectors. I hope they all like that milk when they get it produced over there. Mr. Condit.
Page 41 PREV PAGE TOP OF DOC Mr. CONDIT. Mr. Under Secretary, what international rule exists for approval of GM products? Is there a rule that we all abide by?
Mr. SCHUMACHER. Well, when we first start, we have our regulatory system that, as Mr. Murphy has just pointed out and Tim has amplified.
Michael could assist us on this. At the Codex Alimentarius in Rome, which, for an agricultural organization, is the standard setting, international standard setting, by the which has looked at a number of these products and found them completely safe.
So, that sort of international approval or setting in which these are reviewed very, very carefully. By and large, these have been moving through that system pretty well.
Mr. CONDIT. Is the EU accepting that standard and that rule?
Mr. SCHUMACHER. They have had views that differ from ours at that rule, but we have managed to overcome their objections during those Codex Alimentarius meetings.
Mr. CONDIT. How did you do that; through the WTO?
Mr. SCHUMACHER. Votes.
Mr. CONDIT. Let me, if I may, just go back quickly.
I just want to make sure I understood this correctly. I asked you earlier if there were any countries who were opposed to biotechnology products. No one responded. I just want to make sure. The Third World countries do not have a problem with this.
Mr. GALVIN. If I might, Mr. Condit, no, that is not the case, as we saw during all of the recent negotiations on the biosafety protocol. That is not to say that these other countries are flat out opposed to the technology.
At least in this biosafety protocol, they seem to be supporting this position that before we could export any GMO commodities to these countries, that we had to notify them ahead of time, and get their prior consent, and that sort of thing.
Page 42 PREV PAGE TOP OF DOC So, in that respect, they were taking a position that what would be harmful to the technology and to our exports?
Mr. CONDIT. Do you think maybe, just to put it plainly, are they waiting to see what happens between us and the EU? Could that be some of their hesitation?
Mr. GALVIN. I think if you look at how the votes were aligning in the biosafety protocol negotiations, they were with the EU on their position.
So, they are already looking to the EU, I think, unfortunately in this case for leadership. That caused some problems. As you know, our review did prevail and no protocol was agreed to recently in Columbia.
Mr. SCHUMACHER. Even though we are not a member of the Biosafety Biodiversity Treaty. So, I really appreciate, and I want it maybe on the record, Mr. Condit, how much we appreciate the work of the State Department and working with our teams to work with the Miami Group so that we are in that position at the moment. They did a fine job.
Mr. CONDIT. Thank you very much.
Mr. EWING. Mr. Smith.
Mr. SMITH. Thank you, Mr. Chairman.
When we passed our research bill last year, we wrote in some provisions in section 16.68 for the biotechnology risk assessment. I hope we put the language in broadly enough that we can look at research that maybe expands beyond what we have been talking about this morning in this hearing.
From the consequences in evaluation of the so-called terminator gene that some companies are considering modifying their particular plants so that the product, production, or seed from that particular plant can only be consumed and cannot be replanted.
The consequences of that and biotechnology, not only on our markets, as we try to expand our markets, but on producers and farmers. The manipulation of genes so that only select herbicides can be used to control, such as the Round-up Ready soybeans, which is open now.
Page 43 PREV PAGE TOP OF DOC Still, the manipulation of those genes that can in itself be a way, a form of monopoly. So, I would hope, Gus, that the Department of Agriculture would consider some of the expanded considerations of risk management, in terms of the allowances made specifically under that paragraph in my mind to deal with a broader range of risk as far as the bio manipulation.
Mr. SCHUMACHER. This technology protection is a very important issue. Dr. Parry is one of the real leaders on this, but we will certainly pass that on to the Secretary and to Miley Gonzales of your keen interest in this.
Mr. SMITH. I am told that the language was put in the 1990 farm bill. We talked about it. We dealt with it on our research language last year; tremendous consequences to farmers; the traditional way the farmers produce.
Maybe, Mr. Chairman, it is simply a case of making sure that enough competition is there in terms of the protectionism that can be given to the developers of particular biotechnology changes for those crops.
It is going to affect farmers in the future. We need to look at that. Hopefully, maybe it will be a whole separate hearing. At least, in our research effort, I hope we are considering it.
Mr. SCHUMACHER. We hear you loud and clear.
Mr. EWING. Mr. Pomeroy.
Mr. POMEROY. I want to pursue my line of thinking earlier. I thank the chairman for this second go at this panel. I just think we need to do some thinking on how we approach this strategically. The trade laws that we have got can produce market access, but they cannot produce market acceptance.
What the biotechnological industries are achieving in this country, are proceeding faster on the production side than they are in terms of acceptance by the consuming public, especially in the international markets, Europe in particular, on the consuming side.
Page 44 PREV PAGE TOP OF DOC We have got to have them matched up. I think it was Mr. Simpson that was talking about the need to really do more of the Spain work in terms of market acceptance, not just trying to bludgeon our way in through the trade laws.
For example, In the U.K. right now you have a full blown political controversy being exploited by one party against the other party for determination about the safety of GMO crops.
Let us say that the decision stands and market access allowed, the environment for actually selling that product is going to be damaged for some good while in light of the controversy, very high profile controversy, now raging over there on GMO crops.
This is particular relevant in terms of where we are relative to labeling in international trade negotiations. I understand the United States in a minority of like two, relative to opposition to GMO labeling and we are going to lose that one.
So, as you have this controversy and then the label, you could just as well be slapping a skull and cross bones, at least for the near term on this product, in terms of its appeal to the consumer as a food item. What are your thoughts on that? Mr. Murphy.
Mr. MURPHY. Well, I think the issue of how we deal with this, particular the recent outbreak of the U.K. of the very negative articles, we in fact were in communication, through our Embassy, with U.K. officials as to whether in fact it would be useful for us to take a higher profile, either us, the Government, or us, our industry, of publicly responding to those articles which were replete with misinformation and misleading statements.
The response we got was probably not. We should probably not take a higher profile. The problem here is who has credibility in this debate. The U.S. Government and some of our large companies are seen as the bad folks.
As you referred earlier, trying to force a technology on them that they do not want. So, it bears some more thinking on our part as to how you can get that message across from credible sources.
Page 45 PREV PAGE TOP OF DOC I spent a couple of hours yesterday with the Agricultural Biotechnology Forum, which is a group of U.S. companies involved in this sector, exploring with them what sort of different posture we could take precisely on the points you have made, which is we are a small minority and our stance on labeling.
As I mentioned earlier, we have put down the marker in the Technical Barriers to Trade Committee in the WTO. If push came to shove, we could probably win that panel. I think there is little doubt in our minds that we would.
Given that we are a such small minority on the point, given that there is an overwhelming request from the European public, at least, for labeling and information, I think we need to think carefully about what posture we want to take here.
We spent a couple of hours yesterday brainstorming with the U.S. industry. They are reflecting further on this. So, we are looking for some actions we can take to address the situation on the ground.
Mr. POMEROY. I just think it is imperative we go to a market-based strategy to ultimately promoting the wonderful product that we are producing using the breaking technologies.
I do not say that as an enemy of the technologies at all. I am just saying, what we have got here, I do not think is going to be working. Relative to Japan, you have indicated optimism.
I attended a negotiating session between Secretary Glickman and their agriculture minister, relative to the upcoming labeling of GMOs in that market. Now, at a time when the trade deficit with Japan is spiking, one success story we have had relative to their market involves some agriculture exports.
This subcommittee and, in fact, all of Congress would I think react extremely negatively if Japan would close down their markets through an inappropriate labeling initiative.
Page 46 PREV PAGE TOP OF DOC I understand, on the other hand, that they have some significant domestic political issues that is leading the coalition to want to make a play for rural support and therefore, might lead to a very aggressive labeling initiative. Do you have a read on where we are at today in that one?
Mr. MURPHY. Well, the latest conversations we have had with the Japanese on this, which I think was about 2 or 3 weeks ago USDA was in Tokyo, that we were getting indications that they were probably going to head in the direction of not having a required labeling, but moving more in the direction of voluntary, which would be more acceptable to us.
Now, the shouting is not over and they have not made a final decision. At least, the indications we were getting 2 or 3 weeks ago were more positive from our perspective.
Mr. POMEROY. I thought the minister to minister level, Secretary Glickman, did us proud. He was very, very effective, stern, and yet culturally appropriate in terms of advancing the issue. He is really doing a nice job.
So, that concludes my questions. Thank you, Mr. Chairman.
Mr. EWING. Thank you. Mr. Moran.
Mr. MORAN. Mr. Chairman, thank you.
Mr. Schumacher for being with us. I guess my concerns in reading your testimony, you talk about the European Community, as an example, the delays in the approval process, and the labeling requirements. Then we talk about our actions.
Your testimony is that the United States has raised concerns. That we have questioned the scientific basis. Continue to encourage. Use every opportunity to educate.
What can we do, besides this kind of continuing dialog in words that sound to me like we are expressing our concern, but yet fail to see any significant improvement in the circumstances?
Page 47 PREV PAGE TOP OF DOC What would motivate the European Community to respond differently? I am glad we are talking to them, but we do a lot of talk. My question is what is out there that might make a difference? What are we doing to accomplish that?
Mr. SCHUMACHER. Mr. Murphy is my alter ego. When he goes to Europe, I must say they do take notice. So, I want to ask Jim. Jim has been a pit bull on this, Mr. Moran. He does get in through the immigration, but sometimes I wonder what he is going to get out? So, maybe I will ask Jim to address that issue.
Mr. MURPHY. I sometimes, Mr. Under Secretary, use those kinds of words when I do not have a solution to the problem either. That I am educating, listening, expressing concern. I hope there is something more to it than that. Thank you.
Mr. SCHUMACHER. There is a very aggressive view and I will not ask Jim who has been leading the charge on this in Europe.
Mr. MURPHY. We are approaching this in a two prong fashion in the sense that we have made clear in the WTO informal submissions there that their labeling law, for example, is not consistent with their WTO obligations.
Were they to restrict our imports, based on that law, we are certainly in a position and have been very aggressive with them recently.
As you know, we got a couple of rather touchy and significant cases we have pursued and won in the WTO. We would not be bashful about pursuing another formal dispute settlement on labeling if it came to that.
Frankly, we have not because our industry has not pushed us to do that. They were quite happy for us to put down the marker, but they are in a posture of seeing how the EU fills in the details of that labeling regulation. For example, they have not said what the deminimous level will be for labeling, GMO content.
They have not specified what the testing procedures will be, nor have they specified what products would be exempt. Depending on how they fill in those details, the impact on us will be more or less.
Page 48 PREV PAGE TOP OF DOC So, we have not pursued this because we are giving them a chance to try to do it correctly. They are struggling. We understand this month, they will submit something to the Council on the deminimous level.
So, they are trying to come to grips with this. The other side of this, which several members have pointed out is the question of whether it is in our interest to be overly aggressive in terms of the market.
The Europeans have a perception that it is the big, bad U.S. Government and some big bad U.S. multinationals trying to force this technology down their unwilling throats. The more aggressive and higher profile we have become, the more we reinforce image.
So, we have been learning to work carefully and somewhat quietly behind the scenes with companies in Europe. Our two industries, the EU and United States, are frequently in contact. They have developed common recommendations on what should be done.
They are funding common educational programs, public information programs, et cetera. So, there is a lot going on kind of quietly behind the scenes to try to address the problem of the lack of public acceptance to the technology. At the same time, we have a fairly aggressive posture in the WTO, should things go off-track.
Mr. MORAN. So, your testimony is at this time, we have had the appropriate response in raising the concern, educating, but if that results in a bad result, then we are prepared to pursue remedies under WTO.
Mr. MURPHY. That is correct. They have never gone to the point of actually rejecting a biotechnology product. They have taken too long with it. It has been nontransparent. It has been overly politicized.
They have never actually rejected a product for a nonscience-based reason, which would be the trigger point for us pursuing our rights in the WTO.
Mr. MORAN. Does that assume right motives, good motives on behalf of our trading partners? The way we operate, I guess, we are assuming that they want to do the right thing, the fair thing as compared to a protectionist approach?
Page 49 PREV PAGE TOP OF DOC Mr. MURPHY. I think we assume and see a lot of evidence of mixed motives here. Some people are quite positive on the technology. They recognize they need it to be competitive in Europe.
We were visited by farmers' organizations who say they understand the importance of this. They want it. It is the problem with the public acceptance. They assume that is going to blow over in a couple of years and that they will have access to the technology.
Mr. MORAN. If the rejection occurred that would trigger the use of the WTO, how long of a process it would take before we would see a result?
Mr. MURPHY. Well, it takes about 12 to 14 months to pursue a case from start to finish with the panel reaching a conclusion.
Mr. SCHUMACHER. That is much shorter than from before.
Mr. MORAN. Which is shorter than before?
Mr. SCHUMACHER. Much, much shorter. That is why I think we won the banana case. We won the beef case. If we have problems, we will win the biotechnology case.
Mr. MORAN. Mr. Under Secretary and Mr. Murphy, thank you very much. Thank you, Mr. Chairman.
Mr. EWING. Mr. Etheridge.
Mr. ETHERIDGE. Thank you, Mr. Chairman.
Mr. Under Secretary, I want to go back to something I said earlier as it relates to biotechnology products. There is no question. I am a strong supporter and proponent of it, but I think there are some questions that I would like to pose to you.
One of them is to what extent is the reality, especially in these times of oversupply? I think the oversupply in a lot of our commodities; we have oversupply in this country. They are the cheapest they have been in a long time.
Page 50 PREV PAGE TOP OF DOC These are creating with the worldwide supply in most of the countries that we deal with who are our trading partners, are these creating bank pressures to our ability to get the GEO-engineered products in at a time when they have an oversupply in their country too.
Mr. SCHUMACHER. If I may answer that, Mr. Etheridge. These issues go back in Europe 3, 4, or 5 years, when we had big demand in 1996 and 1997. We really have not had problems in Mexico and Canada.
Mexico is going to be up to $6.7 billion this year in exports. Latin America is pretty steady. Our problem is demand in Asia and getting demand back up to get these supplies moving.
As I said earlier, we were going to have major problems in the majority of our markets. The issue right now is as we have been testifying and being questioned this morning on when are the Europeans going to get their regulatory systems in place, get their processors in place, and give confidence to their consumers?
They have the outstanding people like Dr. Parry, Dr. Schlechtman, and our folks at FDA and EPA that have continually reassured our consumers that our systems are scientifically sound, and these are safe science projects that come with a benefit, and will benefit further consumers as further products develop.
Mr. ETHERIDGE. I think you have pretty well answered my second question which was why? The European Union really tends to be that big flag that a lot of others are watching to see which way the wind is blowing before they make some motions, simply because they have had impact around the world for a long time.
My question was going to be why is it that the American consumer, and you have partially answered that just now, have been able and readily accepted this really because we do have a safe food supply and that we can show we have the research base that proves, vis-a-vis, the European Union who really do not want yet to accept it, because they have not set up protocols to do it. I assume that is where you are coming from.
Page 51 PREV PAGE TOP OF DOC Mr. SCHUMACHER. Right.
Mr. ETHERIDGE. Thank you, Mr. Chairman.
Mr. EWING. I want to thank this panel for a very interesting discussion. I guess I would be a little remiss if I did not mention that when we win those WTO cases, if they do not change their policy, it is up to us to act in this country or nothing happens.
We can win the banana case. We can win the beef hormone case, but nothing will change in our trade unless they agree to go along or we take action. I guess today is action day.
I hope the administration knows that inaction will be perceived as being soft. I think we will damage your effectiveness, Mr. Murphy, and the Department's effectiveness in pursuing these issues with our trading partners. At some point, we have to take a stand. I think a number of us here in Congress have sent that word down to the Trade Office and to the administration. I certainly would send that message back.
Today is the day to let them know we mean business. Thank you all for coming.
Mr. SCHUMACHER. Thank you for having us, Chairman Ewing.
Mr. EWING. Mr. Gary Hall, president of the Kansas Farm Bureau. He is appearing on behalf of the American Farm Bureau Federation. Mr. Jon Jay Hardwick, a cotton producer from Newellton, LA, on behalf of the National Cotton Council.
Mr. Roger Pine, president of the National Corn Growers Association, and Mr. Mike Yost, president of the American Soybean Association.
Welcome gentlemen. We will start with you, Mr. Hall.
STATEMENT OF GARY HALL, PRESIDENT, KANSAS FARM BUREAU, ON BEHALF OF THE AMERICAN FARM BUREAU FEDERATION
Page 52 PREV PAGE TOP OF DOC Mr. HALL. Thank you, Mr. Chairman.
My name is Gary Hall. I am president of Kansas Farm Bureau and a member of the Board of Directors of the American Farm Bureau Federation.
Mr. Chairman, we appreciate your leadership in holding these hearings on a very important topic. I have thoroughly enjoyed the previous panel in their responses to questions.
Farmers have rarely adopted technology which has stimulated U.S. economic growth through the centuries, boosting our standard of living to one of the world's highest.
Biotechnology is providing the new tools for our growth and development. The ultimate beneficiaries of technological innovation, however, has always been the consumers; consumers in the United States and consumers around the world.
Today, Americans enjoy abundant and nutritious food, at a cost of just 10.7 percent of our disposable income, leaving the lion's share for discretionary purchases that increase our standard of living and fuel economic growth.
Biotechnology provides economic potential in the race between population and the food supply. Recently, Mr. Chairman, at a conference in Nevada, the respected ageconomist, Dr. Luther Tweeton from Ohio State, made this comment. Four decades ago, the increase in yields far outpaced the increase in population. He sees that trend changing, however, wherein the increase in population could very well outstrip the increase in yields.
Biotechnology indeed can greatly reduce the competition for limited natural resources in our country and around the world. Biotechnology has the additional potential for reducing pressures on fragile lands.
Moreover, it has potential to cut agricultural chemical use and surface and ground water pollution. By transforming today's commodities into food and fiber products with new attributes and purposes, new capacities to promote health, and overcome human deficiencies, and enhance taste all at lower cost, U.S. producers can expand market share and increase returned.
Page 53 PREV PAGE TOP OF DOC They must have timely access to these new products. Let me discuss one regulatory item, Mr. Chairman, that I think is very important. It goes to regulatory oversight. Back in the 1980's, a system was reviewed in detail by the country's top scientists and the public before it was formally approved.
The question in the 1980's concerned the need for a new super agency to monitor biotechnology use, especially for medicines and the answer was no. Existing agencies were given new and formal tasks, including the USDA, EPA, and the FDA. My conclusion is that no other country requires such comprehensive tests. The proof is in the absence of problems today.
The current system is fully adequate, now and for the future. It is supporting biotechnology advances. Those circumstances have appeared to suggest either a new regulatory approach or new regulatory bodies are needed.
The wisdom of the 1986 rejection of a super agency to regulate biotechnology has been reaffirmed through the 1990's. The evidence is compelling. Not only are there effective rules and watchdog agencies in the United States, but governments around the world evaluate and test new biotechnology products.
Sanitary and phytosanitary rules adopted by the WTO must be based on sound science and thorough and continual testing. Mr. Chairman, we need to enforce existing trade commitments and mechanisms as agreed to by the members of the WTO.
Second, we need to make sure that existing regulations are based on scientific principle, rather than offer technical trade barriers to the European Union or other countries.
Producers also need to know that world markets are open to these products before they are planted. We cannot afford to be left holding the bag if seed producers have not obtained the necessary clearances for GMO products in world markets. While we believe our system is adequate and effective safeguards to the public and the environment, many of our trading partners are disrupting the free-flow of products of biotechnology by refusing to allow them to be imported.
Page 54 PREV PAGE TOP OF DOC Many consumer concerns and the views to allow imports of biotechnology products are an outgrowth of inadequate understanding or an unwillingness to comply with the scientific findings of the regulatory systems within these countries.
The next round of the WTO negotiations on agriculture begins in November. Trade in products of biotechnology must be on the agenda and must be a priority issue for our negotiators.
Existing rules must be applied and complied with in order to protect our ability to trade these products. Trade and movement of products of biotechnology across international borders must be treated the same as any other agricultural product.
Accordingly, we are alarmed, Mr. Chairman, at the support for a growing number of international treaties that proclaim to protect the environment and society. Treaties such as the Kyoto Treaty on Climate Change, the Biosafety Protocol, and the Convention on Biological Diversity propose strict regulatory measures that are not based on credible risk analysis. We are concerned about this. It is very alarming that the EU environmental ministers have proposed that these treaties take precedence over the WTO in trade disputes.
There is no way that we can maintain a sound economy in any industry, unless the rules of trade are clear and are allowed to function freely. In the face of this growing pressure, we are also concerned about an agreement that was assigned by this administration, the Transatlantic Economic Partnership with the EU, for the purpose of incorporating the environment and labor into the WTO talks, with the intention of giving full weight to the environmental considerations throughout the WTO agreement.
As such, the TEP agreement with the EU allows the environmental ministers to meet on an ongoing basis with the EPA Administrator in order to have input into the inclusion of the environment in the next round of WTO talks.
The Farm Bureau is on record opposing this provision. Mr. Chairman, thank you very much for your leadership in holding this hearing. I look forward to answering any questions at the appropriate time.
Page 55 PREV PAGE TOP OF DOC [The prepared statement of Mr. Hall appears at the conclusion of the hearing.]
Mr. EWING. Thank you, Mr. Hall. Mr. Hardwick.
STATEMENT OF JON JAY HARDWICK, COTTON PRODUCER, NEWELLTON, LA; ON BEHALF OF THE NATIONAL COTTON COUNCIL
Mr. HARDWICK. Thank you, Mr. Chairman.
Again, my name is Jay Hardwick. I own and operate a farming operation near Newellton, LA. I appreciate the opportunity to appear before this subcommittee to discuss the cotton industry's experience with and the outlook for biotechnology or genetically enhanced products.
Since you recently visited Mr. Chambliss and Mr. Hayes' Districts, I know you are keenly aware of this serious economic condition in the cotton belt and in virtually every farm committee.
So, Mr. Chairman, before I address the topic of today's hearing, I could not return home to Louisiana and face my neighbors if I did not ask you and your colleagues to develop a bipartisan package of legislation to assist farmers, ranchers, and related businesses to survive conditions beyond their control, and which were not contemplated during the 1996 farm bill when it was crafted.
I have every confidence that this subcommittee, with its outstanding leadership, can meet these very challenging circumstances before us. Thank you for your efforts last year.
The economic and weather related losses, and the tax provisions of the omnibus spending bill were of tremendous help to producers. Mr. Chairman, today's topic is one of the potentially bright spots in American agriculture.
Page 56 PREV PAGE TOP OF DOC I say potential because there are challenges, including cost and available of technology, management on the farm, and the marketing of the products, which you have heard here this morning.
The cotton industry has readily embraced biotechnology. In fact, over 60 percent of the cotton acres planted in 1999 in the United States will be of genetically enhanced varieties.
The insect and herbicide resistent varieties have the potential to help us control escalating costs and use, if they are reasonably priced and perform effectively. They also allow us to employ more efficient and environmental friendly management techniques which we welcome on the farm.
We also look forward to new varieties which have enhanced fiber characteristics and seed which yield more and better oil and meal products. This technology obviously is limited only by our imagination and our pocketbooks, at the moment.
Our challenge is to choose, manage, and market it wisely. The technology also brings challenges though. There have been performance problems in some areas which need further investigation. The Council's leadership has initiated a series of meetings with registrant and suppliers to ensure there is meaningful dialog, considering the pork performance, pricing, or other buyer-seller issues.
Farmers need reliable information and management techniques about the performance of seed varieties, which carry these new genetics.
We also believe it is important to maintain a business environment which fosters competition and facilitates the entry of new firms with new products to provide farmers with a plentiful array of choices.
We believe it is important to analyze and understand how the emergence and adoption of the new technology can affect various types and size of farm operations and how traditional business relationships between farmer, supplier, processor, and consumer are affected.
Page 57 PREV PAGE TOP OF DOC There are marketing opportunities and challenges as well. I know most people in this room do not think of cotton as a food crop, but cotton seed provides about 17 percent of the value of the farm gate.
We have a robust crushing sector which converts seed oil, meal, and other products. Nearly 50 percent of the annual cotton seed production goes to dairies and feed yards.
So, we also, like our friends in soybean and the corn industry, need to be sure that our customers understand these products. On the fiber side of cotton, our textile and apparel customers are asking for questions about production practices in the field. So, genetically enhanced fibers also have to be carefully introduced to the market, so its performance and its environmental benefits are well-understood.
Mr. Chairman, we are very concerned about the rules regulating international trade in genetically enhanced commodities and their products.
While we understand every country has sovereign rights to regulate its borders, we believe the United States must continue to press for science-based, transparent, and timely procedures for establishing the approval of new products which have the potential to provide not only economic, but environmental benefits worldwide.
To that end, we have joined with the American Soybean Association and the National Corn Growers Association in retaining the services of a highly qualified individual to assist us in developing and promoting plans for harmonizing of rules governing trade and genetically enhanced agricultural commodities and their products.
Our focus is on the 1999 WTO round, but we will not ignore any appropriate forum to discuss the matter. We currently have products in an incredibly complex and time consuming European approval process, which you heard just recently this morning. That experience has certainly reinforced our interest in a harmonized process.
We have also closely followed the recent biosafety protocol negotiations. We understand the interest in developing rules governing the shipment of materials capable of reproducing known as Living Modified Organisms or LMOs.
Page 58 PREV PAGE TOP OF DOC However the negotiations bordered on thelately when a proposal surfaced to require notification of a shipment of denim blue jeans because the fiber content included fiber from Bt cotton seed.
We hope the recess that they enjoy at the moment will be used by all parties to develop more realistic and reasonable proposals to address the concerns about the shipment of LMOs.
While we are focused on the benefits of this existing new product, we should view them as not a complete substitute for conventional materials. The United States must maintain and develop new conventional varieties so that we have a good mix of genetic materials available for producers.
We must also pay careful attention to the threat of resistance. This is our industry's fifth Bt cotton crop. We are enhancing our educational efforts to reinforce the importance of refuge management amongst our producers.
We believe current refuge rules for cotton are adequate because extensive monitoring gives us no other reason to believe otherwise. We believe in new genetic materials like stacked genes will also improve the diversity of our resistent management techniques.
While we are glad to see EPA approve Bt corn for the planting in cotton counties to provide cropping flexibility, we are anxious that the agency not use this as an opportunity to change cotton's refuge requirements; requirements which have proven adequate and enjoy a high compliance rate amongst producers.
Mr. Chairman, again, thank you for the opportunity to present our views. I hope I have contributed to these proceedings and have met your objectives.
I know the Council wants to participate in future discussions about the importance of this technology. I have attach correspondence concerning our views on the biosafety protocol, and a summary of our recommendations concerning a variety of issues too lengthy to cover in my oral statement.
Page 59 PREV PAGE TOP OF DOC Thank you. I will wait for the opportunity to answer questions you may have.
[The prepared statement of Mr Hardwick appears at the conclusion of the hearing.]
Mr. EWING. Thank you. Mr. Pine.
STATEMENT OF ROGER PINE, PRESIDENT, NATIONAL CORN GROWERS ASSOCIATION
Mr. PINE. Thank you, Mr. Chairman and members of the subcommittee. My name is Roger Pine. I am a corn farmer from Lawrence, KS. I appreciate the opportunity to appear before you to discuss the importance of biotechnology to U.S. agriculture.
I serve as president of the National Corn Growers Association which represents more than 30,000 farmers. As many of you know, because of our belief in the benefits of biotechnology, the NCGA has been at the forefront of efforts to secure Federal funding for plant genomic research.
Plant genomics will lay the foundation for breakthrough scientific advances. While world population continues to expand, there is an expectation of higher quality, safer, and more nutritious food.
This means that existing land, water, and nutrients must be used more effectively if the supply of food, feed, and fibers is to meet world needs. Plant genomics and biotechnology will help scientists to use genes from corn and other crops to control important traits, such as nutritional value, stress tolerance, and resistance to pests.
Biotechnology allows us to provide raw materials for industrial uses. Further, it is important for us to begin supplementing our oil use with renewable resources.
Biotechnology will be critical to this effort, as well as providing numerous other far-reaching benefits. To compete in the global market, U.S. farmers must maximum yield and combat serious disease, pests, and weather all without harming the environment.
Page 60 PREV PAGE TOP OF DOC Genomics research and the application of modern biotechnology hold the key to achieving this goal. In trade, last year 11 different versions of biotechnology corn were produced commercially in the United States on approximately 20 million acres.
Those products have all received the necessary approval from the Environmental Protection Agency, the Food and Drug Administration, and USDA's Animal and Plant Health Inspection Service.
Unfortunately, not all of our grain customers accept the U.S. approval process. Last year, we faced intolerable delays in the approval of biotech corn in the EU.
These delays reduced U.S. corn exports to the European Union to less than 3 million bushels during the last marketing year, compared to almost 70 million bushels the previous year.
We support the right of importing countries to regulate biotechnology products, as long as countries or trading blocks conduct timely, predictable, science-based reviews. We are confident that trade will not be disrupted.
When science is subverted by politics, social, and economic concerns, then U.S. farmers do not stand a chance. We expect product registrants, who commercialize seed in the United States, to fully comply with the registration requirements of our trading partners.
However, we recognize that a country-by-country approach becomes unworkable as more nations adopt new standards and approval procedures. We are convinced that an international approval or a mutual recognition is absolutely essential in the future of biotechnology.
Insect Resistant Management or IRM. One of the most widely used and successful products of biotechnology is Bt corn. Bt is a naturally occurring soil insecticide that is toxic to the corn bore family of insects, which cause an estimated $1 billion worth of damage to the U.S. corn crop each year.
Page 61 PREV PAGE TOP OF DOC Incorporating the Bt gene into corn seed controls the corn bore without chemical pesticides and reduces the use of fossil fuel in the process. As a corn grower, I can assure you that I want to protect this environmentally friendly technology for long as possible.
While this new technology has already yielded tremendous benefits for farmers, it has also raised concerns about insects becoming resistent to the Bt gene. With the competitive tactics of the companies, this has resulted in corn grower confusion about how best to prevent insect resistance.
The National Corn Growers Association urged the seed companies to come together and agree on a single, workable insect management, resistant management, or IRM plan. As a result, the companies that produced the majority of Bt corn recently reached an agreement in principle on key points necessary to move forward with a unified IRM plan.
We believe that the plan will address the interest of corn growers, consumers, and regulators. It provides a practical program that is consistent across the industry and was formed by listening to the views of all stakeholders.
These actions will ensure environmental stewardship and Bt product integrity for years to come. In conclusion, I have laid out for you three of corn growers' current priorities in biotechnology: genomic research, the trade implications of biotechnology products, and insect resistant management strategies.
We need to work together to realize the societal and environmental benefits of biotechnology. We need to ensure that the additional value resulting from biotechnology is shared throughout the value chain by industry, farmers, and consumers alike.
I appreciate the opportunity to present the views of the National Corn Growers Association, especially given how important biotechnology is to all of us. I would happy to answer questions when appropriate. Thank you.
[The prepared statement of Mr. Pine appears at the conclusion of the hearing.]
Page 62 PREV PAGE TOP OF DOC Mr. EWING. Thank you. Mr. Yost.
STATEMENT OF MIKE YOST, PRESIDENT, AMERICAN SOYBEAN ASSOCIATION
Mr. YOST. Good afternoon, Mr. Chairman and members of the subcommittee. I am Mike Yost, a soybean and corn farmer from Murdock, MN. I currently serve as president of the American Soybean Association.
ASA represents 32,000 producer members on national issues of importance to all U.S. soybean farmers. We appreciate the opportunity to appear before you on the status and outlook for agricultural biotechnology.
In the 3 years since commercial introduction of genetically modified crops in 1996, agriculture biotechnology has become the defining issue in how the world will feed itself in the next century, and whether this decision will be based on scientific evidence.
At stake in this debate are global markets developed over 50 years by U.S. farmers, whose livelihoods now depend on maintaining access to them. Also, at stake is the viability of the basic rules of international trade, which are guided by science-based determinations.
For U.S. soybean farmers and for producers of other biotechnology crops, the stakes could not be higher. Biotechnology, in brief, will drive the reinvention of the U.S. agriculture production and marketing system in a relatively short period of years.
In the case of soybeans, acreage planted to guard phosphate tolerant varieties could reach 40 million acres; over half the expected production in 1999.
While other varieties with agronomic characteristics are moving towards commercialization, we also saw the introduction in 1998 of the first biotechnology soybean, with a value added trait.
In this case, a higher oil profile. As varieties with quality differences are brought forward in the future, our production, processing, and transportation infrastructure will need to accommodate the need topreserve them.
Page 63 PREV PAGE TOP OF DOC We are already seeing an increase in the sole source grower contracting, not only for planting seed and delivery terms, but for fertilizer and crop protection product purchases.
From the perspective of the individual producer, however, the rival agriculture biotechnology is an unqualified triumph of modern science. Varieties already available are reducing farm input costs and, in some cases, improving yields.
The beauty of the system is that to be accepted by farmers, a biotechnology variety must either reduce production costs or increase crop value by more than its increase in cost over conventional varieties. The only concern other than the save seed issue is whether planting seed for conventional varieties will continue to be available in future years. These benefits are equally clear to producers in other countries.
Farmers in Canada, Argentina, and Australia have accepted biotechnology soybean corn and cotton varieties. In other countries, however, including Europe as well as the developing world, grower enthusiasm has taken a back seat to concerns of consumers and environmentalists.
Following approval in the European Union of the first biotechnology soybean and corn varieties in 1996, we have seen a back lash against efforts to gain approval of additional varieties.
This reaction has been fanned by activist groups who have convinced nervous food manufacturers, retailers, and EU consumers that they should have the right to know whether food products include ingredients from biotechnology crops and a right to choose alternative products that do not.
This activity has lead to a prolonged debate over whether and how to label products containing GMOs or Genetically Modified Organisms, and whether GMO crops could be segregated from traditional varieties.
Page 64 PREV PAGE TOP OF DOC Activist groups are also leading efforts to discredit biotechnology crops entirely and have urged band on imports, as well as moratoriums on further approvals. As these questions have lingered in the EU, similar concerns have been raised in other countries, including Japan. As food manufacturers in the EU and other markets seek sources of non-GMO varieties, major U.S. competitors, such as Brazil, have moved to supply non-GMO soybeans.
They have efforts underway to block introduction of biotechnology soybeans in their next crop. To summarize the remainder of my statement, Mr. Chairman, ASA believes that there are eight areas where action is needed to prevent escalating disruption of the U.S. exports of soybeans and other crops.
First, the EU needs to adopt a much more transparent and efficient process for approving new biotechnology varieties.
Second, the administration needs to engage with the EU in an effort to reach agreement to recognize each other's procedures for approving and commercializing biotechnology crops and products.
Third, the United States must ensure that rules to be written by the Codex Alimentarius Commission governing biotechnology labeling and trade are science-based.
Fourth, rules governing biotechnology trade need to be included in the next WTO round. WTO rules must supersede the rules of any other international treaty or agreement.
Fifth, the EU and other countries must accept that there is no scientific basis for requiring segregation or labeling of biotechnology varieties that have been determined to be substantially equivalent to conventional varieties in terms of safety, nutrition, and composition.
Sixth, biotechnology crops are commodities that are to be used for feed or food, rather than seed production, must continue to be excluded from any biosafety protocol.
Page 65 PREV PAGE TOP OF DOC Seventh, biotechnology and seed companies must seek and obtain clearances for new varieties in both the United States and in major export markets before these varieties are commercialized in the United States.
Eighth, governments, food companies, and retailers, biotechnology, seed companies, scientists, and producers must help inform consumers that biotechnology is a tool that will help us feed a growing world population in a more environmentally friendly manner.
Thank you, Mr. Chairman. I look forward to answering any questions.
[The prepared statement of Mr. Yost appears at the conclusion of the hearing.]
Mr. EWING. As the panel may know, we have two votes pending. So, I am going to recess for probably 10 to 15 minutes. I would like to ask this panel to come back to the table as soon as we come back. Then we will go through the questions.
We will recess for 15 minutes.
Mr. EWING. The subcommittee will come to order.
Unfortunately, I think everybody stepped outside and found out how nice it was. I do not blame them for not coming back. We will continue and go right to the questioning of the second panel.
I want to start with you, Mike. The soybean industry, are most of the seeds that are being planted by the producers now, have they been approved for sale in Europe?
Mr. YOST. All of our Round-up Ready soybeans are one event. So, if one variety of Round-up Ready beans are approved, then they all are. So, in that case, yes.
The soybean has not been approved. They are the two beans that were in production last year. They were produced in a closed system in this country and kept segregated for domestic use.
Page 66 PREV PAGE TOP OF DOC Mr. EWING. What is happening this year?
Mr. YOST. Well, so far, those are the only two varieties that are going to be produced again this year.
There is talk of other varieties coming out. We have been talking to some of the respected biotechnology companies about the developing closed loop systems for those new GMO varieties also.
Mr. EWING. Will you keep the unapproved varieties separate again this year?
Mr. YOST. We are going to strive to do that. We have to do it. Too much is at risk not to.
Mr. EWING. Does the Soybean Association have a plan for continued introduction of new varieties that will be kept separate? What is the thinking at your organization?
Mr. YOST. Well, we have a 10 point plan that we like all companies to meet to guarantee the segregation in their domestic usage of new GMO varieties.
We are also embarking on a discussion with our biotechnology companies about what needs to be done in the future, with emphasis on the fact that new varieties, new GMO varieties are going to be commercialized in this country, that should happen after they get their export clearances.
Mr. EWING. You then would approve of the suggestion made in the pilot program that they be submitted for approval both to the EU and here. I guess maybe any of our trading partners who needed to make that approval at the same time that we do it here?
Mr. YOST. A simultaneous approval process would be most advisable.
Mr. EWING. Mr. Pine, what is going on in the corn industry in this same regard?
Page 67 PREV PAGE TOP OF DOC Mr. PINE. Last year, there were 11 biotechnology opportunities to be sold. Four of those were approved in the EU that were planted last year. However, they still consisted of most of the acreage.
Mr. EWING. Most of the acreage was approved?
Mr. YOST. Yes.
Mr. EWING. There was no any effort to segregate?
Mr. YOST. That is not entirely true.
Mr. EWING. That was not a statement. That was a question.
Mr. YOST. OK. Thank you. We have what we call know before you grow. Our position is that it is important that the seed companies be sure, through their sales force and other ways, to be certain that our growers understand which of these are acceptable and which are not, which need to stay in the domestic market and which can be sold overseas.
Mr. EWING. Do you believe there is a good understanding of that among producers.
Mr. PINE. Well, we are certainly striving in that direction. That is a stronger and stronger emphasis, as far we are concerned, because if they do not, that just adds to the problem.
So, we are making our membership and growers, in general, aware of the importance of keeping those separate or realizing that if they are growing one of those events that is not approved, that it definitely needs to be kept within the domestic market or feed on their own farm.
Mr. EWING. I got the very distinct feeling from dealing with in my own business and with others that it is just kind of, oh well, that really will not matter. Yes, the protection is out there, but I do not know if our producers are really taking it seriously.
Page 68 PREV PAGE TOP OF DOC Mr. PINE. Well, to be perfectly frank to begin with, I would not be surprised if that was the attitude. I think the seriousness of the situation has become more and more significant.
That is why we have put the emphasis on this that we have. We have worked with the seed companies. We felt like they needed to be doing more than what they were. They have agreed to do that. We feel better about that situation than we did to begin with.
Mr. EWING. Is your organization working on any kind of a plan to actually segregate the corn this year in 1999 or in future years unless this problem is corrected with our trading partners?
Mr. PINE. Well, it goes back to what I said awhile ago. We are working through the educational process of our growers to be sure and know which events are acceptable and which are not. So, we have continued to escalate and emphasize that. That is our program to keep it separate.
In addition, of course, what we think is that we need to be working towards a reasonable science-based process for approval that can be accepted. That is our focus.
Mr. EWING. I totally agree that should be our goal and that is what we should be working for. I also have fairly strong feelings that some of our trading partners use this very effectively and mask their real reasons for objecting to the GMO seeds for trade purposes.
I guess I am pleased that the soybean people do not have as big a problem because they do not have as many. Maybe the seed for corn got kind of out in front of the issue before it became an issue.
I think it is certainly something your organization might want to look at; way it could in fact segregate that until the time comes when it will not matter.
Mr. PINE. I would make two comments, sir.
Page 69 PREV PAGE TOP OF DOC First of all, we are concerned about another country being able to restrict new techniques or new products to the availability of our growers. That is a concern that we have got.
Certainly, we want to do everything that we can to make sure that those are available to them. I certainly understand what you are saying. We will look at that. I am sure that if the incentive was there financially, there would certainly be an interest in doing that. At this point, from what I can tell, I have not seen an incentive financially to do that.
Mr. EWING. That is correct. I do not think there is. It is kind of a reverse incentive of how much lower will it go if we do not ship it overseas.
I am going to now go to Mr. Condit. We will be back for more questions.
Mr. CONDIT. Thank you, Mr. Chairman.
First of all, let me apologize to you gentlemen for jumping up and leaving. You know we had a vote. I apologize. In your presentations, I got to hear most of them are very good. I appreciate that very much.
You heard the earlier panel. What would be the impact to your farmers if the EU followed through with sort of the position that we understand that they have right now? Can you ascertain what the impact might be?
Mr. HARDWICK. Well, from the cotton side, we have limited exports to Europe at the moment. Also, cotton is one of the few commodities that I am aware of where the bale can be identified through a permanent bale package. We can track any bale and know its characteristics all the way from the field through the ginning process, warehouse, and to export market. So, we could probably work with that, in terms of exports along the way to identify these GMO products.
Mr. CONDIT. Corn.
Mr. PINE. What was your question again, sir?
Page 70 PREV PAGE TOP OF DOC Mr. CONDIT. What would the impact be to your farmers if the EU was to follow through with their current position?
Mr. PINE. We are concerned about the loss of any market, obviously. When we have a surplus of product, we want to utilize any market that is available to us.
To be perfectly frank, there is another market that we are able to access in the EU that is of some greater importance and that is the corn gluten market.
Because that is a processed product, that has not come under the same rulings. If we lost that market, it would be great jeopardy to the corn growers.
We still are concerned about losing the corn market itself that I alluded to only being able to get 3 million bushels in there last year, as compared to 70 million before that. So, we are concerned about that loss, but not as much as the corn gluten market.
Mr. CONDIT. Mr. Hardwick, if I understood you correctly, does that mean that you can segregate your cotton? Is that what you were saying?
Mr. HARDWICK. We could identify it on a per bale basis.
Mr. CONDIT. You could identify it?
Mr. HARDWICK. Yes, sir.
Mr. CONDIT. So, that should not be an objection from your point of view in the EU?
Mr. HARDWICK. Not mine personally. I would have to confer that with leadership though, but I think we can do that.
Mr. CONDIT. This year, the full committee has talked about crop insurance reform. I want to spring this one on you. Do any of you foresee crop insurance programs for genetically modified crops?
Mr. YOST. We have not talked about that. I presume you are talking about some very high value crop that is going to be coming down the pike. We have not discussed that issue per se.
Page 71 PREV PAGE TOP OF DOC We are concerned about where the producer sorts out in the whole biotechnology game in the future, but we have not talked about crop insurance for these higher value crops that are on the drawing board.
Mr. CONDIT. Anyone else?
Mr. HARDWICK. Our policy supports insurance for all commodities. So, it would be inclusive.
Mr. CONDIT. Who is liable genetically, if genetically modified crops fail or cause other types of disasters, environmental changes, or what have you?
Mr. PINE. I honestly do not know the answer to that.
Mr. Condit. Well, maybe the scientists will give us some idea. Does anyone have a response to that at all?
Mr. CONDIT. OK. Thank you, Mr. Chairman.
Mr. EWING. I thank you gentlemen. We appreciate you being here today.
Mr. EWING. Yes, Mr. Moran. I thought you would be back.
Mr. MORAN. I went back. I would like to point out that this is perhaps the most enlightened hearing I have ever attended. I find it fascinating and just at the top end of value. The only conclusion I can reach is that 50 percent of the panel are Kansan.
Mr. EWING. Do not put that to a vote.
Mr. MORAN. Mr. Chairman, thank you. I appreciate this panel being here.
I would ask each of our witnesses any suggestions that they might have in directing USDA activity in response to the European Community or other countries' use of trade barriers in the way that this issue has developed.
Page 72 PREV PAGE TOP OF DOC Are you satisfied that the USDA is making an appropriate response? They indicated earlier that at this stage, they believe they are doing the right thing and moving gradually trying to educate consumers, as well as government officials.
Would you want or expect, insist upon greater response, a stronger response from USDA and trade representatives from the United States?
Mr. HALL. Mr. Moran, let me start with that. In Kansas and, indeed across the Nation, farmers and ranchers are very, very frustrated about the lack of progress. It is not necessarily because of lack of effort on the part of USDA and Secretary Glickman, but indeed the lack of progress.
This goes beyond an administration. It goes beyond perhaps the resolve of Congress, the resolve of the American people to escalate this discussion to a much higher level and name it for what it really is.
We are in a Cold War right now. It is a Trade Cold War. I realize in a Cold War, just as we experienced in another time, that negotiation and talk is very important. There will be a day when that Cold War is going to turn into action.
I just would hope, on behalf of farmers and ranchers, when that day comes, that we see the resolve of Congress and the American people come forward and say that, as a country, we are not going to sacrifice our infrastructure waiting on others to follow the rules.
We are not going to sacrifice feeding the people of the world waiting on faulty science and faulty barricades getting put up. This issue is of critical importance, not only to agriculture, but I would say to citizens of all the world. The sooner we can get it resolved, with action, the better off all Americans are and I would suggest all consumers would be.
Mr. MORAN. Anyone else?
Mr. PINE. Mr. Moran, I would certainly second what Gary said. I definitely feel that this is a benefit for all mankind. In my mind, as a farmer, I feel charged in being able to feed the world.
Page 73 PREV PAGE TOP OF DOC Without this technology, that is going to be very difficult to do. So, I think that it is vitally important. The frustrating part as a leader of the National Corn Growers is that I am afraid that we are going to lose some of our farmers because of the economics of the time before this gets accomplished.
That is of great concern to me. I am frustrated over that, but it is not because I do not feel like there is an effort being made at USDA. I am just frustrated with the pace that it takes to get these things accomplished.
I think it is vitally important to be able to move on this as quickly as we can on behalf of my fellow farmers who are suffering.
Mr. MORAN. Thank you.
Mr. YOST. I would just like to add to that, Mr. Moan, that we at the American Soybean Association have worked closely with both the USDA and the USTR's Office to push forward on biotechnology around the world.
We are satisfied with the support we have gotten. We are in agreement on most of our points. We continue to need to make it a priority issue. We have to keep the pressure on in all fronts to keep the issue focused when we get into trade negotiations; whether it is unilateral or multilateral.
Mr. MORAN. Thank you, Mr. Chairman.
Mr. EWING. Mr. Goode.
Mr. GOODE. I would like to ask Mr. Hall a followup to a remark that he made. You said we are in virtually a Cold War. Could you maybe give two or three specifics in the Midwest where you feel that you have been jabbed at and you do not get a fair hearing or a fair response?
Mr. HALL. Thank you, sir.
I can give examples. First starting with beef. Kansas is a very large beef producing State; there are major processors in our State. It represents about 60-plus percent of gross revenue of that pie in our State.
Page 74 PREV PAGE TOP OF DOC Of course, we all know the importance of beef production across the Nation. The WTO has ruled. We are still waiting.
No beef is going into the European Union. We are looking at millions of consumers in that country. We have offered a situation where we will label the beef American. We will let the consumers in Europe decide, but we are still not getting the beef moved.
Second, concerning the subject matter of today. We are finding difficulty getting our products into the marketplace. We are seeing situations moving from Europe to the Pacific Rim of trade barriers being imposed relative to wheat products, relative to domestic rice production in the United States, the full gambit of products, even including swine.
It is very difficult for me to visit with my neighbors in my hometown, in my community, and it is especially difficult visiting with farmers across the Nation and say, you know, about 4 percent of our products being imported into our country are coming in with maybe about a 4 percent tariff.
What we are producing and what we are sending out has a 40 percent tariff. How do we describe the fairness of that issue? So, those would be some examples. I think that exemplifies the frustration identified earlier.
I would just underscore that I consider it a Cold War because, as Mr. Pine indicated, this is not about policy issues. We are talking about real people of families that are being impacted, negatively impacted, because of lack of resolve and lack of movement on these issues.
Mr. GOODE. With regard to the Pacific Rim nations and wheat, what is their barrier to U.S. wheat?
Mr. HALL. A tariff quota, as I understand it.
Mr. GOODE. I would like to ask Mr. Yost will biotechnology lead to any seedless soybeans?
Page 75 PREV PAGE TOP OF DOC Mr. YOST. I guess I could not answer that for sure. I have not heard that.
Mr. GOODE. I will ask Mr. Pine with the corn; you have not heard that?
Mr. PINE. No, I have not.
Mr. GOODE. OK. I will yield back the remainder of my time to Mr. Condit, if I may, Mr. Chairman.
Mr. EWING. Thank you, Mr. Goode.
Mr. CONDIT. I want to come back to Mr. Pine on that corn gluten. Can you kind of explain. Is that a genetically modified substance?
Mr. PINE. It is a byproduct from the production of ethanol and that type of thing. It is considered a processed product. There can be genetically enhanced grain in that, but it is still because it is a processed product and it is not a live organism.
Mr. CONDIT. You are being very careful in that answer, I guess, because you stated earlier how important that segment of the market is for you.
Mr. PINE. Yes.
Mr. CONDIT. I got that. The point I wanted to make though was it seems to me, I mean, it is an essential product. They need that; right?
Mr. PINE. Yes.
Mr. CONDIT. They are a little more flexible, a little more understanding about that product than maybe they are of these other commodities. Am I reading correctly or not? I know you want to be kind and you do not want to lose that market. I get that. Do you see what I am trying to get at?
Mr. PINE. Yes.
Mr. CONDIT. It is essential for them to use, and they seem to have a little different attitude than if it is not.
Page 76 PREV PAGE TOP OF DOC Mr. PINE. That certainly could be a possibility.
Mr. CONDIT. Thank you.
Mr. EWING. Well, we are in Washington and that is a good political answer.
Mr. CONDIT. Thank you.
Mr. EWING. I want to thank this panel for being here, for participating, and for contributing to this hearing. You are excused.
Our third panel is Dr. Val Giddings. He is vice-president for Food and Agriculture, Biotechnology Industry Organization. Mr. Ronald Meeusen, Dow AgroSciences, on behalf of the American Crop Protection Association.
Dr. Harry Collins, Delta and Pine Land Company, on behalf of the American Seed Trade Association. Dr. Roger Beachey, president, Donald Danforth Plant Science Center, on behalf of the Council on Agriculture Science and Technology; and Mr. James E. Thornton, vice-president, Agriculture, Demegen Inc.; Scott, MO, on behalf of the Institute of Food Technologists.
Welcome gentlemen. Mr. Meeusen.
STATEMENT OF RONALD MEEUSEN, DOW AGROSCIENCES, ON BEHALF OF THE AMERICAN CROP PROTECTION ASSOCIATION
Mr. MEEUSEN. Mr. Chairman and members of the subcommittee, if it is all right with you, as I listened to the earlier testimony, many of the points I was going to make have already been adequately made.
So, rather than read my entire text, if we could just have it put into the record and I will just try to hit the points that you may still find of interest.
Mr. EWING. That would be very helpful.
Page 77 PREV PAGE TOP OF DOC Mr. MEEUSEN. First, let me thank you on behalf of the American Crop Protection Association for holding this hearing and inviting us to testimony today.
The ACPA represents major manufacturers, formulators, and distributors of crop protection and pest control products, including bioengineered products. Our members produce, sell, and distribute virtually all of the active compounds used in crop protection for the United States to date.
Now, the earlier speakers have done a very good job of laying out the value of this technology as applied to agriculture. I will not try to go through that again. Simply let me say that in the ACPA's view, plant biotechnology does have the potential to over shadow all preceding technological advances in production agriculture combined.
Already having made significant effects on corn, soybeans, cotton, potatoes, and, shortly behind and following, improved varieties of wheat, canola, sugar beets, tomatoes, and on, and on, down the line.
That first generation of products is already, as has been alluded to, being followed by a second generation in which some of these trades, such as insect resistance and disease and herbicide resistances are going to be combined.
There is a third wave we need to focus on of products that are being teed up in the pipeline now which will have characteristics introduced which will allow tailoring of the crops for specific consumers, whether for food, feed, fiber, fuel, or as industrial feed stocks, perhaps even pharmaceutical and plastics.
ACPA is glad to be here testifying today along with the other members of our industry because we view ourselves as partners with growers, processors, and grocers in bringing the benefits of this new technology to our customers.
In fact, we believe this industry has to work in concert all the way down the production and distribution chain if we are to be successful in bringing these benefits to the end consumer.
Page 78 PREV PAGE TOP OF DOC A couple of points I would like to make about the benefits of biotechnology that I do not think have been emphasized yet.
First of all, both large and small row farming operations and growers can benefit equally from biotechnology. In fact, it can be argued, and I think argued very convincingly, that biotechnology is perhaps the first significant technology to be brought to agriculture for which the small farmer stands to benefit and can access the technology as readily and realizes many benefits as the large grower.
Since it comes in the seed, the grower is planting the seed anyway. It is not like products that require other capital investment. The small grower typically has more trouble finding the funding to buy new spray equipment and other pieces of equipment.
That is not so here. It comes with the seed. It is planted with the seed. In fact, this may well be one of the most significant advantages of small farmers to come down the pike in a long, long time.
I do not think that has been brought up previously. So, I would like to highlight that for your consideration. Of course, new varieties of soybeans, canola, and other crops with healthier fat contents have been alluded to; and improved rice varieties and other output traits are being improved.
The second point I would like to highlight for your consideration is that in the nonfoods area, we are rapidly approaching the point at which genetic engineering of crops will make practical use of things like corn starch, soybean oil, and other crop outputs as renewable, industrial feed stocks for the production of things like plastics, as opposed to things like pharmaceutical which is a very exciting opportunity.
One must remember with pharmaceutical, 10 to 15 acres of a crop plant producing interferon can produce the entire world's supply of interferon. It is not likely to make its way to the small farmer in this country on large acreage.
Page 79 PREV PAGE TOP OF DOC Once we get to the point in which engineered starches are amenable to being converted into plastics and polymers, now we are talking about billion pound a year markets, which have the potential to open up, for American growers, millions if not perhaps even tens of millions of acres of production going into new markets at higher costs.
So, in terms of helping the American farmer find new outlets for his and her outputs, this is not a small piece. Now, as other people have alluded to, this brave new world of biotechnology is not without its challenges.
As was discussed this morning, we can expect fierce competition from heavily subsidized ageconomies around the world, such as the European Union, and that has been discussed enough. Food safety concerns continue to be proposed, despite the absence of any demonstrated risk for products which have undergone the arduous science-based approval process.
The ACPA maintains that there are adequate risk assessment processes in place in the United States and largely also in place in major trading countries to ensure the safety of this technology.
The second point I would like to make on regulation is that the cooperation, since the mid to late 1980's of the EPA, FDA, and USDA has really contributed to public acceptance of and confidence in the foods produced by this technology and largely because of the trust issue.
We trust our regulators because, quite frankly, they have done a good job in the past 10 years of putting together a transparent, logical system in pursuing it. As regard to the plant pesticide rule, I am jumping ahead a little bit here.
So, forgive me if this is a bit disjointed. There does exist some difference of opinion within the scientific community and industry as to the scope of this rule. ACPA is trying to bring together all of the parties to negotiate a unified industry academic position on this approach.
Page 80 PREV PAGE TOP OF DOC There is a meeting I was told just a little while ago set up for March 16 of all of the interested parties. So, if you will stay tuned, we will try to get back to you hopefully on that issue.
Meanwhile, we continue to work closely with our partners, all down to chain growers, processors, et cetera, in advancing and protecting the real world applications in U.S. agriculture, with technologies both old and new.
In this respect, ACPA and others have gone to great lengths to educate growers as to how best to use this new technology.
One of the illustrations was mentioned earlier that the Bt corn registrants in the National Corn Growers Association have come together with an agreement on planting, the management of Bt corn planting, to ensure that insect resistance is effectively managed.
As to the impact of these foods on human health and the environment, we believe that the regulatory assessment of the safety of these products should continue down the path the United States has developed.
Namely, with regulatory provisions that are adequate, reasonable, and that the decisions are science-based and not socially driven.
I would echo the earlier calls for the United States to continue its very aggressive and, so far, highly effective role as an advocate of U.S. agriculture on the national and international fronts through our Government agencies and the Congress. We need to guarantee that free and open trade for our agriculture products, regardless of what safe technology are used to develop them. In the meantime, rest assured our biotechnology companies are already working with countries ourselves, bilaterally and as a group, with countries receiving genetically modified products; Japan, Argentina, and various countries in the EU.
These dialogs are going on. We need our Government to be involved and continue to be strongly supportive of these efforts. The other things we would like to highlight today, of course, putting policies in place that encourage strong education efforts to help our public and users continue to understand, accept, and reap the benefits of these technologies are highly, highly desirable.
Page 81 PREV PAGE TOP OF DOC A major part of this would be in educating the public on what the Government's role is in ensuring the safety of these products in its partnership with the scientific and academic communities and industry.
We do see specific potential in USDA's concept of regional pest management offices or virtual centers in that regard. We would also advocate the reestablishment within USDA of the Office of Biotechnology, which was lost to funding cuts in fiscal year 1996.
Along with measures such as R&D tax credits for biotechnology activities and activities to minimize the time needed to commercialize products and reduce the costs of complying with Government standards, both of which by the way, the EPA, the FDA, and the USDA have built flexibility into their systems, and are working continuously to try to streamline those processes.
That will all help both academic researchers and corporations to continue to make even greater progress in bringing the benefits of this technology to American agriculture.
Thank you very much.
[The prepared statement of Mr. Meeusen appears at the conclusion of the hearing.]
Mr. EWING. Thank you, Mr. Meeusen. Mr. Giddings.
STATEMENT OF L. VAL GIDDINGS, VICE-PRESIDENT, FOOD AND AGRICULTURE, BIOTECHNOLOGY INDUSTRY ORGANIZATION
Mr. GIDDINGS. Thank you, Mr. Chairman.
I would like to express my gratitude to you for your leadership and your foresight in calling this hearing today. I want to start off by expressing the thanks of the biotechnology industry for the consistent hard work and efforts of the administration and the regulatory agencies involved.
Page 82 PREV PAGE TOP OF DOC I am here today on behalf of the Biotechnology Industry Organization, which represents 845 companies in the United States and throughout the world. Our companies are using biotechnology to add value to products and to produce new products in both the health care and agricultural sector.
I am responsible for serving the agricultural sector members. If it meets with your approval, what I would like to do is enter my written comments into the record and then follow the example of my good friend and colleague of many years, Dr. Meeusen, and try and reinforce some of the comments that have been made today and see if I can add a little bit of value.
Mr. EWING. That would be very appropriate.
Mr. GIDDINGS. Thank you.
What I would like to do is, I have some handouts, I do not know of you folks have them. I would like to use those as the basis for my initial remarks. The document I would like to refer to right now is labeled USDA-APHIS-PPQ-BSS Biotechnology Authorizations.
What I would like to do is rely on this document and give you a brief overview in very concrete terms of what biotechnology is doing to deliver improved value to farmers and consumers in the United States and throughout the world.
The date on this document as printed is January 31, 1999. You see that crossed out and handwriting below that February 28, 1999. What we have here is data that summarizes the regulatory activities of the Department of Agriculture in the biotechnology arena over the past decade or so.
These data are essentially real time data. This summarizes what this office has done through the end of the month of February. It is pretty unusual to see that kind of alacrity.
I would have a pretty printed version of this sitting on my fax machine in my office today, which I did not have a chance to pick up because my 3-month old son has a bad cold. So, I came straight here today. So, I hope you will forgive me.
Page 83 PREV PAGE TOP OF DOC If you will look at the first pie chart, this illustrates the kind of work that is being done to improve new varieties in agricultural production in the United States.
Herbicide tolerant crop plants represent about one-third; 29 percent of the total. Insect resistant, about 24 percent; product quality, about 20 percent; agronomic properties, about 5 percent. In short, most of the major constraints on production are being addressed through biotechnology.
The next figure is a bar chart which shows most frequent crops field tested from 1987 through the end of February. No surprise, corn is at the top of the list as being the highest value commodity crop in the United States.
Tomatoes, potatoes, soybeans, all of the major agricultural crops of substantial economic significance are being improved with biotechnology.
The third bar chart is labeled Field Sites. What that does is illustrate that these crops have been planted and are being planted on upwards of 20,000 field test and commercial test sites throughout the United States over the past decade or so.
The last year, the total acreage involved in the United States, as my testimony indicates, was just short of 16 million acres in genetically engineered crops. I will skip the following Field Releases Summary and move to the table entitled ''Field Releases: Infrequent Crops and Microorganisms''.
What that does is list the whole host of the smaller economic value crops that are being improved in biotechnology. That illustrates not only the depth, but the breadth of positive applications for biotechnology in agriculture. Allegheny service berry, American chestnut, belladonna, chrysanthemum, chicory, and so on down the list.
Virtually, everything that is grown in American agriculture can be and is being improved through biotechnology. Similar breadth and depth is seen in views of the research and development activities by other countries around the world, especially in the Tropics, where constraints in production are particularly challenging.
Page 84 PREV PAGE TOP OF DOC The last few pages list the crops that have been subjected to the final approval process by the Agriculture Department and determined to pose risks no different from crops that have not been genetically engineered, and therefore are free from any further regulatory oversight by USDA before they can be planted.
In summarizing these data, I would like to make one point. You have heard a number of times that one of the major strengths of the biotechnology industry and agriculture in the United States has to do with the robust, rigorous, and scientifically-based regulatory process, its openness, and the transparency in public access to the process.
I want to drive home this point and let you know that there is a challenge to our future credibility overseas that you folks have the power here to correct, at very low cost, and very easily. I will illustrate the importance of that by quoting from Benjamin Franklin who said ''A little neglect may breed great mischief. For want of a nail, a shoe was lost. For want of a shoe, the horse was lost. For want of a horse, the rider was lost.''
The unit at USDA that does this regulatory work no longer exists. Its functions have been parceled out in a reorganization back to the ancestral bureaucratic units. A variety of budgetary problems has resulted in them taking a 6.5 percent cut in their biotechnology budget last year.
This, I would submit, sends a very misleading signal to our competitors overseas about the importance of the regulatory process. I would encourage you to take a look at this. All of the members of your subcommittee should have a letter from me drawing your attention to this problem.
I would encourage you to take a good hard look at it and make sure that this unit and the Department overall has the resources necessary to continue to spread and share overseas the information about what we do regulating here in the United States, and why it works, and how it is credible as a necessary prerequisite to our success in opening markets overseas to these new products.
Page 85 PREV PAGE TOP OF DOC On a final note, I would like to conclude very quickly by pointing out that all of the benefits you have heard about I think have down played what I think may be the single most important impact of biotechnology in agriculture. That is that biotechnology is in the process of transforming American agriculture onto a much more sustainable footing than we have ever seen before in the past.
I can illustrate with one concrete example. Insect resistant cotton grown in the United States over the last 3 years has enabled, because of the genetically engineered insect resistance, has enabled cotton growers to avoid spraying 3.4 million liters of pesticide compounds on their cotton fields.
That translates into 48 railroad tank cars full of pesticide that farmers did not have to handle, did not have to spray on the cotton for pest control, that did not get in the ground water or runoff water.
The environmental impacts of growing cotton in our cotton belt have been dramatically reduced because of this new technology. There are similar benefits to be offered. They translate at every level to give advantage to consumers and producers around the world.
On that note, I would like to end. I would be happy to take any questions.
[The prepared statement of Mr. Giddings appears at the conclusion of the hearing.]
Mr. EWING. Thank you very much. Dr. Collins.
STATEMENT OF HARRY COLLINS, DELTA AND PINE LAND COMPANY, ON BEHALF OF THE AMERICAN SEED TRADE ASSOCIATION
Mr. COLLINS. Thank you.
Good afternoon, Mr. Chairman and members of the subcommittee. I am Harry Collins of Delta and Pine Land Company. I am pleased to present the views and comments on agricultural biotechnology for the American Seed Trade Association.
Page 86 PREV PAGE TOP OF DOC Today's remarks will highlight several key areas: safety, benefits, coordination, and acceptance of biotechnology. I also will cut out some of the text here that we have handed in.
I will now address safety.
Plant breeding is safe. ASTA believes that biotechnology can make it even safer. The technology enables plant breeders to move single genes instead of having to move thousands. Biotechnology offers breeders the ability to identify genes, proteins, and potential toxins more efficiently. In doing so, unique combinations are assembled and safety is increased as well as variety. In the end, it is these efficiencies that bring forward varieties with beneficial traits that include disease resistance, reduced pesticide use, increased nutritional composition, herbicide tolerance, rapid growth, and improvement in taste and quality. Examples of products that began with the seed include cotton, corn, soybeans, and potatoes that require fewer applications of herbicides and pesticides; tomatoes that soften slower and remain on the vine longer, and are more flavorful, and appealing to the eye; genetically enhanced soybeans that are lower in saturated fats, higher in acid; virus resistant papayas that yield more, and peppers that are modified to be sweeter and firmer post-harvest. All are deemed safe by regulators are gaining rapid acceptance by consumers.
On addressing the benefits, any discussion of biotechnology must include benefits accrued today and those expected tomorrow. Here is a preview of what members of the see industry are working on and what all of us can expect to see, taste, and utilize in the coming years. While the volume of biotechnology crops continues to grow and will increase farmer expectations and acceptance, our food chain will continue to incorporate these changes in consumer products. Benefits that can be expected in the near future will include a reduced level of natural toxins in plants, simpler and faster identification of pathogens, toxins and contaminants, and increased shelf life. While these are benefits, here are the likely products. Oils, such as soybean and canola, containing more stearate, making margarine and shortening more healthful; peas grown to remain sweeter and produce higher crop yields; smaller seedless melons for use as single servings; bananas and pineapple with delayed ripening qualities; peanuts with improved protein balance; fungal resistant bananas; tomatoes with higher antioxidant content in current varieties. Potatoes with higher starch than conventional potatoes, reducing the amount of oil absorbed during processing of the food, such as French fries or potato chips. Fruits and vegetables fortified with or containing higher levels of vitamins such, as C and E, to potentially protect against the risk of chronic diseases, such as cancer and heart disease. Garlic, cloves producing more allicin, possibly helping to lower cholesterol levels; higher protein rice using genes transferred from pea plants; strawberries containing increased levels of ellagic acid, a natural cancer fighting agent. Peppers, strawberries, raspberries, bananas, sweet potatoes, and melons that are enhanced for better nutrition and quality; and strawberries with higher crop yields and improved freshness, flavor, and texture.
Page 87 PREV PAGE TOP OF DOC Now, the coordination I want to address. As the seed industry continues its charge to bring to the market new technologies and varieties designed to feed a growing population and avert starvation, increased coordination, education, and information will be required.
ASTA is doing its part to educate, inform, and update consumers, farmers, environmentalists, and others interested in learning more about biotechnology. One example of this sustained effort is a study tour that was coordinated by ASTA last summer, after the negotiations for the biosafety protocol in Montreal, in which 18 people from 18 developing countries participated. The had the opportunity to travel to six premiere biotechnology companies in five States to see firsthand the genius of the industry that is working hard to feed a world expected to reach 9 billion people by the year 2050.
Labs were opened, discussions were held, and fields were visited. In many ways, mysteries and misperceptions were dispelled. In the end, it will be as former President Carter said an editorial in the New York Times:
Responsible biotechnology is not the enemy; starvation is. Without adequate food supplies at affordable prices, we cannot expect world health, or peace. The world's farmers will not meet this challenge unless they have access to current planting methods and to continuing breakthroughs in the agricultural science and technology.
Acceptance of the biotechnology will hinge on our ability as an industry to provide the information that in turn reinforces the confidence in biotechnology. Already, farmers here at home are showing their growing acceptance of new varieties that offer much promise. Expectation are high on both sides. Performance is paramount, as is efficiency, safety, and economics. While farmers are certainly the first in line to consider biotechnology products, the consumer is the ultimate judge of biotechnology. Another aspect of acceptance must include a nurturing of a higher level of comfort that includes consumer groups, environmental advocates, and the scientific community in general, which has been addressed here today.
Page 88 PREV PAGE TOP OF DOC ASTA firmly believes that for biotechnology to effectively complement food systems, traditional plant breeding and a growing world, acceptance is key. As an example of the more than 80,000 species of edible plants known to exist, humans cultivate only about 300 of them. Of those, only about 12 have emerged as major staples. Through biotechnology, plant breeders can increase the use of plant species, expand the genetic variation and staple crops, and examine plant specimens held in gene banks around the world, and utilize them in a responsible and direct way. People everywhere must believe that biotechnology is an acceptable technology that will provide sufficiency, genetic diversity, food safety, and environmental stewardship.
In conclusion, I would just like to say that I appreciate the opportunity to speak here to you to represent ASTA. We obviously believe that biotechnology holds a great deal of promise for the future. My remarks are included in the text.
Thank you very much.
[The prepared statement of Mr. Collins appears at the conclusion of the hearing.]
Mr. EWING. Thank you. Mr. Beachey.
STATEMENT OF ROGER N. BEACHEY, PRESIDENT, DONALD DANFORTH PLANT SCIENCE CENTER, ON BEHALF OF THE COUNCIL ON AGRICULTURE SCIENCE AND TECHNOLOGY
Mr. BEACHEY. Thank you, Mr. Chairman. I appreciate the opportunity to speak here to you and to represent CAST. We obviously believe that biotechnology holds a great deal of promise for the future.
I currently took a new position as the president of the Donald Danforth Plant Science Center in St. Louis, MO. This center is a unique one because it is devoted to the activities of basic fundamental science for the benefit of agriculture and humanity.
It was established as a unique organization that combines activities by the State of Missouri and the Danforth Foundation in St. Louis.
Page 89 PREV PAGE TOP OF DOC It includes in its partnerships, the University of Missouri-Columbia, and the University of Illinois-Urban, the University of Purdue, and Washington University, as well as its premiere botanical institute, the Missouri Botanical Garden with support from the Monsanto Company.
Yet, it stands as a not-for-profit stand alone research institute. I also testify on behalf of CAST, the Council for Agriculture Science and Technology, which is located in Ames. CAST is a nonprofit organization composed of 36 scientific societies and a variety of other members.
Its mission is to identify food, fiber, environmental, and other agricultural issues, and to interpret related scientific research information for legislators, regulators, and the media for use in public policy decision making. Nevertheless, I am speaking as the only bench scientist in this group.
My colleagues have been at that stage. I remain committed to fundamental research as a part of my career goal. I remind you of several things. Biotechnology, per se, is not a new application in science.
It has been used in agriculture for many years. However, with the advent of the scientific understanding of the structure and nature of DNA, the agricultural sciences, as well as the biomedical scientists, and the pharmaceutical industry came to know several key facts about DNA and genes, and how to use them.
We now know how they are constructed. We know how genes are turned on and turned off. More importantly, for the development of modified crops as we were talking about today, they learned how to transfer genes to cells, and how to regenerate those cells into whole crops.
This lead logically to many applications in agriculture and in food; many of which we use today, as we have heard throughout this morning's testimony, with advantages for all of the components of society.
Page 90 PREV PAGE TOP OF DOC I would like to enumerate those that we are concerned about today, who have been the beneficiaries to-date. You have heard from the seed producers industry.
The seed producing industry has gained new methods to develop novel crop varieties that are resistent to certain kinds of diseases caused by fungi, bacteria, viruses, and to certain herbicides.
In most cases, biotechnology made it possible to succeed where classical approaches in breeding did not succeed. So, it is what you heard before. It is additive to an existing technology base in classical crop breeding.
These advantages will grow and expand as seed producers continue to improve varieties for nutritional qualities and other traits that you heard Mr. Collins allude to in the previous presentation.
There have been obvious benefits to the farmer. Otherwise, we would not see the farmer pull this technology into their application. We are not seeing a push, we are seeing a pull.
New varieties have a plethora of advantages for the farmer. We have heard already about reduced need for agriculture chemicals that are usually applied to control pests and pathogens.
We have heard of reduced tillage that causes loss of valuable top soils. It has been estimated that now, for the fist time in our agriculture history, we are now rebuilding top soils through low tillage, rather than losing it to wind and rain.
That is coming as an adaptation of new crops and new cropping strategies, some of which are made possible through biotechnology. The benefits to the consumer, however, are often lost.
With the current products, the consumer considers that these are benefits to the producer and not to them. In fact, they may appear to be indirect. However, I think we have done a very poor job of educating our public.
Page 91 PREV PAGE TOP OF DOC We have used reduced chemical applications as was indicated by the previous speaker, which has lead to improved environmental implications that are generally not recognized by the consumer.
We have not done a good information job. We ought to sell our materials based upon the benefits of the environment that are real and have been documented by independent researchers around the country.
The next generations of crops, however, are seen as more likely to benefit the consumer. We have heard some of those again.
That is that we expect to have increased nutritional value, increased flavor, taste, and even some medical benefits that come and are delivered through foods.
The concerns of our trading partners are, of course, important and play an important role in how we develop our science.
I should remind the chairman and the subcommittee that in fact the scientists in Europe that I know are greatly in favor of the advances of this technology just as we in the United States are. They have been silenced in many regards and no longer speak out as we have done in the United States.
It is hard to see my colleagues in Europe not be able to speak out. They have been held back because of situations in their own countries or pressure they have received. It is not that they do not believe us to be safe. They in fact do.
Otherwise, we would not see more than 300 field tests going on in Europe. These field tests are, in large part in many of these examples, are field tests developed from research done by scientists in Europe.
Let us not lose track of the fact that they are heavily engaged. They are not quite as free to talk about it as what we are. I think because the red light is on, I will cut my remarks short.
Page 92 PREV PAGE TOP OF DOC I have raised a number of issues that we think are important. The concerns of the Europeans, in terms of the science can each be addressed, which it is a question about the selectable market that is used in biotechnology, the concern that trans genes will escape and cause uncontrollable damage, concern about super diseases, super weeds, super insects have all been addressed at the scientific level.
We are satisfied and confident that our science has lead to new uses in agriculture that will indeed benefit the environment, as well as the consumer.
Thank you very much, Mr. Chairman.
Mr. EWING. Thank you, Dr. Beachey.
[The prepared statement of Mr. Beachey appears at the conclusion of the hearing.]
Mr. EWING. Thank you, Dr. Beachey. Mr. Thornton.
STATEMENT OF JAMES E. THORNTON, VICE-PRESIDENT, AGRICULTURE, DEMEGEN INC., SCOTT, MO, ON BEHALF OF THE INSTITUTE OF FOOD TECHNOLOGISTS
Mr. THORNTON. Thank you, Mr. Chairman.
It is a privilege to be here today and also to be the wind-up speaker here today. It has been almost 20 years since I have been before this subcommittee. I spent almost 40 years at Agriculture.
I can assure you that the past 6 years have been the most exciting, in terms of the field of biotechnology. As you have heard so often here today, this science, these new methods offer great prospects for the future.
I am here today representing really kind of 42 hats, so to speak; one representing the Institute of Food Technologists, which consist of about 28,000 scientists in the food industry, in Government, in the private sector, and universities.
Page 93 PREV PAGE TOP OF DOC I am also here as the vice-president of a small biotechnology company. Not too many of us left, OK. The other irony here is that these technologies we are hearing about today, for the most part, started and were basically developed and perfected, invented, call it what you may, by individuals, by university professors, by small companies.
On the other hand, we have seen in the past decade this technology essentially become the driving force for restructuring the chemical and seed industries of the world, to give you some idea of the magnitude, the seriousness, the benefits, and the promise this technology has.
As we move forward, yes, there are problems. As we have heard so often today, we have those who do not understand, some who do not want to understand, and we must deal with those issues.
With farmers, the three driving concerns they have are yield, yield, and yield. In this business, as has been often said here, it has to be science-based. It has to be science-based. It has to be science-based.
I particularly want to commend the chairman and this subcommittee for basically announcing today that they are going to take a close look at the EPA proposed rules having to do with this industry; particularly as it relates to plants.
More importantly, the notion of classifying an organism put into a plant as a plant pesticide. As was indicated here at one point, it is like putting a cross and bones label on a product.
It certainly sends, in my judgment the wrong message to the world. Especially to that part of the world that basically already has great misgivings and misinformation about the importance of this technology and its safety. We must deal with that.
I have also had the privilege the last 2 years to work with CAST, the Council on Agriculture Science and Technology and their conversations on change, if you will, where we are basically trying to improve the communication between the agricultural scientific community, public policy makers, and public news media.
Page 94 PREV PAGE TOP OF DOC That has to happen. I also suggested that I think a lot of the problems that you are seeing with the world is because, as was mentioned earlier, that trust between the public and the Government is not there as strongly as it is here, and the confidence in our agricultural scientific community.
We have to maintain and further nurture that relationship and to make sure we are responsive to public concerns about safety. That we are honest with the public about what risks may be present here. There are some.
Basically we have to be candidates of candor in that regard. To give you just a couple of very quick snippets, in terms of again the importance of small companies and individuals to these kinds of developments, our own company is extremely small.
We recently have established a very important licensed relationship with one of the companies at this table, I am happy to say. The point is the science that was developed by one single scientist that is with our company is what I call or refer to as kind of a platform technology here. That is to say, it has potential, in fact use. Projects are going on now where we are basically putting genes into plants to confer broad fungal and bacterial resistance.
Another technology we have to improve the nutritional quality and content of plants; we can now design genes with any composition of essentialacids we desire. The implications of that for world food needs and for the animal feeding industry here are very far-reaching.
This technology also has great potential in the industrialarea. I am not mentioning this as if this is the only thing going on there; far from it. There are thousands of things like this going on.
There are many things coming up through the pipeline which basically puts this country today, and I think will continue far into the future as the leading basically scientific country in the world, in terms of this technology.
Page 95 PREV PAGE TOP OF DOC We have got to keep it such. I urge you all to stand tall against the biohysteria extremist, whether they be here or elsewhere in the world who have other political agendas, and who will basically do everything they can to thwart the furtherance of this technology.
I also call to your attention that there are some other concerns that I assume down the road this subcommittee will get into. I think they are worthy of careful scrutiny.
There are issues having to do with intellectual property rights, what we call the freedom to operate, in terms of who owns these enabling technologies, how they are used, how they are licensed.
These are issues which I think bear a careful look and basically to ensure that this technology continues to bring the benefits, not only to the people in this country, but to the world.
Furthermore, I think we have to be sensitive to the importance that this technology has in the developing world. I suspect some of the things you are seeing going on, in terms of the biodiversity treaty and other things, is a reflection of the concern of many of these countries as to whether or not they are going to share in the benefits of these technologies.
I think we not only have to reassure them that, that is going to be the case, but in fact make certain that they do. Again, I commend you for what you are launching here in this series of hearings.
Anything we can do to help further the education, not only in this subcommittee, but in the country and the world in this regard, I think we all stand ready to cooperate.
[The prepared statement of Mr. Thornton appears at the conclusion of the hearing.]
Page 96 PREV PAGE TOP OF DOC Mr. EWING. Thank you and thank you to all the panel for participating.
Mr. Giddings, the convention on biodiversity just ended about a few days ago without any agreement on protocol. How would this proposed protocol impact the global trade of products derived through biotechnology?
Mr. GIDDINGS. Well, Mr. Chairman, that is a very good question. That is the $64 billion question. There is not a clear answer for one simple reasons; nothing was agreed.
I will try to answer that from the standpoint of the text that was on the table when the protocol discussions were suspended in Cartegena about 6 a.m. the day after the meeting was formally scheduled to conclude.
Proposals that were in the draft text, which the chairman had in a display of Napoleonic authority imposed on the working group, would have imposed a prior informed consent-like regime for international shipments of living modified organisms that would have imposed regulatory delays of up to a year, with no guarantee that at the end of that time a decision would be forthcoming, and specifically precluding the option for the shipper, the exporter, or the scientist who was sharing material, specifically precluding them from inferring that silence implied consent.
So, what that is, is a prescription for halting all international movements of genetically modified organisms in a way that would bring, for international cooperation in seed improvement, to a complete and abrupt halt.
So that, right there, would be a sufficient poison pill to doom the agreement in the eyes of those who would take any efforts to implement it and take it seriously. There were a host of other problematic provisions as well.
The chairman's text made an effort to narrow the scope of coverage of the protocol in a way that would be consistent with the negotiating mandate of the group that the protocol be limited to covering living modified organisms that may present some risk of adverse impact on biodiversity.
Page 97 PREV PAGE TOP OF DOC That narrowing of scope was opposed by a large number of countries. A large number of countries wanted to include shipments of commodities destined for consumption or processing.
Some countries wanted to include pharmaceutical compounds or other materials derived through the use of modern biotechnology. In short, a prescription for a complete and total global trade train wreck.
There are a whole host of other provisions that we could get into in more detail, if you would like and if time were to permit. Suffice it to say that at the end of the negotiations, there was no consensus. There was insufficient agreement on the fundamental principles dividing the major parties to allow any kind of conclusion.
In lieu of abandoning the exercise, it was merely suspended with the expectation that it be taken up again at some point in the future and the outcome would be uncertain.
The major threat I think that is posed by this process, and the conclusion that was reached in Cartegena last week is that many of the issues that were so contentious resulted from importing extraneous issues into these negotiations.
The effort did not succeed, but those issues are not going to go away. We should expect that they will come up and bedevil us in other forums. They will come to play in the Codex Alimentarius discussions.
They will come into play in the WTO negotiations. I think that highlights the importance for the administration and the United States to have a very clear view of where we want the negotiations in the WTO to go.
The Europeans are on record as wanting to incorporate means of ensuring that environmental issues are taken into account in a way that we find to be difficult to sustain.
I think at a minimum, we need to make sure that we approach these negotiations with a stated and expressed intent of strengthening the sanitary and phytosanitary provisions of WTO.
Page 98 PREV PAGE TOP OF DOC This is an area that is of extreme interest to my member companies. We are working on this very closely and have some strategies that we are developing. We would be happy to share those with you at some future point.
Mr. EWING. Thank you very much.
Mr. Meeusen, you mentioned something about making plastics out of corn. Is that correct?
Mr. MEEUSEN. Yes.
Mr. EWING. What do we make plastics out of now?
Mr. MEEUSEN. Right now, it is all petrochemical based.
Mr. EWING. So, that would be a tremendous new out source for the use of our corn supply.
Mr. MEEUSEN. The technology is still early. It is maybe 6 or 7 years away. I hesitate to make projections, but if a significant portion of our plastics industry, even 10, 20 percent of it could be replaced with corn starch, for instance, or soybean oils as a feed stock.
One is talking easily millions to tens of millions of acres of American farm families' produce that would have a new market.
Mr. EWING. You say it is 6 or 7 years away before it even gets past the research stage?
Mr. MEEUSEN. In any significant volumes, yes. It is not something we will see in the next 5 years. It is still in the research laboratories, but it is coming.
Mr. EWING. Well, that is very encouraging news. I think many people in the Midwest would be very happy to see that move along.
Mr. MEEUSEN. I only wish it were 5 or 6 years earlier and were here in time to help with the current crisis our growers are undergoing.
Page 99 PREV PAGE TOP OF DOC Mr. EWING. My time is up. I am willing to go to Mr. Condit. I am going to excuse myself because I am due at a committee down the hall where I have a witness. Mr. Lucas will take over the Chair. So, thank you all very much for being here and for your participation.
Mr. CONDIT. Thank you, Mr. Chairman.
I am not sure who should respond to this. I will let you decide that. I am interested in the university partnership. I would like for somebody to define the interreaction of the industry and the university partnership.
Dr. Beachey, maybe you are the expert.
Mr. BEACHEY. There have been a number of partnerships that have been established over the last few years in which universities receive support from research companies or private corporations for research in plant biology and agriculture.
The newest partnerships are those that allow the greatest freedom of scientific enterprise that one can imagine in an academic setting so that you get the excellence of the free thinkers to do the fundamental research that will ultimately lead to new applications in agriculture. Several of those that have come to mind most recently are relatively large ones that have been established at the University of California-Berkeley.
The one I am engaged in is in fact a partnership that involves the State of Missouri, the Monsanto Company, and the Danforth Foundation, with the Danforth Foundation background being, of course, in the Ralston-Purina Company.
What is unique about this partnership, and it may be the only one of its kind, is that in fact leaves all of the intellectual property back with the Center, yet encourages the scientists to be unique and cooperative in interaction with other agriculture schools around the area.
What does the industry gain? The industry gains new information and then has opportunities to acquire the licensed rights to technologies that are developed through their support.
Page 100 PREV PAGE TOP OF DOC This characterizes all of the best of the interactions between companies and universities. Those that, of course, are the most onerous are those that require and mandate that all of the intellectual property be first given to the partner, the corporate partner.
Nevertheless, universities and private companies are learning to work together because private companies recognize that they cannot do everything in-house. They need new information that comes, yet there is so little support for this kind of research in the Federal budget.
Our only alternative is to look for sources that include the private companies. These partnerships are mandated because we do not benefit from the kinds of budgets that are available to these National Institutes of Health.
For example, in the biomedical industry, we need those to drive the industry in the direction that you heard Mr. Meeusen talk about. In fact, some of these discoveries are closer than 5 or 6 years.
They really are within several years away. Yet, our next generation of how we use these incredibly valuable lands that we have for growing produce, for growing the commodity crops; how to use that material in ways that will recognize the value of the land in a sustainable bio-based industry is something that the Government agencies will need to take charge of and to look at, if we are to let our science and the agriculture go together as we think it can and must, in order to drive the economic recoveries that will be necessary in fact of high amounts of food that are produced worldwide.
We need to sustain our agriculture and our agriculture producers through new uses of crops in a bio-based industry.
Mr. CONDIT. Is the university partnership kind of the way to go? Mr. Thornton, if you had something to add to that, I apologize.
Mr. THORNTON. Well, I just wanted to mention that, again, you have touched on something that I think is extremely important to smaller companies. In our case, we were able to basically establish collaborative research and development relationships with almost 30 different agencies and universities around the country, which included the U.S. Department of Agriculture regional centers under what they call CRADAs, Cooperative Research and Development Agreements, and with a number of universities that had basically top scientists in the crops' fields of interest.
Page 101 PREV PAGE TOP OF DOC Through that process, as a small company, we were able to contribute to technology and technical support. They basically did much of the development work to prove this up enough to where basically we were able to license out much of that technology to others.
It was extremely helpful. We could not have accomplished those things without the availability of those kinds of institutional supports.
Mr. BEACHEY. You have asked a very important question.
Is private-public cooperation the way to go and have public companies support research? It should only be a small percentage ofthe total.
It is far more important for the development of the science and the new applications of the genomics era and the post-genomics era that in fact this research be openly available to everyone, as much as possible, so that the most companies benefit from it.
So, as much as possible there needs to be an influx of resources that allow the exploitation of the science that will come after we collect all of the ATs, Gs, and the Cs in the corn genome, and the DNA sequences of these organisms.
All of the challenges are opposed to that. It requires a large input of resources and scientific endeavor that I think are best supported out of federally organized, if not collected resources.
Mr. CONDIT. Let me just ask this. Do you think you can create an atmosphere where you share information that does not jeopardize the companies' prerogative, or position, or fairness of competition, and all of that stuff?
Mr. BEACHEY. I think it does. It requires a different expectation of the scientific community than we have had in the past. That is that there are rights and responsibilities that come along with having the freedom of doing science.
So, that should come with some responsibilities to maintain intellectual properties in such a way that the companies who support the research gain their benefit.
Page 102 PREV PAGE TOP OF DOC A trusting relationship between academics and private corporations will lead to the kind of sharing of information and the actually sharing of technologies; doing things together.
We will do things much more rapidly and better, if these are done in cooperation. This, of course, requires in stead of novel applications of cooperation and protection of intellectual property. That is doable.
Mr. LUCAS [presiding]. Thank you, Mr. Condit.
Mr. Thornton, I read, with interest, your testimony regarding the EPA regulation that would regulate those resistent genes as pesticides and subject plants with genes transferred through biotechnology to registration under FIFRA. I have been told that this is the equivalent of designating the human immune system a pesticide.
You can consider that however you might. Would you elaborate for a moment on this area?
Mr. THORNTON. Again, it really comes down the issue of does what they are proposing have a really scientific base? I suggest to you that it does not. I am not saying that.
I point to a number of agricultural societies that I think probably make up something like 80,000 agricultural scientists in this country who have made that statement; who have issued reports on that.
Their report, in turn, has been further confirmed by CAST, the Council on Agriculture Science and Technology. My point is, is that it has got to be science-based. We have got to be so careful about this because of what we have talked about here all day.
That is sending the wrong signal; not only to our own citizenry, but to the world. If there is a wrong signal out there, you are going to unleash a lion of resistance and problems throughout this world; the kind you have never seen before. So, I think we have got to be very careful about that and stand tall against it.
Page 103 PREV PAGE TOP OF DOC Mr. LUCAS. Let me ask a followup question. I understand that they claim that their rule will be made workable by granting exemptions on registrations.
Mr. THORNTON. Nonsense. Exemptions mean you have got to file. It means you have got to go through a long bureaucratic process of basically fighting your way through to obtain the exemption.
I think that will have a very chilling effect on further scientific development. I think it will be particularly difficult on university researchers.
I think it will be particularly difficult on industries, such as the vegetable industry, that basically develops hundreds if not thousands of new cultavars a year.
The cost for all of that process is not small; to say nothing of the time and delays that would be caused by it. I, for the life of me, do not understand why the U.S. Department of Agriculture is not basically standing more firmly in this area and continue to provide the kind of regulatory oversight that it has been providing, I think, very adequately over time. If there are provenfine. No one wants to compromise the public safety here.
If there are issues of that kind, let us deal with it. We do not need another layer of Government regulation. The other serious implication of this, aside from the world implication, is that I fear that if you get this new layer, what are the 50 States going to do? Are they going to basically also adopt another layer? Where does all of this end?
Mr. LUCAS. One last question. I think you have answered my question about the practical nature of it and what the budgetary impacts would be.
Let me read a quote here. If you, Mr. Thornton, you or Mr. Beachey would like to offer a comment, I would appreciate that.
The Office of Science and Technology Policy published in the Federal Registry, a policy for regulation of products derived from biotechnology. Let me quote as I understand a part of the policy.
Page 104 PREV PAGE TOP OF DOC ''Describes a risk-based, scientifically sound approach to the oversight of planned introductions of biotechnology products into the environment that focuses on the characteristics of the biotechnology product and the environment in which it is being introduced; not the process by which the product is created.''
For either one of you, does the EPA's so-called plant pesticide proposal, is it consistent with this concept?
Mr. BEACHEY. No. In fact, if you read further in how the regulation worksI should come put and say that I think that when the industry developed, and as it developed, it was important to have regulatory guidelines that would assure acceptance and proven safety.
Those are really very important. It is really very important that we recognize that. It is also important to recognize that as we learn more about the science, those regulations should change.
That is the situation that I think the EPA finds themselves in now. In fact, if you go farther in that written statement that you just read, it does, however, exempt all plants that are developed through classical crossbreeding.
It captures all of those, all of the varieties that are captured by genetic transfer. So, although they say in the wording that it is not based on method, there is a methodology there.
It is not appropriate wording. I think it is misleading to you and to other Members of Congress who would have read it. We, in the scientific community, think those are really incongruous.
Mr. LUCAS. Obvious, Mr. Condit, we have an area here that we need to spend some time on in the coming months.
Mr. CONDIT. I have a last question I would like to ask Dr. Beachey. You mentioned earlier in your testimony, and by the way, I appreciate all of your testimonies. They are very interesting. I hope we can get you back sometime.
Page 105 PREV PAGE TOP OF DOC The public was not educated on this issue. Then you made the other mention of the lack of freedom of expression by other scientists in other countries.
Could you give us some advice on how we would better education the public on this issue, and how we create a better environment for freedom of expression for our brothers and sisters in other countries to speak on this issue.
Mr. BEACHEY. It is interesting. I think 8 or 10 years ago, we really did a fine job by the coordinated activities of companies that were developing new products and Government regulatory agencies who sought new information held public hearings.
Then beyond that, there were town meetings. There were education to gardening clubs, to all sorts of people who requested information. Many of us in the academic community who participated then became silent.
We were quiescent because we thought the battle had been won. It was not until last year at a meeting in Germany that I really realized how far wrong we were. The scientific community needs to become involved.
The companies need to become involved and speak about the benefits without appearing to be self-serving. That may be difficult. The Federal Government needswhen you have taken the stances that you have to assure safety, to assure usefulness in the environment, to assure consumer confidence, that there be ways to make that known to the consumer.
In the past we have said that a substance, if not described, must by implication be safe. I think that we may want to say in our description of value of the technologies, that we tell the consumer why we consider it good.
I think a major mistake was made when we did not describe the benefits of the technology. The tonnage of chemicals that are saved by insect resistant crops, the amounts of fungicides that are save, the amount of soil that is saved.
The fact that our agriculture has returned in the last 10 years, something like 25 million acres into wildlife reserve wildlife reserve because we have increased productivity.
Page 106 PREV PAGE TOP OF DOC The fact that we are saving tons, and tons, and tons of top soil scientifically documentable. I do not think the consumer realize that these are benefits of technology. I think we have dropped the ball in some respects in not making that available.
I understand it is difficult to do it from the companies' perspective, but there should be a way to get that information out, which documents that the Federal Government is in fact interested and willing to stand up for the science conclusion, the scientifically-based conclusions, such as those I have described. We need more communication.
Mr. CONDIT. Mr. Giddings, you wanted to respond to that?
Mr. GIDDINGS. Yes. Thank you. I think that is an excellent question. I concur with everything that Roger said.
It is an area that I have spent the last 15 years of my life devoted to trying to communicate, especially internationally, you know, the credibility, rigor, and content of what we have done here to ensure the validity of our scientific reviews and our regulatory process.
I think it is a lot easier to screw this up than it is to get it right because of the cultural differences that beset us in dealing with the Europeans on these issues. That is our most important audience.
The single most important thing that we can do is make sure that the appropriate regulatory agencies have the budgets that enable them to travel overseas to communicate with the variety of audience overseas what we do here at home.
The budgets that they have, you asked, or someone asked earlier if USDA is doing enough? Well, they are doing as good as job as they could possibly do, given the budgetary constraints they have. I would submit to you that for just a little bit of increased budgetary support for travel for international meetings, they could magnify their effectiveness in this arena at a time where it is most crucial.
Page 107 PREV PAGE TOP OF DOC Mr. CONDIT. Thank you, Mr. Chairman.
Mr. THORNTON. I want to mention something in passing here that I think could be of some value to you. I mentioned this to your staff earlier.
Dr. Hoban of North Carolina State University and others have conducted some very interesting surveys, international surveys, in Europe, here in the United States, in South America, as well as Japan regarding people's attitudes toward biotechnology.
They were very perceptive. I can assure you that when you look at this data, the story is not nearly as bleak as some would make you believe. What so often happens is the way you ask your question and the way you present your subject to the public.
I suggest at the appropriate time that you look at some of this data and look at some of this work because I think it is the kind of information that maybe, among other things, we should be showing to the European leaders to make sure they understand what is really going on in the minds and concerns of their own citizens.
Mr. LUCAS. Thank you, sir.
I would like to once again restate my concerns that I expressed to the very first panel. I have confidence in our technology, our scientific community, our production agriculture people to adopt the new resources to be used.
I just worry that we might unintentionally in the way we regulate these products hand to the folks who are our adversaries, in a sense, a golden opportunity to thwart us. So, we need to be extremely careful in how we proceed with the regulatory side.
Once again, seeing no further questions, I would like to thank the witnesses for their time, their insights, and their appearance before the subcommittee.
The record will remain open for 10 days to accept statements and any additional information. Otherwise, this subcommittee is adjourned.
[Whereupon, at 2:33 p.m., the subcommittee was adjourned, subject to the call of the Chair.]
Page 108 PREV PAGE TOP OF DOC [Material submitted for inclusion in the record follows:]
Statement of August Schumacher, Jr.
Mr. Chairman, members of the subcommittee, it is a pleasure to appear before you with Jim Murphy from USTR to review issues involving products from agricultural biotechnology.
THE CHALLENGEFEEDING A GROWING WORLD
The world's farmers and ranchers face two difficult challenges at the dawn of the 21st century: first, to grow more food at lower cost, higher quality, and greater variety than ever before; and second, to produce this abundance on a shrinking natural resource base amid growing concerns about the effect of agricultural practices on the environment.
Many countries, including the United States, are working vigorously to promote technological improvements to meet the need for food and fiber in the coming years. However, some have not matched their scientific advances with the necessary policy and regulatory adjustments. For instance, the U.S. Department of Agriculture is especially concerned about this problem in the European Union (EU).
As Secretary Glickman has said, we should consider these advances seriously and with an open mind. New productsbe they bio-engineered or notmust meet the requirements of the law of the land and undergo rigorous testing and evaluation for safety. Our regulators do and must maintain an independent, arms-length relationship with the sponsors of these technologies. But as these products prove safe, we must use their immense potential to combat hunger and ensure a sustainable future.
The new techniques of biotechnology will be important to meet the world's continuing need for increased and sustainable food production. However, we must put the use of these products in perspective. They are products with an array of tools that make up agricultural practices adapted to specific environments. This technology can lead to decreased dependence on chemical pesticides, increased yields, enhanced nutrient content, and reduced tillage and soil losses. Benefits include increasing biological protection against specific pests and diseases, thereby decreasing the need for synthetic chemical pesticides; augmenting plant tolerance to more environmentally safe herbicides; improving plant adaptability to harsh growing conditions, such as drought, salinity, and temperature extremes; and increasing yields to meet expanding world food needs.
Page 109 PREV PAGE TOP OF DOC Some people will always focus on the risks of new technologies. The concerns they raise are useful reminders that new technologies in food, medicine, transportation, communications, or anything else can pose risks. But we should remember that there are also risks in not taking advantage of the benefits that new technologies may offer.
No one dismisses legitimate concerns about safety, ethics, and values that biotechnology may raise. But neither should people be asked to go hungry for want of a higher yielding variety of corn, when all the evidence tells us it is as safe to produce and consume as any traditional hybrid.
Eighty percent of the additional wheat output in the developing world has come from genetically improved crops, while only 20 percent was the result of more land being planted. New corn varieties that resist both drought and acidic soil could feed an additional 50 million people per year and a biologically developed ''super rice'' can yield as much as 100 million more tons of rice per year than is currently grown in Asia.
Genetic engineering and other agricultural biotechnology are among the most promising developments in modern science. By raising productivity and food production, agricultural biotechnology will reduce the need to cultivate new lands and could therefore help conserve biodiversity and protect fragile ecosystems.
We see in biotechnology and genetic engineering another set of tools through which agriculture can meet the demands of consumers for abundant, safe, nutritious, and affordable high-quality foods. Like any set of tools, we should use them wisely; that is one reason why we evaluate them before they are commercialized.
I would like to take a few moments to outline some of the challenges we are confronting around the world.
European Union. U.S. products from biotechnology face increasing barriers in the European Union (EU) market. Our problems are primarily two-fold: delays in product approval and burdensome labeling.
Page 110 PREV PAGE TOP OF DOC EU Approval Process. While in the United States, on average, a company can secure final regulatory approval for a product from biotechnology within 9 months of a company's submission; the average EU approval takes 18 to 24 months.
The EU approval process has been problematic from the beginning. Political pressure to block products from biotechnology has increased in a number EU countries and member state objections to individual products have become the norm. As a result, this slow process has ground to a halt.
For example, even after EU scientific committee approval of products, member states like France have held up the approval of corn varieties for 6 months, effectively blocking the export of U.S. corn to the EU in 1998. As a result, U.S. corn growers lost $200 million in export sales in 1998, and face similar losses in 1999. In addition, with the exception of two carnation varieties, the EU has not approved any new products since August 1998.
EU Labeling Requirements. Implementation of the EU's novel food legislation in 1998 is adding to the slowdown. This legislation contains labeling regulations that have added to the confusion. On September 3, 1998, the EU implemented mandatory labeling on foods containing genetically modified corn and soybeans. However, details still have not been provided to food processors as to how the regulation will be implemented: companies still do not know which products will be exempt, testing procedures for detecting products from biotechnology, or de minimus levels. Even companies that are trying to export products that are not genetically engineered are having problems. The EU has not established clear testing procedures that allow companies to demonstrate that their products are not bioengineered.
U.S. Actions. The United States has raised concerns about the EU's labeling policy to the EU Commission and in the World Trade Organization's Technical Barriers to Trade Committee. The United States has questioned the scientific basis of a number of these issues with the EU and finds many aspects of the labeling regulation ambiguous and impractical.
Page 111 PREV PAGE TOP OF DOC We continue to encourage the EU to evaluate genetically modified products using scientifically based analysis and to keep U.S. exporters informed of developments in the EU to help ensure that there is no disruption of trade.
In addition, we use every opportunity to educate EU officials and others about the U.S. regulatory process and product safety. Our agricultural counselors and attaches discuss these issues on a nearly daily basis with their counterparts, with regulators, the media, and consumer groups throughout Europe. USDA officials have met with EU member state regulators, given speeches at numerous European conferences, and even testified before the British House of Lords. We have invited groups of European decision makers, government officials, scientists, and journalists to come to the United States to meet with government officials, farmers who use the technology, company representatives who develop the products, and commodity buyers and sellers along the food handling process. In this way, Europeans can see for themselves how we regulate products from biotechnology, how broadly the technology has spread in the United States and why segregation of products from biotechnology from non-biotech products would be unnecessary, difficult, and expensive.
For the future, approval of products from biotechnology was one area identified under the Transatlantic Economic Partnership (TEP) process that could be improved through greater cooperation between EU and U.S. regulatory agencies. A TEP Biotech Working Group met for the first time on February 11 to begin discussing terms of reference for a pilot project that would lead to a comparison and, where possible, harmonization, of certain aspects of U.S. and EU member country regulatory review processes for transgenic plants.
Australia and New Zealand. Australia and New Zealand have been generally supportive of agricultural biotechnology and have regulatory frameworks that should facilitate evolution of the technology. However, Australian State Health Ministers recently asked the Australian/New Zealand Food Authority (ANZFA) to require labeling of all foods containing genetically modified material. New Zealand has historically shared the U.S. position that mandatory labeling for foods containing genetically modified materials should only be required when the food differs significantly from its traditional counterpart in its nutritional composition, use or handling. We will be working with our New Zealand counterparts to ensure that this change in policy does not adversely affect our exporters.
Page 112 PREV PAGE TOP OF DOC Asia. The Japanese Government also has been supportive of biotechnology and has patterned its regulatory process after that of the United States. In fact, just last month, the Japanese Cabinet adopted an industrial revitalization plan that will encourage expansion in the fledgling Japanese biotechnology industry.
Until recently, Japan modeled its labeling policy for agricultural biotechnology products after that of the U.S. Food and Drug Administration. However, Japanese media and consumers are beginning to demand additional labeling. To date, the government has not made any decisions about requiring mandatory labeling. The Ministry of Agriculture, Fisheries and Food Committee charged with reviewing this issue has deferred a decision until June 1999. We will, of course, be monitoring this situation closely and our USDA staff in Japan will be working to address U.S. concerns with the Japanese proposal.
Other Asian countries are watching the actions of the United States, Europe, Japan, Australia and New Zealand while moving forward to establish their own regulatory frameworks. Singapore's Ministry of National Development, for example, recently hosted a meeting for members of the Association of Southeast Asian Nations (ASEAN) to discuss risk assessment procedures and public awareness of agricultural products derived from biotechnology. The event was co-sponsored by the U.S. Department of Agriculture, the U.S. Food and Drug Administration, the U.S. Environmental Protection Agency and the Canadian Food Inspection Agency.
Many Asian nations have active biotechnology research programs. For example, the Philippine Congress is seeking advice on how to market a broad range of products such as virus-resistant papaya and bananas, and coconuts with increased fatty acids.
Korea's National Institute of Agricultural Science and Technology has developed transgenic rice that is resistant to bacterial leaf blight and is working to isolate genes associated with carotenoid biosynthesis in hot peppers.
USDA Efforts. In addition to the actions I described earlier, USDA has undertaken regular efforts to share information, conduct bilateral talks, and sponsor international symposia and workshops to facilitate international understanding of our regulatory process, the factors we take into account in conducting safety assessments, and our labeling policy. Although the roles of our regulatory and trade agencies are very distinct, we collaborate in the education of our trading partners on our regulatory process.
Page 113 PREV PAGE TOP OF DOC In Latin America, we have been working especially closely with Argentina and Chile. Argentina, like the United States, is intent on ensuring that agricultural trade rules do not unnecessarily impede the development and commercialization of agricultural biotechnology. In 1998, Argentina planted over 3 million acres with Round-up Ready soybeans and approved four Bt corn varieties for planting.
In 1998, the United States launched binational consultative committees with Argentina and Chile. USDA participation in these commissions ensures that agricultural issues such as biotechnology are highlighted in discussions with these key trading partners.
The Organization for Economic Cooperation and Development (OECD) is a valuable international forum for building consensus on methodology for environmental and food safety review of genetically engineered products. Scientifically based regulatory approaches for transgenic crop plants have been developed for testing, and now for commercialization and international trade. A significant result of work in OECD has been the adoption of principles and approaches for environmental review of transgenic plants by other nations that are compatible with U.S. principles and assessment approaches. In addition, the OECD-sponsored BioTrack OnLine on the World Wide Web has made available information about field tests and commercial products and regulatory developments of OECD member countries concerning biotechnology, as well as documents produced by OECD. These documents are used by regulators, applicants, and in public education.
In west Asia and North Africa, biotechnology research and biosafety policies are just beginning to take shape. To aid in the education process, the United States and Egypt just last month co-sponsored a workshop in Cairo to inform key officials, researchers, producers, consumers, and local media about biotechnology and biosafety issues. As an outcome of this meeting, officials now have the foundation upon which to establish regional cooperation in addressing biosafety protocol issues and biotechnology research and development.
The United States is a key proponent of a biotech initiative under the Asian Pacific Economic Cooperation (APEC) forum. The United States has sponsored educational workshops aimed at harmonizing regulatory approaches to biotech products among APEC members. The establishment of the United States-Indonesia Food and Agricultural Forum insured continued dialog among senior public and private sector officials of both countries on issues related to food safety, genetically engineered products and trade. We see this as a model to engage the leadership of other countries in a continuing discussion of these important issues.
Page 114 PREV PAGE TOP OF DOC Biosafety Protocol. The latest round of negotiations of a Biosafety Protocol under the Convention on Biological Diversity took place just two weeks ago in Colombia. The goal of this protocol is to protect biodiversity, but it will also lay out requirements for the export and import of living biotechnology products. We have been working with other nations to ensure that the final protocol protects biodiversity, while at the same time does not erect any unnecessary barriers to trade. As a result of the efforts of the United States, Argentina, Australia, Canada, Chile, and Uruguay, the final protocol decisions will delayed at least one year, which we hope will allow increased understanding of these products and how they can be most effectively handled in international trade.
New Round of Multilateral Trade Negotiations. Along with our goals of eliminating export subsidies, reforming State trading enterprises, cutting tariffs, and tightening rules on domestic subsidies, we also have identified as a major objective during the next WTO round of negotiations the clarification of rules on technical barriers that unjustifiably restrict trade. The upcoming negotiations need to ensure that countries neither hinder nor prohibit imports of new products unless there are legitimate scientific concerns. Too often these actions are merely a guise to protect domestic agriculture from import competition and fail to adhere to the WTO principle that such measures be grounded in sound science. We will work through the WTO to encourage the adoption of international standards that facilitate trade while giving full protection to consumers' health and safety. Consumers have the right to insist on such safeguards, and farmers, whether European or American, have the right to a level playing field.
Mr. Chairman, as you can see, we have a full plate of issues dealing with trade in products from biotechnology. I would be happy to answer any questions.
Statement of the American Seed Trade Association
Good morning Mr. Chairman and members of the subcommittee. My name is Harry Collins of Delta and Pine Land Company. I am pleased to bring the views and comments on agricultural biotechnology for the American Seed Trade Association (ASTA). As you and your colleagues probably know, the ASTA is one of the oldest trade associations in the United States. Founded in 1883 and 850 members strong, the ASTA is the premiere advocate for the seed industry and related interests. Biotechnology is our focus and we are pleased to provide our unique perspective.
Page 115 PREV PAGE TOP OF DOC The ASTA, like biotechnology has been around a long time. And, like the technology, ASTA's diverse membership consists of the leading companies here at home and abroad that are developing, providing, supporting and promoting new varieties that hold tremendous promise and opportunity for farmers and consumers everywhere. ASTA and its membership recognize the responsibility we have as an industryto develop the varieties that will bring more nutritious and better tasting foods, higher crop yields and plants that are naturally protected from disease and insects. Because we are all consumers and our customer is the farmer, we take our advocacy role very seriously. In the end, we are all consumers first. We want all families to eat well, enjoy the land and prosper. A safe and plentiful food supply is key. Today's remarks will highlight several key areassafety, benefits, coordination and acceptance of biotechnology.
Plant breeding is safe. ASTA believes that biotechnology can make it even safer. Because the technology enables plant breeders to move single genes instead of having to move thousands, biotechnology offers breeders the ability to identify genes and proteins and potential toxins more efficiently. In doing so, unique combinations are assembled and safety is increased as well as variety. In the end, it is these efficiencies that bring forward varieties with beneficial traits that include disease resistance; reduced pesticide use; increased nutritional composition; herbicide tolerance; and rapid growth and improvements in taste and quality. Examples of products that began with the seed include: cotton, corn, soybeans and potatoes that require fewer applications of herbicides and pesticides; tomatoes that soften slower and remain on the vine longer that are more flavorful and appealing to the eye; genetically enhanced soybeans that are lower in saturated fats, higher in oleic acid; virus resistant papayas that yield more and peppers that are modified to be sweeter and firmer post harvest. All are deemed safe by regulators and gaining rapid acceptance by consumers.
Page 116 PREV PAGE TOP OF DOCBENEFITS
Of course, any discussion of biotechnology must include benefits accrued today and those expected tomorrow. Here's a preview of what members of the seed industry are working on and what all of us can expect to see and taste and utilize in the coming years. While the volume of biotech crops continues to grow and with increased farmer expectations and acceptance, our food chain will continue to incorporate these changes in consumer products. Benefits that can be expected in the near future will include: a reduced level of natural toxins in plants; simpler and faster identifications of pathogens, toxins and contaminants; and increased shelf lives. While these are the benefits, here are the likely products: oils, such as soybean and canola oils containing more stearate, making margarine and shortenings more healthful; peas grown to remain sweeter and produce higher crop yields; smaller, seedless melons for use as single servings; bananas and pineapples with delayed ripening qualities; peanuts with improved protein balance; fungal resistant bananas; tomatoes with a higher antioxidant (lycopene) content than current varieties; potatoes with a higher starch than conventional potatoes, reducing the amount of oil absorbed during processing of foods like French fries or potato chips; fruits and vegetables fortified with or containing higher levels of vitamins such as C and E, to potentially protect against the risk of chronic diseases such as cancer and heart disease; garlic cloves, producing more allicin, possibly helping to lower cholesterol levels; higher protein rice, using genes transferred from pea plants; strawberries, containing increased levels of ellagic acid, a natural cancer fighting agent; peppers, strawberries, raspberries, bananas, sweet potatoes and melons that are enhanced for better nutrition and quality and strawberries with higher crop yields and improved freshness, flavor and texture.
As the seed industry continues its charge to bring to the market new technologies and varieties designed to feed a growing population and avert starvation, increased coordination, education and information will be required. ASTA is doing its part to educate, inform and update consumers, farmers, environmentalists and others interested in learning more about biotechnology. One example of this sustained effort is a study tour that was coordinated by the ASTA late last summer. Following the negotiations for the Biosafety Protocol in Montreal, ASTA executed a comprehensive study tour for 18 developing countries that featured some of the best and unique biotechnology programs in the seed industry. Participants had an opportunity to travel to six premiere biotechnology companies in five States to see firsthand the genius of the industry that is working hard to feed a world expected to top 9 billion people by the year 2050. Labs were opened, discussions were held and fields were visited. In the end, many ''mysteries and misperceptions'' were dispelled and acceptance and understanding grew. To be sure, our work continues and the job of educating internal and external groups will continue, but the commitment to answer the tough questions and to preview and review the science is ongoing. In the end, it will be as former President Carter said in an editorial in the New York Times, ''. . . Responsible biotechnology is not the enemy; starvation is. Without adequate food supplies at affordable prices, we cannot expect world health, or peace. The world's farmers will not meet this challenge unless they have access to current planting methods and to continuing breakthroughs in agricultural science and technology.''
Page 117 PREV PAGE TOP OF DOCACCEPTANCE
Acceptance of biotechnology will hinge on our ability as an industry to provide the information that in turn reinforces the confidence in biotechnology. Already, farmers here at home are showing their growing acceptance of new varieties that offer much promise. Expectations are high on both sidesperformance is paramount, as is efficiency, safety and economics. While farmers are certainly the first in line to consider biotech products, the consumer is the ultimate judge of biotechnology. Another key aspect of acceptance must include nurturing a higher level of comfort that includes consumer groups, environmental advocates and the scientific community in general. To gain and keep their confidence and trust, the seed industry is working hard to remain an advocate of good stewardship, a provider of varieties that will lead to a healthy and plentiful food supply and a preserver of biodiversity.
Ending this statement with observations on the importance of acceptance is not by coincidence. ASTA firmly believes that for biotechnology to effectively complement food systems, traditional plant breeding and a growing world, acceptance is key. As an example, of the more than 80,000 species of edible plants known to exist, humans cultivate only about 300 of them. Of those, only about 12 have emerged as major staples. Through biotechnology, plant breeders can: increase the use of plant species; expand the genetic variation in staple crops; and examine plant specimens held in gene banks around the world and utilize them in a responsible and direct way. People everywhere must believe that biotechnology is an acceptable technology that will promote sufficiency, genetic diversity, food safety and environmental stewardship.
Biotechnology continues to influence and shape ASTA, its members and the entire agri-system. Our ability to prosper as an industry rests on a commitment to pursue responsible, efficient and timely solutions to those who feed and clothe the world. It is the desire and drive that will enable us to move forward as an advocate for safety, coordination, education. However, it will be the access to these new varieties that will forever change the way we serve agriculture.
Page 118 PREV PAGE TOP OF DOC No one company or individual holds all the pieces to the puzzle, when talking about biotechnology. Our work as a seed industry is complemented by our direct involvement and consultation with members of the farm groups, commodity groups, exporters and processors. Our interest as an industry runs parallel to our desire to move forward in a responsible, timely and measured manner. That is why biotechnology will bring new products ranging from asparagus to zucchini, from cotton, corn and soybeans, to potatoes and turf. Biotechnology will help us live better, eat healthier, protect our environment and preserve our heritage and maintain our genetic diversity.
ASTA firmly believes that the integration of biotechnology into domestic food and fiber production holds continued promise and potential for our citizens and similar opportunities for developed and developing nations. We remain sensitive to health, safety and environmental concerns expressed by some trading partners. While we remain respectful to those who seek additional information, experience and assurance, we plan to move ahead with science and a sincere willingness to update, educate and inform all interested parties in a responsible, thoughtful and organized effort.
ASTA will also continue its mission to identify, promote and defend developing markets for all seedthose using biotechnology methods and those dependent on traditional breeding methods. We recognize that there will be markets for both. These so-called niche markets will be supported by constituents here at home and abroad. Further, as these markets are identified and developed, it will be incumbent on the ASTA to work closely with regulators, consumers and farmers worldwide.
Regarding opportunities for new markets, ASTA remains very involved in the ongoing negotiations for the Convention on Biological Diversity. We have worked very hard with the U.S. negotiating team to provide advice and counsel on seed industry concerns. We recognize that there is a need to negotiate a multi-lateral environmental agreement that protects biological diversity without imposing undue restraints on biotechnology or world trade. We believe, as the United States does, a Biosafety Protocol must ensure trade opportunities, but does not compromise, environmental protection. To that end, we will step up our efforts to remain engaged in negotiations and discussions. We will also continue our discussions with allied groups and associations, like those assembled here today.
Page 119 PREV PAGE TOP OF DOC Along the way, as members of the seed industry prepare to bring the products to the market, our consultations with government agencies and regulators will continue, as will our insistence on disclosure, safety and coordination with farmers and consumers and trading partners. Intellectual property rights protection and genetic diversity will continue to play prominent roles as we move ahead. In the end, though, our success will be measured first by the farmer, and ultimately by consumers worldwide. We believe the efforts are worth it and the results to date compelling.
ASTA appreciates the opportunity to submit this statement to the subcommittee and looks forward to offering updates and information, when appropriate. Please feel free to call on us at our office in Washington, DC or any of our 850 members.
Statement of Roger N. Beachy
Thank you. Mr. Chairman and members of the committee, I appreciate the invitation to present testimony for the Subcommittee on Risk Management, Research and Specialty Crops, especially as related to the science and commercial applications of biotechnology. I am Roger N. Beachy, newly installed as the first president and director of the Donald Danforth Plant Science Center, St. Louis, MO. The Danforth Center was created by a unique public(private partnership of funding that includes the Danforth Foundation, the State of Missouri, and the Monsanto Company. This not-for-profit research center also encompasses four major universities, Purdue University, University of Illinois at Urbana-Champaign, University of Missouri-Columbia, and Washington University in St. Louis, and the premier botanical garden in the United States, the Missouri Botanical Garden. In its mission statement, we describe ''A Center Devoted to Discovery in Plant Science for the Benefit of Agriculture Worldwide.'' As its president I am committed to making the Danforth Center an institution that uses the knowledge of DNA sequences of crops plants (often referred to as ''crop genomics'') for improving the value and utility of agriculture in the United States and around the world.
Page 120 PREV PAGE TOP OF DOC I am testifying on behalf of CAST, the Council for Agricultural Science and Technology, located in Ames, Iowa. CAST is a nonprofit organization composed of 36 scientific societies and a variety of other members. Its mission is to identify food and fiber, environmental, and other agricultural issues and to interpret related scientific research information for legislators, regulators, and the media for use in public policy decision making.
My intention today is to relate to the subcommittee some of the scientific concepts related to agricultural biotechnology, why the scientific community is interested and engaged in this and related fields, and our excitement about the future of agriculture and food production. As evident by the brief bio provided with this testimony, I was raised and trained in the Midwest and have been engaged in studies of plant biology for many years. Since the early 1980's, I have worked at the interface of fundamental science and biotechnology. My lab, in collaborations with scientists at Monsanto Company, developed the world's first example of a disease resistant crop plant using what is now known as genetic modification, or genetic engineering. What is not described is that my family was, during my early years, one of the many small farming families that built the infrastructure of food production in the United States. With the modernization and consolidation of farming activities that have led to increasing efficiency and accountability of the farming industry, only one of my uncles remains a farmer. My role in agriculture has, in comparison, been peripheral to production. Nevertheless, my research has been directly related to developing agricultural systems that provide high quality and safe foods in ways that contribute to health of the environment and sustainability of production.
I. A primer and review of the use of biotechnology in agriculture and food production
In strict definitions of terms, the use of biotechnology in food and food production is not new or recent: the bread baking and dairy industries, and the wine and beer industries long ago applied several types of biotechnology to improve their products. Similarly, plant and animal scientists have used a variety of different biological methods, including biotechnology, to develop crop plants and farm animals for the agriculture and food industries. However, with the advent of knowledge about DNA that followed the discoveries of Watson, Crick, and other scientists, we have received the benefits of scientific research far beyond what was expected at the time of the discovery. We are quite accustomed to using genetic tests to diagnose genetic abnormalities and cancerous conditions, to identify bacteria and viruses in our food and blood supplies, to create new medical treatments, and to identify those who have engaged in criminal activities. Some of these applications of biotechnology involve the splicing of DNA molecules to develop new pharmaceuticals. For example, insulin and other drugs are produced in bacteria because that process produces safer and more cost effective products. Many cheeses are produced using the enzyme chymosin that is produced by fermentation in bacteria, rather than being recovered from the stomachs of calves: chymosin is added to milk to aid in converting milk proteins and other components to cheese.
Page 121 PREV PAGE TOP OF DOC During the early 1980's, plant and microbial scientists were studying how a soil bacterium (Agrobacterium tumefaciens) developed the capacity to transfer DNA to certain plants that created tumors. This phenomenon eventually taught scientists how to harness the bacteria to transfer desirable genes, and they later developed strains of the bacterium modified to transfer genes that conferred disease and insect resistance, rather than genes that caused tumors. In subsequent years, other scientists developed alternative methods to transfer DNA to cells, including bombarding cells with very small particles that are coated with DNA. A small amount of the DNA is released from the particles and, at low frequency is taken into the nucleus of the cell and becomes part of the genetic information of the cell.
Concurrent with studies to learn how to introduce DNA to cells, other scientists were studying the nature of genes in order to learn their structure, and how they are ''turned on'' and ''turned off''. This knowledge would lead to understanding why certain types of cells became leaf cells, and others became root cells, etc. In summary of these types of studies, it is now realized that some genes are ''on'' some of the time and ''off'' at other times; some genes are ''on'' all of the time. These studies also led to knowledge about how to use gene splicing techniques to develop novel genes that could be expressed, or ''turned on'', in all cells or in selected cells and tissues when the gene was introduced into a different cell. Lastly, these early studies were used by scientists to develop novel genes that contain DNA from different, or the same, organism(s).
When genes, either foreign, or cognate, are introduced into a cell, the transferred gene is called a ''transgene'', and the resulting cell a ''transgenic cell''. When a ''transgenic plant cell'' is used to regenerate a whole plant from the transgenic cell the plant is often referred to as ''transgenic''. The gene that is introduced into a transgenic plant is transferred to the pollen and egg of the flowers of the plant, and if the flower is fertilized, to the seeds and thereby to succeeding generations. This results in what is referred to as a transgenic crop.
Page 122 PREV PAGE TOP OF DOCBENEFITS OF USING BIOTECHNOLOGY IN AGRICULTURE
For the plant seed industry, the tools that have been developed through biotechnology make it possible to develop new varieties of seeds in shorter periods of time, and with precision not possible through classical approaches in plant breeding. Seed producers use techniques such as DNA printing to follow the inheritance of genetic traits in much the same way that cattle breeders and equine breeders use them to select valuable blood lines. The DNA printing techniques enable breeders to shortcut the selection process when an important genetic trait (e.g., yield, quality, disease resistance, etc.) can be correlated with the presence of a certain DNA marker, or print.
Using some of the techniques described above, seed scientists and producers can isolate a gene from one plant variety and insert it into a second variety by the technique of gene transfer, thereby creating new transgenic crop varieties. For example, it is possible to isolate from a wild relative of, for example, corn or wheat a gene that confers resistance to a certain type of fungus, and transfer the gene to another variety of corn, wheat, or rice, to potatoes, and to other crops. By using gene transfer techniques, the seed producer can ''speed up'' the transfer of genes from one plant variety to another variety of the same plant type, or can transfer genes from one crop type to another.
An example of the use of this approach may be helpful. A research group at the University of California, Davis, lead by Dr. Pamela Ronalds, isolated a gene for resistance to a devastating disease of rice from a wild relative of rice: the gene was named Xa21. When Xa21 was transferred by genetic transformation (by our research group) to cultivated rice varieties used in Asia and the United States, resistance to the disease was conferred to the new varieties. The Xa21 gene was also introduced into non-rice plants, and conferred resistance to bacterial diseases in those plants. Interestingly, some of the other plants used in these studies contain genes that are similar to Xa21, but the plants were not able resist the bacterial disease, presumably because the bacteria became adapted to the cognate resistance genes. In this case, a gene from wild rice may provide a new source of disease resistance in crops such as corn and wheat, as well as certain vegetables.
Page 123 PREV PAGE TOP OF DOC In a second example, scientists in academic and corporate laboratories used gene-splicing techniques to develop new types of genes that, when transferred to transgenic crops, resulted in crops that resist attack by insects or certain diseases. For example, a gene was taken from specific strains of the soil bacterium Bacillus thuringiensis (B.t.) known to kill certain types of caterpillars. The gene that produces the insect-killing protein was modified using gene building and gene-splicing techniques and was introduced as transgenes into corn and cotton plants. The transgenic plants, referred to as ''B.t. plants'', were resistant to attacks by the targeted caterpillars, but not to other insects such as aphids, leafhoppers, ladybird beetles, or other caterpillars.
In another example of gene splicing, partial gene sequences were taken from certain viruses, and used to construct genes for transgenic plants. The resulting plants were resistant to the virus from which the gene sequences were taken, but not to other viruses, bacteria, or other pests and pathogens. In these examples, the seed scientists used biotechnology to develop varieties of crops that are resistant to pests and pathogens that could not be developed by more standard cross breeding techniques.
As a final example of biotechnology, scientists studied plants that are killed by certain types of herbicides to understand why some plants are susceptible to the herbicide and others are not. The studies led scientists to isolate certain proteins that are inhibited or blocked by the herbicide; as a consequence of inhibition, the plant dies. Once the cause of inhibition was determined, scientists developed mutants of the gene so that the protein was no longer inhibited by the herbicide. When the gene was re-introduced into herbicide-sensitive plants the plants became resistant to the herbicide.
These examples describe different types of biotechnology that have been used to develop new varieties of crops. There are many others that might be developed given the appropriate level of research funding and appropriate regulatory processes. For example, it is expected that crops can be developed that are resistant to all or most major diseases and insect attacks, to droughts and floods, and to excessive heat as well as to low temperatures. We are all familiar with the devastating impacts that dramatic and unexpected changes in weather patterns that occur from season to season can have on crop production. Biotechnology can be used to develop plant varieties that moderate the effects of weather on crop yield. We can also expect to have varieties of commodity crops (corn, soybeans, wheat, cotton) that are vastly improved in performance and value in comparison with non-improved varieties. New varieties will have improved nutritional qualities, or properties that make them more suitable for certain uses. The ability to create value in crops will be essential to the continued profitability of agricultural products of U.S. farmers as they compete in world markets.
Page 124 PREV PAGE TOP OF DOC The benefits of biotechnologies to the farmer-producer in the United States, as well as non-United States and developing countries are very significant. In the United States, farmers who have used seeds (and other planting materials, such as seed potatoes) that are improved through biotechnology have, in the main, continued to buy the improved seeds. Indeed, the sales of seeds of crops such as corn, soybean and cotton that contain the B.t. gene and herbicide resistant genes have far exceeded expectations of the seed companies that produce them. And, while there have been some misgivings on the side of the farmers about some of the policies associated with using genetically modified seeds, they have seen their use of harmful insecticides and herbicides decrease dramatically, decreasing the cost per unit of grain or fiber, and increasing their profitability. In some respects, the farmers are pulling the technology through and into the marketplace.
Similar results are being experienced in developing countries where farmers are able to use the new technologies. It is unfortunate, however, that many of the techniques and specific genes that could be used to develop improved seeds in developing countries are not being applied. In large part, this reflects the fact that problems in developing countries are unique to those areas, and these problems have not received attention by the community of academic and private company scientists in the developed world. The lack of attention does not reflect a lack of interest. On the contrary, many scientists and private companies would engage except for the severe lack of funding that is needed to build infrastructure and capacity in developing countries. As a result the problems of the developing countries that could benefit from the use of biotechnologies will lag far behind those of the developed economies until and unless the degree of commitment changes.
Benefits of agricultural biotechnology to the consumer are not readily appreciated by the public at large, at least not at this point in time. The consumer perceives that the benefits of the products currently in the market place have largely benefited the farmer-producer (resistance to insects, diseases, and herbicides) and the corporations that developed the products. In part, this reflects the lack of knowledge by the public on how food is produced. One would expect that when farmers use fewer chemicals to produce foods, or use ''environmentally friendly'' rather than harmful chemicals, it would be perceived by the public as a good thing, rather than neutral. The public does not realize that by using herbicide-resistant crops, coupled with low, or no-till agriculture, valuable topsoil is held in place and is not lost to erosion by wind and rain. Nor is it generally realized that the improvements of yields by farmers has led to the return of more than 25 million of acres of land to wildlife and forest reserves. More than anything, however, it implies that we as scientists have not completed our task of educating the public about the many benefits of agricultural and food biotechnology.
Page 125 PREV PAGE TOP OF DOC Although the first products of agricultural biotechnology that reached the consumer directly benefit the farmer-producer rather than the consumer per se, products that are in the pipeline of development will directly benefit the consumer. In late stages of development are varieties of canola and soy that produce cooking oils that are more nutritious, varieties of corn that contain novel types of starch, and vegetables that retain their flavor and nutritional value longer than non-improved varieties. Thus, it is widely expected that the consumer will see, in the ''second generation'' products of biotechnology those that they recognize as valuable for improving the health and nutrition of them and their families.
Concerns raised by our trading partners regarding the safety of the products of biotechnology: Are there significant risks?
Our major trading partners have raised the specter of unsafe foods that may have been developed by using certain types of biotechnologies as a basis for restricting the importation of U.S. agricultural products. Concerns have been raised based on three major issues:
Use of a selectable marker: this refers to the use of certain gene sequences that are transferred, during the time when transgenic cells are produced, along with a ''target gene'' (for insect, disease, or herbicide resistance). The marker gene, derived from a bacterial gene, confers resistance of the transgenic cell to a common antibiotic that is added to select transgenic cells from nontransgenic cells. Certain critics express concern that the gene might be transferred from the plant to bacteria in the human intestine, and therefore confer resistance to the antibiotic in question. It is well known that under certain, highly selective conditions certain bacteria can ''conjugate'' with other bacteria and transfer DNA between the cells; however, the event is rare unless the conditions for transfer are met. And, while naked DNA can be transferred into cells under very selective conditions, it too is extremely rare. Furthermore, there is no evidence that throughout the millennia of evolution, plant DNA was incorporated into bacteria in the gut of humans or other animals, not withstanding that our diets consist primarily of plants-based foods. Similarly, there is no evidence of plant DNA in human cells. The overwhelming scientific evidence argues against the supposition that DNA from transgenic plants will somehow contaminate bacteria in humans and animals and in some way cause mutations in people that eat foods from genetically modified plants. The concern approaches the ridiculous when critics propose that remnants of DNA that are found in soy meal or soy oil will cause harm in humans.
Page 126 PREV PAGE TOP OF DOC Concern that a ''transgene'' will escape and cause uncontrollable damage in the environment. Some critics have expressed concern that genes for resistance to insects, herbicides, and diseases will be transferred from cultivated genetically modified crops to other crops and cause environmental damages that cannot yet be assessed. In this regard, it is important to recognize that this issue has been with us since the beginning of agricultural plant breeding, and is not unique to biotechnology. Second, it is important to remember that this issue relates only to those situations in which species or varieties of plants that are closely related to the modified crop are planted in close proximity. Since pollen from corn will fertilize corn flowers, but not those of wheat, soy, rice, or other plants, the issue is valid only when a relative of corn is nearby. There are no such relatives in the United States or Europe, or Asia. The situation varies, of course, from crop to crop.
The matter of concern of escape of transgenes is managed in most cases by geographical isolation, i.e., there are not relatives nearby. In those cases where relatives are present in the near or distant vicinity and outcrossing might occur, the more important question of the consequences of outcrossing can and has been addressed to the satisfaction of the U.S. Department of Agriculture before the plant is released for production in the field. In cases examined to date, there are no adverse consequences to cultivation of modified crops.
Concern that a gene will create super-diseases or insects that cannot be controlled by other methods. This concern has been most often raised for crops that contain the B.t. and virus resistance genes, but is anticipated for all genes for resistance to pests and pathogens. It is well established that insects and disease organisms can adapt to chemical insecticides and resistance genes with alarming regularity. Indeed, they are anticipated by seed producers, who as a consequence are on the lookout for new sources of genetic resistance. This is also the case for genes created through genetic modification. However, unlike genes that have been developed through natural evolution, there is real hope and expectation that scientists will develop genes that will either permanently block the selection of resistant strains of insects or diseases, or dramatically decrease the rate of selection.
Page 127 PREV PAGE TOP OF DOC The concern that has been voiced by critics who would not use genes for resistance to insects and diseases is, in my opinion, truly misguided. Diseases and insects have been controlled in recent years by chemical insecticides, fungicides and bactericides. Plants made resistant to pests and diseases by biotechnology have decreased the use of agricultural chemicals by millions of tons per year. It is difficult to understand why it is not a benefit to the farmer, the environment, and the consumer to use insect resistant crops.
Concern that genetically modified crops will contain products that are harmful to humans and animals has been raised as reason for disallowing the use of such foods. The Food and Drug Administration has developed a longstanding history of food safety, and has outlined a protocol for safety that works extremely well for modified as well as non-modified foods. The FDA has determined that modified foods that are chemically and nutritionally equivalent to their non-modified relatives are as safe as the non-modified plants. Furthermore, it is important to recognize that the seed industry also has in place well developed protocols to identify seeds and plant varieties that are unfit for human consumption because of chemical, nutritional, or other differences from standard varieties. The procedures that have been used for many years, and which are standard in academics as well as industry, work well.
In summary, there appears to be little or no concern for the safety of genetically modified foods compared to those that are not thus modified. It is my opinion as an active practicing scientist that each of the safety concerns voiced by critics in the United States, Europe, and other parts of the world are not based on valid scientific concerns.
What are the implications of trade barriers and other potential regulatory hurdles for applications of biotechnology in agriculture and the pharmaceutical industry?
Agricultural biotechnology adds substantially to the ability of the farmer in the United States or elsewhere to produce high quality foods and fibers using techniques that are environmentally friendly and contribute to their profitability. Furthermore, products that are expected to be developed in the near and midterm will provide additional benefits to the farmer, the environment, and the consumer. Similarly, the applications of biotechnology in the pharmaceutical industry will continue to provide new drugs and disease treatments not possible in the absence of the technology. Indeed, as world travel and trade increase and the specter of new diseases and environmental changes that alter agricultural productivity arise, methods to meet the challenges will also need to change. It seems logical, then, to consider that use of the innovations that biotechnology brings to both sectors of the life sciences are essential if we are to meet the challenges of the future as well as the present. In this regard, the United States has the opportunity to lead the world community, both scientifically and economically, to the benefit of humankind, by adhering to the premise that the safety of the products developed through our agricultural and pharmaceutical industries can be established through scientific evaluations and assessments and protocols. To retreat to an era in which scientific evaluation is not the rule of thumb will dramatically slow the introduction and acceptance of new methods and solutions for the health industry as well as for the industry that provides food, fiber, and forest products in the United States and around the globe.
Page 128 PREV PAGE TOP OF DOC Will the markets for American-produced pharmaceutical and agricultural materials continue to increase around the globe? This is not a question for a scientist, but an economist and policy analyst. Nevertheless, my rather extensive interactions with agricultural scientists outside of the United States indicate that there is a growing demand for the technologies that will increase food production in a sustainable and safe manner. Biotechnology is considered one of the key components of solution to the problems in most if not all countries. This is especially true in countries in Asia and Africa that traditionally find it difficult to provide sufficient food for their growing populations. However, they see biotechnology as one component of a comprehensive solution. U.S. scientific innovation, as exemplified by the farming and pharmaceutical sectors, are important examples for many countries. I expect, therefore, that these sectors of our economy will continue to benefit from, and contribute to, meeting the needs of the United States as well as countries around the world.
Statement of Gary Hall
Mr. Chairman, we appreciate your leadership in holding these hearings on a very important topic. I am Gary Hall, president of the Kansas Farm Bureau and a member of the board of directors of the American Farm Bureau Federation.
Biotechnology for agriculture and the food industry is offering remarkable innovations, following the sector's long and proud tradition of new ideas and approaches. Farmers have readily adopted technology, which has stimulated U.S. economic growth through the centuries, boosting our standard of living to one of the world's highest. Biotechnology is providing the new
tools for our growth and development.
The ultimate beneficiaries of technological innovation have always been consumers, in the United States and around the world. Today, Americans enjoy abundant and nutritious foods that cost just 10.7 percent of our disposable income, leaving the lion's share for discretionary purchases that increase our standard of living and fuel economic growth.
Page 129 PREV PAGE TOP OF DOC The promise of biotechnology is not narrowly focused on agricultureit is for consumers worldwide, especially those who now lack resources for adequate diets. Biotechnology provides economic potential in the race between population and the food supply. It could greatly reduce the competition for limited natural resources. New technology, the world's only unlimited resource, alone has the capacity to provide the necessary abundance to bolster future economic and political stability.
Biotechnology has the additional potential of reducing pressure on fragile lands. Moreover, it has the potential to cut agricultural chemical use and surface and ground water pollution. It could reduce incentives to destroy more of the world's forestsat the same time, increasing food
production and availability for much of the world.
Biotechnology has been developing for many years. Its early applications produced better medicines and a few industrial products, but recently its promise of lower costs and adding more value to crops and livestock have stimulated farmer adoption. Today after only three seasons on the market, biotech products account for 50 percent of the soybeans and cotton plantings and 40 percent of the corn plantings. And, more than half of the soybeans in Argentina and canola in Canada last season were biotech products. Its merits are obvious, and are continually being proven to the agricultural community. As a result, consumers are continuing to reap the benefits of increased abundance and improved quality of their food and fiber.
The biotech transformation now underway is perhaps the most important ever, surpassing mechanical power or the introduction of hybrid crops with their capacity to improve animal nutrition. Although new biotech tools are keeping U.S. farmers in the forefront of the continuing struggle for world market, the real competition is just beginning.
By transforming today's commodities into food and fiber products with new attributes and purposesnew capacities to promote health, overcome human deficiencies, enhance taste, all at lower costs, U.S. producers can expand market share and increase returns. But, they must have timely access to the new products.
Page 130 PREV PAGE TOP OF DOC The innovations now coming through our national system of tests and approvals meet the most stringent requirements in the worlda system that was reviewed in detail by the country's top scientists and the public before it was formally approved in the mid1980's. The question in the 1980's concerned the need for a ''super agency'' to monitor biotechnology use especially for medicines, and the answer was no. Existing agencies were given new and more formal tasks, including:
USDA regulates crop and livestock biotech products, especially their field testing to ensure no ''rogue'' products are released into the environment. USDA also manages the nation's meat and poultry inspection.
EPA regulates pesticide safety, and biotech pest control products. It is responsible for evaluating the environmental impact of new plants, animals or pesticides, and for setting tolerances (or exceptions) for pesticide residues on food crops.
FDA is responsible for food safety, and tests extensively for food ''additives'' (except for meat and poultry), which are the responsibility of USDA. FDA is especially watchful of products considered to be drugs, which it tests for both safety and efficacy. Bovine Somatotropin (BST) and Porcine Somatotropin (PST) both were approved by FDA under its responsibility for animal drugs.
No other country requires such comprehensive tests, and the proof is the absence of problems today. The U.S. system has worked well, and continues to evolve as scientific advancements are made. Its success reflects the care that went into its establishment, and the definitions of responsibilities for each participant. American consumers have great confidence in its protections, and it has permitted technology advances beneficial to medicine, agriculture and industry.
The current system is fully adequate, now and for the future. It is supporting biotechnology advances, and no circumstances have appeared to suggest either a new regulatory approach or new regulatory bodies are needed. The wisdom of the 1986 rejection of a ''super agency'' to regulate biotechnology has been reaffirmed through the 1990's. The evidence is compelling:
Page 131 PREV PAGE TOP OF DOC No evidence of any health threat from biotech products has emerged. The responsible agencies practice solid science, stay abreast of developments and have avoided temptations to cut corners. Rather than evidence of new risks, the record reveals that food inspection agencies have moved quickly to provide new protections.
No environmental threats have emerged. Biotechnology reduces dependence on most chemicals and their physical impacts on the soil. U.S. stream and groundwater quality has been steadily improving.
No one wants to take risks with biotechnology. Vigilance and caution are essential. Neither do we want more regulation than absolutely necessary, especially in the absence of any case for more or stricter rules. Appropriate steps to manage resistance to biotech products in weed and insect populations are being implemented.
Not only are there effective rules and watchdog agencies in the United States, but governments around the world evaluate and test new biotechnology products. Sanitary and phytosanitary rules adopted by the World Trade Organization (WTO) must be based on ''sound science'' and thorough and continual testing. We need to: (1) enforce existing trade commitments and mechanisms as agreed to by members of the WTO; and (2) make sure that existing regulations are based on scientific principle, rather than offer technical trade barriers to the European Union or other countries.
Producers also need to know that world markets are open to these products before they are planted. We cannot afford to be left holding the bag if seed producers have not obtained the necessary clearances for Genetically Modified Organism (GMO) products in world markets.
While we believe our system is adequate and effectively safeguards the public and the environment, many of our trading partners are disrupting the free flow of products of biotechnology by refusing to allow them to be imported. Many ''consumer'' concerns used to block imports of biotech products are an outgrowth of inadequate understanding or an unwillingness to comply with the scientific findings of the regulatory systems within these countries.
Page 132 PREV PAGE TOP OF DOC The World Trade Organization must provide for free trade in products of agriculture unless there is sound, science-based proof that importation would cause harm to humans, animals or plants. We must insist that all agricultural products, including genetically modified products are protected by this system.
The next round of WTO negotiations on agriculture begins in November. Trade in products of biotechnology must be on the agenda and must be a priority issue for our negotiators. Existing rules must be applied and complied with in order to protect our ability to trade these products. Any rules on biotechnology products must be based on sound scientific principals and protections for intellectual property.
Trade and movement of products of biotechnology across international borders must be treated the same as any other agricultural product.
We are alarmed at the support for a growing number of international treaties that proclaim to protect the environment and society. Treaties such as the Kyoto Treaty on Climate Change, the Biosafety Protocol and the Convention on Biological Diversity propose strict regulatory measures that are not based on credible risk analysis. The Biosafety Protocol calls for restrictions on the movement of products of biotechnology that would severely hinder movement across borders, greatly increase the cost of marketing these products and put U.S. producers at great disadvantage. These treaties create trade barriers that would prohibit the development of markets for these products.
It is very alarming that EU environmental ministers have proposed that these treaties take precedence over the World Trade Organization in trade disputes. There is no way that we can maintain a sound economy in any industry unless the rules of trade are clear and are allowed to function freely.
In the face of this growing pressure to bring environmental issues to bear on trade decisions it is of great concern that the administration has recently signed an agreement (Transatlantic Economic PartnershipTEP) with the EU for the purpose of incorporating ''the environment and labor into the WTO talks with the intention of giving full weight to the environmental considerations throughout the WTO agreement. As part of the TEP agreement EU environmental ministers will be meeting on an ongoing basis with the EPA administrator in order to have input into the inclusion of the environment in the next round of WTO talks. Farm Bureau is on record opposing this provision of the TEP agreement and also provisions supporting the adoption of the International Labor Organization (ILO) Declaration on core labor standard and standardization of regulations between the United States and Europe.
Page 133 PREV PAGE TOP OF DOC Competition among institutions and decentralization of regulatory decision making is essential to keep U.S. agricultural producers competitive in the world marketplace. There is no need for additional Federal regulation; however, there is a need for better coordination so new products can be brought to the market in an expeditious manner. We support careful monitoring, fully funded by the Congress and a vigorous research program maintained by public sector agencies and private firms. We believe this can be done with confidence in our continuing safety without the need for new regulations or new regulatory bodies.
Statement of Ronald Meeusen
Mr. Chairman and members of the subcommittee:
On behalf of the members of the American Crop Protection Association and its Biotechnology Committee, let me thank you for convening this hearing on the status, prospects and significance of plant biotechnology to American agriculture and for extending an invitation to us to testify on behalf of the biotech industry.
The American Crop Protection Association is the not-for-profit trade organization representing the major manufacturers, formulators and distributors of crop protection and pest control products, including bioengineered products with crop production, protection and enhancement characteristics. ACPA member companies produce, sell and distribute virtually all the active compounds used in crop protection chemicals registered for use in the United States.
Few developments in agriculture have made their debut with the impact seen with biotechnology. Historically, agriculture has experienced several key revolutions, such as the advent of mechanized equipment and the introduction of crop protection chemicals. These innovations have been enthusiastically embraced by the mainstream of American agriculture, with truly amazing results. In just a few years, biotech has made significant contributions to enhanced production of key commodities such as corn, soybeans, cotton and potatoes and offers similar promise to wheat, canola, sugarbeet, tomatoes, rice, barley, sugarcane, papaya and other crops.
Page 134 PREV PAGE TOP OF DOC Plant biotechnology has the potential to overshadow all preceding technological advances in production agriculture combined. Statistics show that the overall value of biotech products in the crop protection market increased from an estimated $80 million in 1996 to $435 million last year. Herbicide tolerance and insect resistance are among the key first generation traits of bioengineered crops. We are already seeing the introduction of second generation bioengineered characteristics, those involving gene stacking, wherein traits are being combined to offer the above mentioned qualities in combination. The latter include such innovations as high-oil corn, high oleic-acid soy, drought-resistant crops and fungal disease resistant varieties.
The next wave of introduced characteristics will involve the genetic tailoring of crops for specific consumers, whether for food, feed, fiber, fuel, lubricants, soap and other characteristics, perhaps even pharmaceutical and plastic components.
This relatively new area of focus for many ACPA members prompted our Board of Directors to commission a task force in 1996 to explore a greater involvement for our association in the biotech field. Ultimately, the Board decided that our members' biotech activities were so closely intertwined with the crop production and crop protection aspects of our businesses that there were many services ACPA could provide for our members by engaging directly in plant biotechnology issues. We formed our Biotech Committee in September of 1997. Membership is open to ACPA members as well as nonmembers. In the committee's charter, we view ourselves as partners with the growers, processors and grocers in bringing the benefits of this new technology to our customers.
In fact, as the functional foods concept begins to take hold as an extension of the plant biotech evolution, we see an on-going close working relationship with all components of the food chain. Our common goal, though complex, can be stated simply: to provide consumers a food supply that is nutritious, safe, plentiful, high quality and affordable.
Page 135 PREV PAGE TOP OF DOC Bioengineered products offer to growers new tools for disease and insect protection which also fill a very important niche in the Integrated Pest Management programs that modern growers are employing. To both large and small farming operations, biotech offers the potential of increased yields and reduced costs. Indeed, this technology promises traits which can revitalize agricultural economies in areas where the land has been non-productive for years. Drought conditions and elevated soil mineral content may become solvable problems, giving countries yet another boost toward feeding the rapidly escalating world population.
Biotech clearly offers the ability to improve the quality and enhance the nutritional content of various foods. New varieties of soybeans and canola, for example, that have healthier fat content profiles and improved rice and cassava types with a higher protein content are now practical.
In the non-foods area, we see markets opening for genetically engineered renewable fuels and lubricants that could slash the dependency on petroleum products. Manufacturing antibiotics and pharmaceuticals in plants is no longer a pipe dream; it is already close to economic reality.
This brave new world of biotech is not without its challenges, however. Now, and for the foreseeable future, the United States can expect fierce competition from heavily subsidized agricultural economies where there are no guarantees that there will be an open market when a biotech commodity arrives. Take the case of Bt corn varieties, which were approved by the European Union, only to experience a shutdown of the market when political obstacles arose in individual member states.
Food safety concerns continue to be proposed, despite the absence of any demonstrated risk for products which have undergone an arduous, science-based approval process. We maintain that there are adequate risk assessment processes in place in the United States and in major trading countries to assure the safety of this technology. There is a very strong vocal minority in Europe and a growing community of doomsayers in the United States who are attempting to create a negative image of biotechnology by raising the food safety issue; yet the fact remains that science, and hundreds of years' experience breeding new food crops, do not support their arguments. While we appreciate and respect the need to provide information to consumers, the vocal minority prefers to cite the precautionary principle mantra that dictates a waiting game until the slightest doubt is erased about a new development's safety. These people are not in the business of ever being convinced, however.
Page 136 PREV PAGE TOP OF DOC Although questions have been raised by committed activists, the regulatory framework that has evolved in the United States for biotech products through EPA, FDA and USDA interaction is contributing to public acceptance of and confidence in foods produced by this technology. The U.S. public trusts the FDA's affirmation that the products of this technology can be evaluated in the same way as foods produced by conventional means. Accordingly, we continue to be reassured that the FDA policy is working and that our governmental oversight is not being dictated by our trading partners.
In similar fashion, questions have been raised as to how and when to identify a plant which has been modified to naturally resist pests. Through its Biopesticides program, EPA has been registering the crops protected by the Bt protein, long favored by environmentalists for its safety, and is attempting to finalize its Plant Pesticide Rule. There is some difference of opinion within the scientific community as to the need for and scope of this rule and ACPA is trying to bring all parties together to negotiate a unified position on this regulatory approach.
Meanwhile, we continue to work closely with our partners in advancing and protecting the real world application of plant biotechnology. Our colleagues are striving to make certain the adoption and management of this novel technology is both appropriate and effective and that growers and processors understand the characteristics of a commodity crop enhanced through bioengineering. In this respect, we are going to great lengths to educate growers as to what new practices need to be put in place to maximize the benefits of biotech and to minimize any potential problems such as insect resistance and cross breeding with conventionally grown crops. An illustration of this is the grower awareness and education campaign being implemented in connection with Bt corn plantings as part of an extensive resistance management plan recently agreed to by Bt corn registrants and the National Corn Growers Association.
As to the impact of these foods on human health and the environment, we believe that the continued regulatory assessment of the safety of these products should continue down the path the United States has developed. Namely, that regulatory provisions be adequate, but not unreasonable, that our decisions be science-based, not socially driven and that our regulatory system focus on products, not process.
Page 137 PREV PAGE TOP OF DOC From the plant biotechnology industry's perspective, the U.S. Government must continue to be a staunch and aggressive advocate of these new technologies on a national and international front. Through our government agencies and the Congress, we need to dismantle any non-scientifically-based trade barriers that would seek to restrict trade of commodities produced through biotechnology and promote trade agreements that guarantee the free and open trade of our ag products, whether produced through traditional or newer methods. Our biotech companies are diligently trying to work with countries receiving genetically modified products and we need our government to be involved and strongly supportive of these efforts.
At the same time, we need to put policies in place that encourage strong research and education efforts to help users of these technologies reap the maximum benefit and return from their investment. A major part of this would be in educating the public on the government's role in assuring the safety of bioengineered products in its partnership with the scientific and academic communities and with industry. We see potential, for example, in USDA's concept of regional pest management offices or ''virtual centers,'' as they were identified. We would also advocate the reestablishment within USDA of the Office of Biotechnology which was lost to funding cuts in fiscal year 1996.
Finally, the independent and academic researchers and the large and small biotech entities could benefit from government-provided incentives that would encourage research and development efforts and protect intellectual property rights. Measures such as R&D tax credits for biotech activities, minimizing the time needed to commercialize products, controlling the costs of complying with government standards and rewarding, not penalizing, market development activities will encourage U.S. researchers and corporations to make even greater progress in channeling the promise of biotechnology to the benefit of society.
Statement of James M. Murphy, Jr.
Page 138 PREV PAGE TOP OF DOC Mr. Chairman, members of the subcommittee, it is a pleasure to appear before you this morning with Under Secretary Schumacher to discuss the trade benefits and challenges of biotechnology for U.S. agriculture.
I note that the subcommittee's has added biotechnology to its jurisdiction. While biotechnology offers great benefitsbenefits that many U.S. farmers have already discoveredthere are many who question biotechnology, and the result has been significant trade policy challenges, particularly in Europe, that have a direct impact on U.S. producers.
THE PROMISE OF BIOTECHNOLOGY
Not since the Green Revolution of the 1960's when high-yielding wheat and rice varieties were developed that increased harvests in Asia by 2, 5 and even 10 fold have technological advances had the potential to so affect world agricultural trade. Agricultural products produced with biotechnology hold tremendous promise for U.S. and global food producers and consumers. Biotechnology holds the key to achieving global food security, establishing sustainable agricultural sectors in developing countries, meeting environmental concerns, and helping U.S. farmers and ranchers maximize market returns.
But along with these opportunities we also face major challenges. While biotechnology is accepted by consumers and governments in many overseas markets, there is tremendous resistance, particularly in Europe, from consumers who fear for the safety of their food, and from some governments that have turned away from scientific principles in evaluating foods produced with biotechnology.
We of course respect any country's right to high standards for food safety; we also reserve that right to maintain the safety of the U.S. food supply. We support the right of countries to maintain a credible domestic regulatory structure with food safety standards that are transparent, based on scientific principles, and provide for a clear approval process in a timely fashion for the products of biotechnology. Such a structure is critical for the acceptance of these products in the global marketplace. But we must ensure, without any question, that any consumer and policy debate about the safety and benefits of biotechnology is one based on scientific principles and not fear and protectionism.
Page 139 PREV PAGE TOP OF DOC Biotechnology is about more than just regulatory processesit is about the fundamental challenge facing U.S. agriculture. As we get ready to enter the next century, the pressure on agriculture to meet global food needs has never been higher. With the world's population growing by about 2 percent annually, there are 80 million more mouths to feed each year. We hear estimates that the global demand for food will triple within the next 50 years. By 2030, Asia's population will be 4.5 billion and the average daily consumption of animal protein will nearly quadruple. Growing middle classes in Latin America and Asia are demanding higher quality diets.
Biotechnology now holds the prospect of another green revolution, and U.S. agriculture is well placed to take the leadership role. So our ability to market goods developed with biotechnology is more than just an economic issue. It's a humanitarian issue, it's an environmental issue, and it's an issue of global food security. It is one of our best defenses against deforestation, land erosion, and water depletion that can destabilize entire populations.
And it is critical to the livelihood of U.S. producers. America's farmers and ranchers now find their income tied more directly than in recent memory to the market. Biotechnology can be one of the most important tools to maximize market returns. For example, a corporate developer of Bt corn, report average yield increases across the United States for Bt corn of 11 percent, with yield gains of up to 25 percent in areas of heavy infestation by the European corn borer. Roundup Ready soybeans reportedly increased yields and allowed many farmers to reduce herbicide use and avoid herbicides that are more toxic and don't break down in the soil as quickly as Roundup. These developments contribute directly to the bottom line of producers.
Producers are already seeing the benefits from what is just the first generation of biotech products, so it is not surprising that plantings of genetically modified crops have increased. Last year, according to industry estimates, around one-quarter of U.S. corn acreage was planted to genetically modified corn varieties, and genetically modified soybeans accounted for almost one-third of U.S. soybean area. A significant percentage of U.S. cotton area was planted to genetically modified varieties last year. It is likely that area for genetically modified crops will expand again this year.
Page 140 PREV PAGE TOP OF DOCTRADE POLICY AND BIOTECHNOLOGY.
Many of our trading partners recognize the benefits of biotechnology, and we are developing increasingly close ties at the technical level. For example, regulatory officials at USDA's Animal and Plant Health Inspection Service and the Canadian Food Inspection Service met last summer to compare, and harmonize where possible, data requirements and acceptable analytical approaches for the environmental approval of new varieties of genetically modified plants. A regular exchange between U.S. and Canadian scientists on this topic is ongoing.
We have likewise had an excellent working relationship with Japan in the area of approvals for genetically modified organismsor GMOs. While some concern was raised last year with the publication by Japan's Agriculture Ministry of draft guidelines on the labeling of foods containing GMOs, Japan has by and large relied on science when evaluating the human and environmental safety of GMOs. We of course are keeping a sharp eye on the progress of the labeling guidelines to ensure against a de facto requirement for segregation between foods containing GMOs and those that do not.
THE CHALLENGE OF EUROPE
Despite these positive developments for biotechnology, we face a tremendous challenge in Europe. The EU is still struggling to decide what regulatory system to have in place. Unfortunately, the EU has experienced complicating factors that have made the whole regulatory and approval process unusually difficult. The public lack of confidence in scientific judgments started with the outbreak of bovine spongiform encephalopathy (BSE) or mad-cow disease, which undermined public trust in food safety. This lack of trust grew as groups opposed to biotech products succeeded in arousing consumer fears, bringing pressure to bear on European politicians. All this was compounded by the lack of an established institutional review process at the EU level that could provide a better foundation for public assurance and confidence in the safety of these products.
Page 141 PREV PAGE TOP OF DOC The abundant scientific evidence in support of biotechnology makes the problems we are having with the EU on this issue all the more frustrating. We have repeatedly told EU officials at the highest levels of the need for a workableand this includes timelysystem for the products of biotechnology.
Nor are we are not alone in our frustration. The Transatlantic Business Dialoguea group of U.S. and European businesseshas on more than one occasion expressed concern over the EU's slow approval process for biotech products and offered recommendations on how to improve the process. We have also seen concern in Canada over lengthy approval ordeals for genetically-modified canola.
While we have to date avoided serious interruptions of our farm trade with Europe, most recently last summer following intervention by the President and Vice President with their counterparts in the French Government, the problem of an inadequate approval process remains, and with it the lack of a solid base from which to build and maintain consumer confidence in the products of biotechnology.
We face two compelling and complicated problems in Europe: the effective collapse of the European Union's approval process for new genetically engineered plants and an incomplete and unworkable food labeling regulation for foods containing genetically modified corn and soybeans.
The 90/220 Approval Process. It has been nearly one year since a plant variety produced through biotechnology has passed through the EU's approval processcalled the 90/220 process. On its face, the 90/220 regulation lays out a specific approval process for the environmental release of new GMOs. The process begins with approval in an EU member state, followed by a scientific review at the Community level in Brussels and concluding with a time-specific period for all member states to raise scientific concerns or questions prior to a vote by all member states.
Page 142 PREV PAGE TOP OF DOC In practice, the 90/220 process has proven to be susceptible to political interference, non-transparent and virtually endless in duration. Scientific reviews that take months in the United States are measured in years under 90/220. Member states have increasingly acted outside of the 90/220 procedures, most recently just last month when the original sponsoring member state for two GMO varieties of cotton failed to vote in favor of final EU approval because of concerns outside of the 90/220 process. There is now a significant number of member states that are effectively unable to participate in the 90/220 process due to a variety of reasons.
The European Commission recognizes the difficulties with 90/220, and has proposed amendments to improve the process. However, it is likely that these amendments will take up to two years or more to be adopted.
Labeling. We are likewise very concerned, as are many U.S. exporters, about EU regulations adopted this past September which require the labeling of foods containing GMO corn or soybeans. These regulations focus on how a food was produced rather than on whether the use of biotechnology has changed its quality, safety or nutritional composition.
The costs to producers and consumers of labeling regulations that are confusing, based on questionable science, impractical, and time consuming will be immense as will be the potential for ongoing trade disputes and disruption. Again, we have communicated our position clearly and directly to EU officials and also within the WTO, where we have presented detailed written comments to the Committee on Technical Barriers to Trade.
The European Commission is still filling the gaps of its labeling regulation as regards testing procedures, de minimus levels and product exemptions. We expect the Commission to publish amendments shortly to the labeling regulation, and we will work closely with U.S. exporters in reviewing these amendments.
It is obvious that U.S. agriculture cannot sit back and wait for a positive turn of events in Europe. Last month the first meeting of the U.S.-EU Biotechnology Group under the umbrella of the Transatlantic Economic Partnership was held in Washington. We intend to use the Biotechnology Group to identify and address regulatory issues that are limiting trade in the agricultural products of biotechnology.
Page 143 PREV PAGE TOP OF DOC At the meeting, the United States proposed a pilot project for the simultaneous application for environmental approval of a genetically engineered plant variety in the United States and an EU member state. Our hope is, of course, to speed up the approval process in Europe through increased contacts between regulators. Our proposal is based on a similar agreement between USDA/APHIS and the Canadian Food Inspection Agency. We are awaiting a response from the European Commission to our proposal.
We also used this meeting to raise our very strong concerns about the general inadequacy of the 90/220 approval process and the specific actions taken by some member states that we believe lie clearly outside of the procedures of 90/220. Commission representatives were aware of these concerns, and have received similar complaints from the biotechnology industry in Europe. We are hopeful that the Commission will act to influence member state actions. But we realize that if successful, this will be only a short-term fix, and we will continue to push for fundamental improvements in the EU's approval process for the agricultural products of biotechnology.
Our message to the EU and our other trading partners remains unchanged: we must focus on scientific principles as the guidepost in guaranteeing food safety.
Those of us in government and industry also need to work harder at getting this message out. We need to continually educate people in the United States and in other countries about the benefits of using biotechnology. Education can help counter the perception that these new technologies will benefit only large multinational companies in the industrialized world, and not the people and economies in the developing world.
We also realize that as long as attention on both sides of the Atlantic is centered on a politically-charged debate over food safety and science, we threaten not only today's bilateral trade levels and the promise of future trade liberalization, but also the availability of an abundant and safe food supply for a growing world population.
Page 144 PREV PAGE TOP OF DOC Mr. Chairman, I would be happy to answer the subcommittee's questions at this time.
Statement of Roger Pine
Mr. Chairman, members of the subcommittee, my name is Roger Pine and I am a corn farmer from Lawrence, Kansas. I appreciate the opportunity to appear before you to discuss the importance of biotechnology to U.S. agriculture. I am testifying today on behalf of the National Corn Growers Association (NCGA), which represents more than 30,000 farmers in 47 states. I currently have the honor of serving as president of the NCGA.
The National Corn Growers Association commends you for holding this hearing. We have come a long way since 1982, when modern biotechnology was first commercialized with the production of insulin for diabetes. It is timely for us to discuss the opportunities that lay ahead as agriculture is revolutionized by biotechnology.
NCGA believes that the future of the corn industry is written in corn's genetic code and that plant genomics will give us the fundamental information necessary for biotechnology to revolutionize American agriculture. The NCGA concurs with Philip H. Abelson's statement, in a 1998 editorial in Science magazine, that we are in the early phases of the third technological revolutiona genomics revolutionand that ''. . . the greatest ultimate global impact of genomics will result from manipulation of the DNA of plants.'' (Science, Vol. 279, p. 2019. A copy of the editorial is attached.) As Dr. Abelson stated, ''ultimately, the world will obtain most of its food, fuel, fiber, chemical feedstocks and some of its pharmaceuticals from genetically altered vegetation and trees.''
As many of you know, because of our belief in the benefits of biotechnology, NCGA has been at the forefront of efforts to secure Federal funding for plant genomics research. Plant genomics research advances our understanding of the structure, organization and function of plant genomes, and accelerates utilization of new knowledge and innovative technologies toward a more complete understanding of basic biological processes in plants. Once genomics gives us the location and function of important genes, the tools of modern biotechnology allow us to improve plants in a very precise and controlled manner. In other words, plant genomics will lay the foundation for breakthrough scientific advances created with biotechnology.
Page 145 PREV PAGE TOP OF DOC Plant genomics and biotechnology are critically important to the nation's corn growers. While world population continues to expand and protein demand increases exponentially, there is an expectation of higher quality, safer and more nutritious food. These accelerating demand pressures mean that existing resources of land, water and nutrients must be used more effectively if the supply of food, feed and fibers is to remain in balance with world needs.
In addition to meeting the needs for food, feed and fiber, biotechnology allows us to provide raw materials for industrial uses (i.e., chemical feedstocks). Currently, the majority of consumer goods are made from hydrocarbons produced by the petrochemical industry. Because of the finite supply of oil and the U.S. reliance on imports for more than 50 percent of our oil needs, it is important for us to begin supplementing U.S. oil with renewable resources.
Crops, trees and agricultural wastes can be used as feedstocks to produce a wide range of everyday consumer goods, such as plastics, paints and adhesives. The utilization of renewable resources will help to cut costs, decrease our reliance on oil imports, reduce greenhouse gas emissions, increase recycling opportunities and create new, world-class industries here at home. Biotechnology will be critical to this effort, as it will allow the manipulation of plant constituents and enzyme extraction systems that will provide desirable feedstocks.
Plant genomics and biotechnology will help scientists, geneticists and plant breeders identify and utilize genes from corn and other economically significant crops that control important traits such as nutritional value, stress tolerance and resistance to pests. The far-reaching benefits of biotechnology include:
revitalization of rural America due to a more robust agricultural sector;
expansion of plant-based renewable resources for energy and raw materials;
significant reductions in crop losses and reliance on pesticides through improved biological methods to control and alleviate serious industrial threats and targeted pests;
Page 146 PREV PAGE TOP OF DOC improved yields and reduced crop losses caused by adverse environmental conditions such as heat, drought and salt;
improved nitrogen-use efficiency, thereby limiting the potential for nitrates in the water supply;
reduced environmental problems confronted by livestock producers, such as modifying the digestibility of phosphorous in feed corn to reduce the amount of phosphorous that enters our ground water;
improved animal nutrition, leading to healthier meat and increased meat productivity;
reductions in the occurrence of mycotoxin contamination by significantly improving resistance to fungal infection;
development of tailored hybrids with valuable specialty starches, oils and protein content; and
reduced worldwide malnutrition due to higher yielding and more nutritious crops.
Genomics and biotechnology are critical to the long-term viability of U.S. agriculture. To compete in the global market, the United States must continually strive to efficiently and economically improve production capabilitiesto maximize yield and combat serious threats from disease, pests, and climate changeswithout harming the environment. Genomics research and the application of modern biotechnology hold the key to achieving this goal.
TRADE IN BIOTECHNOLOGY
Last year 11 different versions of biotech corn were produced commercially in the United States on approximately 20 million acres. These products have all received the necessary approvals from the Environmental Protection Agency, the Food and Drug Administration, and USDA's Animal and Plant Health Inspection Service. Unfortunately, not all of our grain customers accept the U.S. approval process.
Page 147 PREV PAGE TOP OF DOC Approximately 2.5 percent of all corn produced in the United States last year was grown from seed that has not been approved for export to the European Union. The National Corn Growers worked closely with the seed industry to advise producers to use grain from the unapproved corn for domestic feed. Growers who did not have a feed use were advised to choose an approved biotech variety or to plant conventional seed. Despite these efforts, exporters have been unwilling to risk shipments of 1998 U.S. corn to the EU.
Last year, we faced intolerable delays in the approval of biotech corn in the EU. Three registrations were repeatedly delayed as the European Commission referred the products for further scientific review and then as votes were delayed to accommodate political schedules and finally as France delayed the final referral back to the Commission for more than 3 months.
These delays reduced U.S. corn exports to the European Union to less than 3 million bushels last marketing year, compared to almost 70 million bushels the previous year. Mr. Chairman, we produce more than 3 million bushels of corn in Douglas County, Kansas. In Livingston County, Illinois, corn production is more than 37.5 million bushels, twelve times our total exports to the EU last year.
We support the right of importing countries to regulate biotech products. As long as countries or trading blocs conduct timely, predictable, science-based reviews, we are confident that trade will not be disrupted. But when science is subverted by politics and socio-economic concerns, U.S. farmers don't stand a chance.
Unless the EU commits to timely review our problems with corn exports will continue. There are now five corn approvals pending in the EU. The approvals may not be completed before harvest this year. The United States must insist that the EU consider these products in a timely and predictable fashion.
The EU registrations will soon affect food imports, and other nations are requiring similar approvals for grain and food. We expect product registrants who commercialize seed here to fully comply with the registration requirements of our trading partners. However, we recognize that a country-by-country approach becomes unworkable as more nations adopt new standards and approval procedures. We are convinced that an international approval or mutual recognition is absolutely essential to the future of biotechnology.
Page 148 PREV PAGE TOP OF DOC Unfortunately, some of the international discussions have advocated procedures that would hinder rather than enhance acceptance. Under the auspices of the Convention on Biological Diversity, the United Nations is negotiating a Biosafety Protocol that threatens to disrupt all trade that may contain biotech products. Ostensibly, the Biosafety Protocol is intended to restrict transboundary movement of living modified organisms, but the negotiators are considering proposals that go far beyond protecting the environment, including one that would require advance informed agreement prior to every shipment of commodity grain.
The parties were unable to reach agreement at what was billed the final meeting in Cartagena, Colombia last week. This means that neither the moderate approach advocated by the United States, Canada, Argentina, Australia, New Zealand, Chile and Switzerland, nor the extreme approach advocated by many of the developing countries prevailed. We will continue to press our legitimate concerns that the Biosafety Protocol not disrupt trade in products of biotechnology.
The National Corn Growers Association works closely with product registrants and the U.S. Government to encourage our trading partners to adopt predictable approval procedures that assure timely, science-based decisions. During NCGA's annual meeting two weeks ago, our delegate body, the Corn Congress, approved policies calling for:
vigorous efforts by the U.S. Government to speed, standardize, and synchronize approval processes worldwide;
seed retailers to make clear to their customers which hybrids are approved for export and which are not; and
support for consumer choice through standards for goods that do not contain products of biotechnology rather than attempting to label all co-mingled corn products.
INSECT RESISTANCE MANAGEMENT (IRM)
One of the most widely used and successful products of biotechnology is ''Bt corn'' or corn that contains a protein from the bacterium Bacillus thuringiensis. This naturally occurring soil insecticide is toxic to the corn borer family of insects, which cause an estimated $1 billion dollars worth of damage to the U.S. corn crop each year. Incorporating the Bt gene into corn seed controls the corn borer without application of chemical pesticides that might also harm beneficial insects. It also means that I can make fewer passes through my fields, reducing my use of fossil fuel. As a corn grower, I can assure you that I want to protect this environmentally friendly technology for as long as possible.
Page 149 PREV PAGE TOP OF DOC This new technology has yielded tremendous benefits for farmers, but it has also raised concerns about insects becoming resistant to the Bt gene. Several different types of Bt corn have been developed and are being sold by various seed companies. But the competitive tactics of these companies have resulted in corn grower confusion about how best to prevent insect resistance. Farmers have received conflicting messages about issues such as the size of refuges, which are the areas that need to be planted with non-Bt corn in order to prevent resistance.
Recognizing that farmers must have a consistent, uniform plan for managing Bt-enhanced hybrids in their operations, NCGA urged the seed companies to come together and agree on a single, workable insect resistance management (or IRM) plan. As a result, the companies producing the majority of Bt corn recently reached an agreement-in-principle on key points necessary to move forward with a unified IRM plan. They include:
practical, scientifically sound refuge requirements;
clear and consistent grower IRM agreements;
effective grower education programs;
appropriate surveys to track grower adoption; and
continued monitoring of insect susceptibility.
We believe that the plan will address the interests of corn growers, consumers and regulators by providing a practical program, consistent across the industry, formed by listening to the views of all stakeholders. These actions will ensure environmental stewardship and Bt product integrity for years to come.
I have laid out for you three of corn growers' current priorities in biotechnology: genomic research, the trade implications of biotech products, and insect resistance management strategies.
As we look to develop future policies governing biotechnology, we will have to address a number of key issues, including:
Page 150 PREV PAGE TOP OF DOC the potential impacts of the industry consolidation that is being spurred by biotechnology;
the regulatory aspects of grain handling and inspection;
contracts and alliances between growers and industry;
infrastructure needs for handling, processing and transporting genetically enhanced grain;
unique risk management concerns raised by biotech grain, including crop insurance products and price discovery; and
most importantly, consumer acceptance of the final products that result from biotechnology.
Real challenges lie ahead of us as we work to address these concerns. We need to work together to realize the societal and environmental benefits of biotechnology, and we need to ensure that the additional value resulting from biotechnology is shared throughout the value chainby industry, farmers and consumers alike.
I appreciate the opportunity to present the views of the National Corn Growers Associationespecially given how important biotechnology is to all of us. I would be happy to answer any questions.
Statement of James E. Thornton
Mr. Chairman, and other members of the subcommittee. Thank you for the opportunity to share my views with you about the importance of biotechnology in the fields of food and agriculture and the part that smaller biotech companies can and do play in that regard.
Demegen Inc. is a small publicly traded company, based in Pittsburgh, PA, whose business entails the discovery and design of special molecules to combat plant and animal diseases (including human diseases), as well as new proteins to enhance the nutritional content of food and feed crops. The disease-resistance technology I refer to also has broad anti-microbial potential in the industrial field. When expressed in plants in the form of gene inserts, these disease-resistance molecules provide enhanced protection against a broad range of bacterial and fungal pathogens. This protection trait is passed on to subsequent generations of the plant through its seed. Importantly, it means that fungicides and other chemicals normally required to protect these plants against such diseases can be greatly reduced, if not eliminated altogether, thereby reducing environmental and other safety risks that might otherwise may be associated with their use.
Page 151 PREV PAGE TOP OF DOCAlthough Demegen bio-materials have been successfully tested against a wide range of human bacterial, fungal, viral, protozoal pathogens, including various forms of cancer, Demegen is focusing its current efforts against prostate cancer, a killer of almost 40,000 men a year in the United States alone.
What is important to understand about our company is that its ''technology-base'' was created by the work of one scientist, Dr. Jesse M. Jaynes who helped found the company in 1992. Dr. Jaynes served as a professor at Louisiana State University prior to this time. Since its establishment almost seven years ago, over fifty (50) collaborative projects have been undertaken involving scientists and institutions outside Demegen to help prove the effectiveness of its technologies. Included among these collaborative partners were many universities and agencies of U.S. and foreign governments such as U.S. Department of Agriculture, the National Institutes of Health, the Canadian Forest Service and other private companies. Demegen also has benefited from the support of the Pacific West Cancer Fund and several SBIR (Small Business Innovation Research Program) grants to further its discovery and development efforts. Demegen would not likely be here today had it not been for the availability and support of these other institutions and small business funding sources. Within the past year and a half Demegen has been able to license its plant disease resistance and nutrition enhancement technologies to Dow AgroSciences with whom it is now working closely regarding the application of these technologies to major food, feed and fiber crops throughout the world.
Demegen's nutrition enhancement technology represents a significant contribution and advancement toward improving the ''qualitative'' aspects of food and feed crops. Traditionally, crop research and development has emphasized ''increased yield'' as the primary objective in creating new crop varieties. The success of that approach can be seen today around the world. How much longer we can rely upon that approach, however, to meet continued expansion in world food and fiber demand is anybody's guess. Fewer and fewer acres of cultivable land are available each year. Water supplies for crop irrigation purposes are decreasing. On the other hand, global population continues to expand, per capita income in poorer countries is beginning to rise thereby further increasing demand for animal protein, and its attendant demand for feed grains. As all of these forces continue to mount, increased demand and competition on available world food and feed supplies will also increase. And there is one dimension to all of this that often is overlooked. As we learned so dramatically in the early 1970's when world market demand exceeded available supply by as little as few percent, price and cost pressures were set into motion that had both immediate and long-term impacts. Lack of foreign exchange by poorer nations meant substantial cuts in needed food and feed grain imports. Resulting higher feed grain costs forced poultry, swine and cattle producers to substantially reduce the size of their animal numbers. And while consumers benefited somewhat in the short-term by such liquidations, in the longer-term their grocery bills will likely rise significantly. Following the 1973 draw-down of our nation's grain supply due to sales to Russia, I estimated that $53 billion was added to U.S. consumer's grocery bill in the immediate years that followed. I mention this only to illustrate how such changes in world grain supplies can impact both world and U.S. economies. Although such impacts may cause those of us in more affluent nations to suffer the inconvenience of some individual food product shortages or higher prices at the grocery store, it can quickly translate into death and severe malnutrition elsewhere in the world.
Page 152 PREV PAGE TOP OF DOC The agricultural science community, and those who support their work, (which I know includes this committee and others) have made tremendous contributions toward addressing these global concerns as a result of the development and application of this new science-based technology we now generally refer to as ''biotechnology''. The new methods employed by this technology, along with the need to acquire access to prime ''germplasm'', already have had a tremendous impact on the structure and nature of the world's agricultural chemical and seed industries. It has been a driving force behind the many mergers, acquisitions and consolidations that have taken place in these particular industries this past decade. Although most of the enabling and other related technologies that comprise what we call ''biotechnology'' today were actually created, discovered or developed by individuals and by small companies, most of those technologies are now in the hands of very large companies, some of whom are represented here before you today. Let me hasten to add, I do not mean to suggest that this transfer of technology ownership is bad. However, government must be sensitive to the fact that highly innovative technologies in the future will continue to largely come from individuals and small businesses, and not from large companies. Large companies will continue to acquire, enhance and help insure the wide-spread use of such technologies once they are introduced, but seldom, in my judgement, are they likely to be our best creators and incubators of truly new and innovative technologies. Another factor to consider are events (including regulatory events) that force smaller companies or individuals to sell or license-off their technologies or inventions prematurely or before their true value can be established or assessed in the marketplace. Therefore, I urge you to stand firm against any government action (be it regulatory, national or international) that makes it more difficult, or may act as a ''disincentive'' for these smaller innovators and creators of new technologies, to make the products of their genius available to this nation and to the world.
I also urge you to stand firm against the ''nay-sayers'' and extremist groups who want us to substitute ''pseudo-science'' for real science in making important public policy decisions about these new technologies. I include in my concerns the U.S. Environmental Protection Agency's (EPA) pending new regulations giving that agency expanded jurisdiction over transgenic plant events. EPA, in my judgement, has neither the right nor the competence to regulate transgenic plant development. I view their intrusion into this field as a mere grab for regulatory control of a new emerging technology. EPA's proposal to classify any genetically modified plant using recombinant DNA methods as containing a ''plant pesticide'' is most revealing, in that without such classification, I do not believe they could justify their entry into this field of government regulation under their existing authorizing statues.
Page 153 PREV PAGE TOP OF DOC Regulations and oversight currently provided by USDA and FDA regarding the use and application of this new technological method of modifying plants provide adequate protection for the public. The U.S. Department of Agriculture, working in cooperation with the agricultural science community has been providing oversight for new plant development almost since it was first established. Adding another layer of Federal regulation will add little to providing us with safer food products or improved environments. It will, however, add further costs, time delays and discourage scientific development. It also will ''scare the hell out of public'', world-wide. Who would want to eat a food product that carries a label telling you that it contains a ''plant pesticide''? It would be like placing a ''skull & bones'' on the label! Also, can you imagine what the anti-biotech activists of the world will do with this?
EPA's proposed regulations are not ''science-based''. On the one hand, they propose not to include transgenic plant events achieved by ''traditional breeding methods'' while on the other, to include those achieved utilizing new recombinant or DNA biotech methods. Their proposed regulations also seem to assume that all parties using biotech methods to develop new transgenic plant cultivars have ''deep pockets''. The costs to comply with these new regulations will likely be prohibitive for smaller companies. Even larger companies, such as those involved in vegetable seed development, will likely be faced with huge accumulative registration costs in that they often register hundreds of new cultivars each year. If the EPA is permitted to expand its regulatory role in this area, the fifty states will likely follow with another regulatory layer as well. And, in a similar vain, other nations of the world will likely follow the ''regulatory-lead'' of the United States Government in this regard.
A coalition of major scientific societies representing more than 80,000 agricultural and food scientists have challenged the EPA's proposed rule making as essentially non-science based and unnecessary. The Council of Agriculture Science and Technology (CAST), of which I am a member, serves as an umbrella organization for many of these same scientific societies. It too has issued a report challenging the EPA's proposed rule making.
Page 154 PREV PAGE TOP OF DOC The benefits that biotechnology has in store for the agricultural community and consumers can and will be far-reaching. To name only a few: it can bring cost savings to farm producers by lowering their input costs to control insects and plant diseases; it also can help them obtain premiums at the point of first-sale for crops with improved oil, protein content or other improved traits; it can help minimize environmental risks by lowering the need for agricultural chemical applications; it can help animal producers lower feed costs and improve feed quality by obtaining needed nutrients and energy components directly from crop-based, not animal-based materials; it also can help animal producers control many animal diseases by minimizing if not eventually eliminating the reliance on antibiotics (a goal with important safe-guards for the public as well); and, it can help consumers by making future food products safer, more nutritious, longer-lasting and hopefully, less costly. Furthermore, it can provide consumers with nutritionally improved, lower-fat diets, to achieve longer, more healthy productive lives.
And for the world, with its diminishing agricultural-base in relation to continued population expansion, biotechnology can make truly major contributions. It can increase the world's food supply by reducing crop losses due to insect damage and disease and can bring about major increases in the nutritional quality and quantity content to the world's basic food and feed crops, so much so, that both people and food animals may be able to benefit more, by eating less.
The United States today is the world's leader in agricultural biotechnology. And it clearly can continue that leadership if it is careful to insure that public policy decisions regarding its use, safety and application are ''science-based''. There are forces at work both here in the United States and in the world today that are challenging the use and application of this technology, not based on ''science'', but rather based on emotion, misunderstanding, lack of knowledge, fear, financial gain, non-tariff trade barrier objectives, and a desire for expanded regulatory control. There will always be those in the world that will want to benefit from such factors. The Congress, along with other appropriate government officials, members of the science community and those of us in the private sector who know both the benefits and limits of this new technology, must all work together toward providing greater understanding and knowledge to the public about what these technologies entail. We must be scrupulously honest and truly responsive to public concerns about safety. However, in doing so we must be careful not to ''over-sell'', ''over-promise'' or ''underestimate'' the full impacts that such technologies can have upon us as individuals as well as impacts worldwide. Science is taking us ever deeper into the molecular and subatomic realm of the secrets of life, with all of its accompanying complexities and uncertainties. Some may say ''why'', while others may say ''why not''. How we as a nation deal with the many issues associated with this question will very likely set the stage for how others in the world do so. And time is not on our side. The international community is expressing mixed messages, tending to line-up once again as ''developed'' versus ''developing nation'', and ''have'' versus ''have-not'', ''environmentalist'' versus ''industry,'' ''scientist'' versus ''consumer''.
Page 155 PREV PAGE TOP OF DOC In the United States we are fortunate in that our citizens tend to trust scientists, the scientific method and the government agencies that are responsible for public safety. In other parts of the world this often is not the case. Elsewhere, activists with political agendas of their own, invoke nonscientific arguments and ''pseudo-science'' sources to further their causes. Unfortunately, some governments are sufficiently intimidated by such groups that they cater to them even to the point of adopting public policies and regulations that can be extremely harmful to the long-term interests of their nation and citizens. We must not let that happen in this country. And neither should we let other nations of the world intimidate us into limiting our scientific progress by their imposing import restrictions, unnecessary product labeling and the like. Biotechnology is here to stay. Bio-engineered crops are a reality, already being grown on millions of U.S. and foreign acres of land. Food products incorporating recombinant DNA components already are on the grocery shelves and tables of American consumers and others throughout the worldand with no known adverse effects on human health. The benefits of the new technologies that generally fall under the term ''biotechnology'' are enormous. The contributions biotechnology will make in improving and extending our lives are too great to turn our back on it because it also entails ''risks''. Tell some person who is dying of AIDS, cancer or some other deadly disease that we should not go forward with the promise of this technology because it involves risks. Tell those who are concerned about the need to reduce environmental risks that we not pursue the benefits of this technology because we do not know everything we would like to know about its risks.
To conclude, Mr. Chairman, I commend you for holding this public hearing on this subject. I encourage you to hold as many of these hearings as may be required to help Members of Congress and the public at large to better understand what this technology entails, its benefits, its risks and the requirements for it to flourish and develop. I also hope you will include in these hearings an examination of intellectual property issues that affect this technology. ''Freedom-to-operate'' is an issue you will likely hear more about as you explore the application of this technology in the plant world. The availability of the enabling technologies to the agricultural research community that are an integral part of recombinant plant technology is of serious and far-reaching concern.
Page 156 PREV PAGE TOP OF DOCAs I mentioned earlier, I hope you and your colleagues here in the Congress, will always be sensitive to the important role that smaller companies and individuals play regarding the invention and introduction of new innovative technologies. Our nation leads the world today in computer technology, biotechnology and many other technologies due to the efforts of such individuals and smaller enterprises. Our experience and relationships with USDA and NIH these past few years have been most helpful. The USDA CRADA (Cooperative Research & Development Agreement) process has been particularly very ''small-company friendly''.
To unnecessarily limit development of this new technology could ultimately deny us the enormous potential benefits I have previously mentioned. Our economy has been successful in part because of the incentives offered to those individuals and companies that have created new technologies. We should continue to encourage innovation and bio-technical solutions directed toward helping avoid worldwide famine. Burdensome over-regulation by national, state and international authorities can be lethal to small enterprises, especially those engaged in plant development that often can require from two to as high as eight years (even using modern biotech methods) to complete. Additional and unnecessary regulatory layers on this industry and field of science would likely have a devastating impact for the smaller companies and individual research efforts that are an integral part of it. I trust you will do all that you can to see that does not happen.
Should you or other members of the subcommittee have any questions, I will be happy to respond as best I can. Thank you.
Statement of Mike Yost
Good morning, Mr. Chairman and Members of the subcommittee. I am Mike Yost, a soybean and corn farmer from Murdock, Minnesota. I currently serve as President of the American Soybean Association. ASA represents 32,000 producer members on national issues of importance to all U.S. soybean farmers. We appreciate the opportunity to appear before you on the status and outlook for agricultural biotechnology.
Page 157 PREV PAGE TOP OF DOC In the three years since commercial introduction of genetically modified crops in 1996, agricultural biotechnology has become the defining issue in how the world will feed itself in the next century, and whether this decision will be based on scientific evidence. At stake in this debate are global markets developed for 50 years by U.S. farmers, whose livelihoods now depend on maintaining access to them. Also at stake is the viability of the basic rules of international trade, which are guided by science-based determinations. For U.S. soybean farmers, and for producers of other biotech crops, these stakes couldn't be higher.
Biotechnology, in brief, will drive the reinvention of the U.S. agricultural production and marketing system in a relatively short period of years. In the case of soybeans, acreage planted to glyphosate-tolerant varieties could reach 40 million acresover one-half of expected production in 1999. While other varieties with agronomic characteristics are moving toward commercialization, we also saw introduction in 1998 of the first biotech soybean with a value-added traitin this case, a high oleic oil profile.
As varieties with quality differences are brought forward in the future, our production, processing, and transportation infrastructure will need to accommodate the need to identity preserve them. We are already seeing an increase in sole-source grower contracting, not only for planting seed and delivery terms, but for fertilizer and crop protection product purchases.
From the perspective of the individual producer, however, the arrival of agricultural biotechnology is an unqualified triumph of modern science. Varieties already available are reducing farm input costs and, in some cases, improving yields. The beauty of the system is that, to be accepted by farmers, a biotech variety must either reduce production costs or increase crop value by more than its increase in cost over conventional varieties. The only concern, other than the ''saved seed'' issue, is whether planting seed for the conventional varieties will continue to be available in future years.
Page 158 PREV PAGE TOP OF DOC These benefits are equally clear to producers in other countries. Farmers in Canada, Argentina and Australia have avidly accepted biotech soybean, corn and cotton varieties. In other countries, however, including in Europe as well as the developing world, grower enthusiasm has taken a back seat to the concerns of consumers and environmentalists.
Following approval in the European Union of the first biotech soybean and corn varieties in 1996, we have seen a backlash against efforts to gain approval of additional varieties. This reaction has been fanned by activist groups, who have convinced nervous food manufacturers, retailers, and EU consumers that they should have the right to know whether food products include ingredients from biotech crops, and the right to choose alternative products that do not. This activity has led to a prolonged debate over whether and how to label products containing GMOs, or ''Genetically Modified Organisms,'' and whether GMO crops could be segregated from traditional varieties. Activist groups are also leading efforts to discredit biotech crops entierely, and have urged bans on imports as well as moratoriums on further approvals.
As these questions have lingered in the EU, similar concerns have been raised in other countries, including Japan. And as food manufacturers in the EU and other markets seek sources of non-GMO varieties, major U.S. competitors such as Brazil have moved to supply ''non-GMO'' soybeans, and have efforts underway to block the introduction of biotech soybeans in their next crop.
Some opponents of agricultural biotechnology have been encouraged by their success in stalling approvals in the EU and Japan, and are trying to use the negotiations of a Biosafety Protocol under the U.N. Convention on Biodiversity as a means to restrict future trade in GMO crops and products derived from them. They would also introduce concern about the possible health effects of a biotech crop or productthe so-called ''Precautionary Principle,'' as a legitimate reason for refusing imports. This criterion would totally undercut scientific principles, past scientific reviews, and the world trading system.
Page 159 PREV PAGE TOP OF DOC The fact that the collapse of the Biosafety Protocol talks in Columbia last month was seen as the best possible outcome for the United States gives some idea of the odds against biotech in the world community. The U.S. position was supported by only five other countries, compared to over 110 which wanted a restrictive Protocol.
Nor do the risks end here. The organization officially designated under the Uruguay Round Agreement to examine standards, safety, and labeling issues, the Codex Alimentarius Commission, will meet in June to establish a committee to design rules governing biotech products. Depending on the composition and leadership of this committee, the United States and its allies may once again be fighting to prevent decisions that would again subject trade in biotech crops and products to fear-driven concerns rather than the current Codex standards, which are based on scientific determinations.
Finally, we have the next round of multilateral trade negotiations, scheduled to start in Seattle in late November. ASA and other front-line producer and processor organizations have been developing a strategy to include harmonization of regulations governing trade in agricultural biotech crops and products as a priority in the next WTO round. We have been joined in this effort by the Agricultural Biotechnology Forum, and we have received strong support from the administration and from many in Congress.
Our success in initiating a meaningful international dialog on this issue will depend, however, on where things stand later this year with approval of GMO varieties in the EU and Japan, the status of the Biosafety Protocol talks, and how the Codex Commission decides to set up its committee to deal with biotech foods. Having no idea of how this all may work out, we can only remain engaged on every front and hope for progress.
Due to the need for new biotech soybeans to receive clearances not only in the United States but also in key export markets, ASA has asked biotech companies not to introduce biotech soybean varieties for commercial production in the United States until they receive approval for importation into the EU and other major markets. Until such clearances are obtained, we have insisted that companies develop and implement an effective identity preservation program to keep unapproved varieties our of export channels. U.S. soybean producers depend on foreign markets for 50 percent of their production, in the form of soybeans, soyoil or meal, or livestock products. We simply cannot afford to jeopardize these markets. So while we fully support this new technology, our acceptance of new varieties must be tempered by recognition that the realities in the EU and elsewhere, at least for now, are very much different than our own.
Page 160 PREV PAGE TOP OF DOC In summary, Mr. Chairman, ASA believes there are eight areas where action is needed to prevent escalating disruption of U.S. exports of soybeans and other crops:
The EU needs to adopt a much more transparent and efficient process for approving new biotech varieties.
The administration needs to engage the EU in an effort to reach agreement to recognize each other's procedures for approving and commercializing biotech crops and products.
The United States must ensure that rules to be written by the Codex Alimentarius Commission governing biotech labeling and trade are science-based.
Rules governing biotech trade need to be included in the next WTO round. WTO rules must superceded the rules of any other international treaty or agreement.
The EU and other countries must accept that there is no scientific basis for requiring segregation or labeling of biotech varieties that have been determined to be substantially equivalent to conventional varieties in terms of safety, nutrition, and composition.
Biotech crops or ''commodities'' that are to be used for feed or food rather than seed production must continue to be excluded from any Biosafety Protocol.
Biotech and seed companies must seek and obtain clearances for new varieties in both the United States and in major export markets, before these varieties are commercialized in the United States.
Governments, food companies and retailers, biotech and seed companies, scientists, and producers must help inform consumers that biotechnology is a tool that will enable us feed a burgeoning world population in a more environmentally friendly manner.
Statement of L. Val Giddings
I would like to thank the chairman for inviting me to appear today before the subcommittee. I am here on behalf of the Biotechnology Industry Organization (BIO) whose members are employing modern techniques of biotechnology to improve American agriculture.
Page 161 PREV PAGE TOP OF DOC The first thing I would like to do today is to thank the Members of this committee, and the full membership of the U.S. Congress, as well as the administration, for all your support and hard work on behalf of the U.S. biotechnology industry, especially in relation to our ongoing trade difficulties with the European Union. At the moment it looks as if we will continue for a while to have some rough spots to negotiate on the road ahead, and we look forward to continuing to work with you and the administration to smooth our passage together through them.
The efforts of BIO's member companies to apply biotechnology to produce new products to benefit consumers, farmers, and the environment are no longer a dream but a reality. This past growing season farmers across America planted over 60 million acres with genetically engineered corn, cotton, soybeans, tomatoes, potatoes, and canola.
These efforts are the culmination of 20 years of research following the creation of the first genetically transformed plants containing foreign DNA. This ability to molecular engineer major crop plants delineated a promise for a new revolution in American agriculture. Tremendous strides had been made in plant breeding during the decades preceding the discovery of recombinant DNA technology, yet the ability to add new traits to crops was still time consuming since only blocks of compatible genetic material could be transferred rather than a specific gene or genes. Often extensive backcrossings were required to delete undesirable traits. Clearly recombinant DNA could overcome many of the obstacles that the plant breeders faced.
Just as hand pollination allowed the breeder to directly modify the plant genome, this new biotechnology represents another step along the continuum. However, rather than making a wide genetic cross where numerous uncharacterized genes (as many as 50,000 at once!) are carried forward into the plant's progeny, plant breeders using biotechnology can rationally add one or a few selected and well-characterized traits. The new biotechnology allows the selection of traits with precision, shortens the crop development cycle, and will lead to the continual introduction of safe new varieties into commerce.
Page 162 PREV PAGE TOP OF DOC There is also the growing pressure to feed an ever-increasing world population from a limited amount of land. Clearly advances in high yield agriculture offer the solution and biotechnology is part of this. As many have noted, conversion of natural areas into farmland is the major impact of humans on natural environment and poses a great threat to biodiversity. We know from our own experience in this country that agriculture has profound environmental effects. Our ancestors cut down virgin stands of timber to clear land for farms and cities. They plowed under the vast grasslands of the Midwest to grow wheat, corn, soybeans, and other crops. Rivers were dammed and swamps drained so that lands normally unsuitable for agriculture could be used for growing cotton, citrus, as well as the vegetables that grace grocery stores in winter. We have learned to carry out agricultural activities in a manner that minimizes adverse environmental impacts.
We are beginning to see how biotechnology can be used in a manner to improve environmental conditions. Biotechnology is used to strengthen a crop's own ability to defend itself against destructive insects, reducing and sometimes eliminating the need for chemical pesticides. The plants are given the genetic ability to produce a proteintoxic to certain insectsthat is found in a common soil bacterium called Bacillus thuringiensis, or Bt.
Organic farmers and home gardeners often use sprays containing Bt proteins to control insects because it is easy and very safe; such sprays target specific insects and nothing else. The Bt containing crops go one step better than topical sprays by producing the protein inside the plant's interior stalk and root tissues where the larval or wormlike pests bore in and start eating. The healthier plants result in higher yields and improved fertilizer efficiency.
Crops commercially grown today with Bt insect protection include corn, cotton and potatoes, and will soon include sunflower, canola, wheat and tomatoes. In the future, consumers will plant lawns with Bt turfgrass protected against grubs.
Page 163 PREV PAGE TOP OF DOC Crops that are genetically modified to withstand applications of herbicides give farmers greater flexibility in their pest control strategy, allow them to use weed controls more selectively and to use environmentally gentler herbicides. Rather than making preventive sprays, farmers can wait into the growing season, after the herbicide tolerant crop emerges, to see where weed pressures develop before spraying. This allows precise and minimal applications of weed control measures.
The farmer uses safer controls, reducing environmental impacts, and sprays less often, reducing the farmer's production costs. On both counts, farmer satisfaction increases, especially as superior weed control also increases productivity per acre. Soybean, cotton, corn and canola have herbicide-tolerant varieties. Wheat, rice and sugar beet are in development.
Reducing nutrients in farm runoff, increasing crops' fertilizer efficiency and conserving topsoil are ways that biotechnology helps protect water quality. Low phytic acid corn and phytase feed enzymes improve the ability of livestock to digest and absorb phosphates in feed grain, and reduce potentially harmful phosphorus in farm animal waste. Reduced insect damage in Bt crops means healthier plants use fertilizer more efficiently, reducing excess soil nutrients and contamination of irrigation runoff. And herbicide tolerant crops promote conservation tillage, preserving topsoil and even reducing greenhouse gas effects by keeping carbon ''sequestered'' in soil.
Plant diseases caused by viruses exact a devastating toll on food production, especially in developing regions of the world that can least afford the losses. Biotechnology arms disease-protected varieties with the plant equivalent of a ''vaccine.'' Crops with disease protection include sweet potato and cassava, critical staple crops in Africa, as well as rice and corn.
Soon new banana varieties resistant to Black Sigatoka will reduce the need for chemical controls, improve production agronomics and increase the quality of bananasAmerica's favorite fruit, especially among kids!
Page 164 PREV PAGE TOP OF DOC development of new crop varieties must and is being carried out in a responsible manner. It has always been BIO's goal to ensure that the products are developed in accordance with a rational science-based safety evaluation framework.
It is important to note that prior to the introduction of new food crops that the public had already been exposed to biotechnology derived food products. Processing enzymes derived from genetically modified microorganisms have been used for several years. Recombinant chymosin is used in the production of over two thirds of cheese sold to American consumers. The enzymes used in corn refining are all derived through biotechnology processes. Will this same acceptance translate to the plant biotechnology arena? We believe the answer to this question is yes.
The ability biotechnology gives us to overcome previously insurmountable barriers to crop improvement using genetic material from a wide variety of sources that can now be placed into traditional food crops has raised interest from the general public. The public is interested not only in the agronomic and consumer benefits of plant biotechnology, but also, and perhaps more centrally the conduct of the safety assessment of these new plant varieties.
The environmental and food safety of biotechnology enhanced varieties are ensured through numerous reviews conducted by both government regulatory agencies and developers. Environmental safety assessments are carried out primarily by USDA/APHIS, working jointly with EPA under NEPA. In one of the most important keys to public confidence in the regulatory system here in the United States, the results of these analyses are publicly available both through web page postings and hard copies delivered by snail mail to anyone who requests them from anywhere in the world. While this system has been enormously successful to date, funding difficulties at APHIS' biotechnology unit presently jeopardise its ability to continue these essential guarantees of safety, quality, and public assurance for the future.
With regard to food safety, as the early developments in plant biotechnology were taking place, industry scientists started an effort to examine whether or not existing standards for assessing food safety were applicable to these new products. The International Food Biotechnology Council (IFBC), formed in February 1988, brought together leading biotechnology and food processing companies. Experts in food safety, toxicology, plant breeding, microbiology, molecular biology, food law, biochemistry, and analytical chemistry examined both traditional plant breeding and newer biotechnology techniques. A full report, peer-reviewed by leading university and industry scientists, was published in December of 1990.
Page 165 PREV PAGE TOP OF DOC A second report was published addressing issues related to the assessment of food allergenicity in new crop varieties, a point not covered in the first report. Together, these two reports established a framework for safety assessment for biotechnology-derived food products that can be used by developers of new crop varieties. They provide developers with a rational scientific basis for evaluating food safety that is fully consistent with the approach set forth by the Food and Drug Administration in 1992.
Although the scientific issues regarding the food safety of new crop varieties are addressed by the developers, there continue to be calls for special labeling of these products. In particular, we are troubled by ongoing efforts within Europe to have bulk commodity grains labeled. As a result, the cultivation at large scale of herbicide tolerant soybeans and Bt corn have caused some difficulties in international trade. Most agricultural commodities are not segregated, provided they meet agreed quality criteria. Number two yellow corn can originate from any one of the hundreds of varieties of hybrid corn grown around the world. It is stored in numerous grain elevators from where it enters commerce. Some is shipped overseas. The remainder moves in a myriad of directions. Some is formulated into animal feed. Some is fermented for industrial use. Processed derivatives of corn (starch, oil, meal, etc.) can be found in hundreds of grocery products.
The instances where crops are segregated are rare. In such cases the farmer commands a premium price for growing the variety. It is the usual custom for such varieties to be grown under contract between the farmer and the distributor/processor.
If, as a result of routine labeling, biotechnology products would have to be segregated at every stage in the agricultural and food supply chain, the cost of the food product would be prohibitive and such segregation would be a major disincentive for farmers, shippers, grain processors and food processors to grow or utilize the newer variety. For most food products, segregation from farm to grocery store would be impracticable and expensive. BIO does not believe that it is feasible to impose a blanket requirement for the labeling of ''genetically engineered'' foods.
Page 166 PREV PAGE TOP OF DOC The premise behind this request is that biotechnology manipulations will always and necessarily lead to material changes in food. This is contradicted by the science underlying biotechnology. The introduction of a small number of new genes (usually less than six) usually does not markedly change the phenotype or appearance of the crop plant. This experience has been acquired through centuries of observation of new hybrid crops generated from traditional plant breeding. The existing evaluation system is sufficient to address those occasions where material changes do occur.
Many new varieties are developed and introduced in trade each year; these may be either hybrid or non-hybrid varieties and all are distinct from one another. When introduced into commerce, common names for the food are used. Compositional or any descriptive labeling of the process by which the new variety was derived is not required.
There will, however, be cases where labeling will be appropriate and perhaps required. Two such cases would be a change in standard identity or disclosure of pertinent safety information.
(1) Standard Identity Criteria. Plant breeders have developed new varieties of fruits and vegetables that differed markedly from their parental origins. In these cases the old varietal names were not applicable and a new name was given to the product (tangelo, nectarine, and brocco-flower are but a few examples). This would be no different for biotechnology products. Current products under development appear to be no different from the parental varieties and would retain the parental
Identity. Thus, where a new plant variety does not differ significantly in composition from the traditional variety, the parental name will be retained. However, where a new plant variety does differ significantly in composition for that food, labeling to disclose that fact is appropriate and, in fact, required by existing law.
(2) Safety. Safety labeling is prevalent for food additives if there is any concern about consumption of the additive (e.g. sulfites, aspartame). There may be some instances when the presence of a new substance resulting from the insertion of new genetic material may pose a food safety concern. At present, it appears that this may be limited to transfer of genetic material from a known food allergen (e.g. peanuts) to a new crop variety. FDA has indicated that labeling may be mandatory unless the developer can conclusively show that the new biotechnology-derived product is not allergenic.
Page 167 PREV PAGE TOP OF DOC We have observed in the United States no instances where labeling of the current group of biotechnology-derived crops is required or justified on the basis of rigorous science. However, this issue continues to be a major trade issue with Europe. Given the present agricultural infastructure, resolution of this trade issue is paramount. American farmers have embraced the benefits that these new crop varieties offer. If a trade impasse should arise, complete enjoyment of the many benefits of biotechnology would no doubt be delayed.
"The Official Committee record contains additional material here."
Statement of Delta and Pine Land Co.
Dear subcommittee members:
We wanted to take this opportunity to tell you a little bit about our company and the role biotechnology has played in helping our customers. Delta and Pine Land Company, based in Scott, MS is a large commercial breeder, producer and marketer of cotton planting seed, and also maintains a program for development and sale of soybeans for the southern United States.
D&PL was founded in 1911 in the heart of the Mississippi delta and the U.S. Cotton Belt, and the company headquarters remains there today. The commercial success of the company is based upon dedication to research, continued improvements in proprietary techniques for processing of seed and commitment to quality using the most advanced testing methods for quality assurance. Since 1915, the company has used its classical breeding program drawing from a diverse germplasm base to develop varieties of cotton with improved traits important to farmers and to textile manufacturers. Our principal research stations are spread across the southern United StatesHartsville, SC; Scott and Leland, MS; Stuttgart, AR; Hale Center and Lubbock, TX; Casa Grande and Maricopa, AZwhile winter nursery programs in Costa Rica, Argentina and South Africa are used to speed up the breeding and commercialization process.
Page 168 PREV PAGE TOP OF DOC D&PL conducts breeding programs in the different types of cotton produced in the United StatesPima, extra long staple cotton grown in the West, stripper cotton grown primarily on the High Plains of Texas, as well as upland cottons for the South and Southeast. In soybeans, the company focuses on varieties adaptable to cotton growing areas. Soybean production and processing is located in our Arkansas plant.
D&PL entered the field of biotechnology in the early 1980's, exploring collaborations with agricultural technology companies. 1996 saw the commercial introduction of the first transgenic cotton seed, Deltapine NuCOTN with the Bollgard gene from Monsanto which imparts resistance to certain cotton pests. Varieties have been bred to tolerate particular herbicides (including the STS system from DuPont for soybeans and Roundup Ready system from Monsanto for both our crops). Customers have embraced these technologies because they often offer environmental benefits, risk management as well as improved yields.
In 1998, D&PL received a patent, issued jointly to the US Department of Agriculture, for a technology protection system (TPS) broadly applicable across crops. TPS will help further research and development efforts thereby benefiting our customers. This technology, which is still in development and is several years from commercial introduction, is explained in the attached paper.
Please feel free to contact us if you have any questions about D&PL, the cotton seed industry or the role of biotech in our business. Our phone number is (601) 7424500. Thanks for you time.
PROTECTING TECHNOLOGY AND ENCOURAGING DEVELOPMENT
The Technology Protection System (TPS) will insure North American farmers a more level playing field when competing in commodity production with farmers worldwide. North American farmers have been paying for advanced seed technologies for the past several years based upon the value of proven enhancements. Some of these advanced technologies have been pirated into other countries without payments by the farmers receiving the advantages of these traits, creating an uneven playing field.
Page 169 PREV PAGE TOP OF DOC TPS will also stimulate breeding and marketing efforts in countries which have not benefited from advances currently available in the developed world due to lack of protection of intellectual property. Critics of TPS say the technology will limit choices these farmers have. However, it will actually result in growers, particularly in less developed countries, having more options available to them, including high-yielding, disease-resistant and even transgenic varieties. We expect this new opportunity to present farmers in developing countries with the option of moving into production agriculture rather than their current subsistence farming.
BIOSAFETY REALIZED THROUGH TPS
Biosafety produced by TPS prevents the remote possibility of transgene movement. There has been some concern that biotech-derived genes might cross to wild relatives. This slight possibility should be prevented by TPS activated plants, as even the pollen, if it happens to pollinate flowers of a wild, related species, will render the seed produced non-viable. In addition, the non-viable seed produced on TPS plants will prevent the possibility of volunteer plants, a major pest problem where rotation is practiced.
UNDERSTANDING THE SYSTEM
TPS is a transgenic system comprised of a complex array of genes and gene promoters which, in the normal state, are inactive. This means the plant is normal and produces normal seeds which germinate when planted. Seeds carrying TPS produced for sale to the farmer will simply have a treatment applied prior to the sale of the seed which, at time of germination, will trigger an irreversible series of events rendering the seed produced on farmers' plants non-viable for replanting. It's important to note that
TPS, like hybridization, will have no effect on the seed product whether for feed, oil, fiber or other uses.
OTHER GERMPLASM PROTECTION
Page 170 PREV PAGE TOP OF DOC While TPS is a first in biotechnology-based germplasm protection systems, there are other means of protecting genetic breakthroughs. The most common type of protection system is hybrid seed production. Although primarily a system for increased yield via hybrid vigor, it is also a protection system. Hybrids are seen in many cross-pollinated crops such as corn, sorghum, sunflower and canola. Reduction in performance and changes from the parent seed leads to little saving of hybrid seed. Farmers, recognizing the value added from increased yields, are willing to buy new hybrid seed each year instead of saving and replanting seed from their previous crop. Their purchase of new seed each year insures quality and funds new research that leads to new and improved products.
On the other hand, few germplasm protection systems have been successfully implemented for self-pollinated species, such as cotton, soybeans, wheat and rice. The difficulty in producing hybrids, combined with costly implementation and poor product performance has kept companies from investing heavily in some of these crops.
FARMERS TO RECEIVE CHOICE AND BENEFITS
Farmers will continue to select those varieties which offer the highest returns and most benefits to the farmer. As is currently the case with transgenic varieties, farmers will be able to choose from TPS and non-TPS varieties. It is the expectation of both D&PL and the USDA-ARS that the benefits realized by planting TPS varieties, carrying advanced technology traits, will be significant. Many farmers will be likely to choose TPS varieties when given the opportunity.
TPS LIKELY TO INCREASE RESEARCH
TPS will be broadly available to both large and small seed firms. Because of this, it is anticipated that TPS will encourage increased breeding research in many crop species and geographic areas. Consequently, there should be sizable improvements in technology. Delta and Pine Land Company and the USDA-ARS believe that this is a distinct advantage to farmers because they will have better varieties and transgenics more widely available to them.
Page 171 PREV PAGE TOP OF DOC Genetic diversity in many important crops is a real concern of both private and public breeders today. There is no correlation between TPS and lack of genetic diversity. In fact, with the increased incentive for many private seed companies as well as universities to breed crops which have not received sufficient attention in the past, it is entirely possible that diversity will increase as breeders focus on providing unique and improved versions of germplasm to farmers.
TIMETABLE FOR DEVELOPMENT
Several years ago, a D&PL cotton breeder and researchers from the USDA-ARS generated the idea for a technology protection system during a casual meeting. With research beginning in 1993, it progressed over the next few years to move the concept to reality. In the spring of 1998, D&PL and the USDA were awarded a patent by the US government. The system is being developed further and we expect that it will be a few years before TPS transgenic varieties are commercialized. Though research is progressing well, there are no TPS plants, nor have there been any TPS plants of any species, growing in a field, anywhere in the world.
In the end, it is the farmers who will decide if the TPS and other new agricultural technologies have tangible benefits. Seed companies and technology providers are dependent on helping farmers be more successful. If a technology does not bring benefits and increased prosperity to our customers, then they will not purchase the technology. It is in everyone's interest that more choices be available to all of the world's farmers, and the TPS is a means of achieving this goal.
For Additional Information. Dr. Harry B. Collins, vice-president of Technology Transfer, leads the TPS effort for D&PL and is glad to discuss the TPS with media, seed and technology companies, as well as individuals. He can be reached at D&PL's headquarters in Scott, MS by calling (601) 7424533 (8 a.m. to 5 p.m. CST), faxing (601) 7423795 or e-mailing firstname.lastname@example.org.
Page 172 PREV PAGE TOP OF DOC
Statement of Jay Hardwick
Thank you Mr. Chairman. My name is Jay Hardwick and I own and operate a farming operation near Newellton, LA. I also provide farm management services to a number of operators in the surrounding area. I am appearing today on behalf of the National Cotton Council. The Council's members include producers, ginners, warehousemen, private and cooperative marketing firms, crushers and manufacturers.
I appreciate the opportunity to appear before the subcommittee to discuss the cotton industry's experience with and the outlook for biotech or genetically enhanced products. Since you recently visited Mr. Chambliss' and Mr. Hayes' districts, I know you are keenly aware of the serious economic conditions in the cotton belt and in virtually every farm community. So Mr. Chairman, before I address the topic of today's hearing, I couldn't return home to Louisiana and face my neighbors if I didn't ask you and your colleagues to develop a bipartisan package of legislation to assist farmers, ranchers and related businesses to survive conditions beyond their control and which were not contemplated when the 1996 farm bill was crafted. I have every confidence this committee, with its outstanding leaders, can meet these very challenging circumstances. And, thank you for your efforts last year-the economic and weather-related loss and the tax provisions of the omnibus spending bill were a tremendous help.
Mr. Chairman, today's topic is one of the potential bright spots in agriculture. I say potential, because there are challenges -including cost and availability of the technology, management on the farm and marketing the products. The cotton industry has readily embraced biotechnology in fact nearly 60%of the acreage planted to cotton in 1999 will be genetically enhanced varieties. The insect and herbicide resistant varieties have the potential to help us control escalating costs if they are reasonably priced and perform effectively. They also allow us to employ more efficient and environmentally friendly management techniques. We also look forward to new varieties which have enhanced fiber characteristics and seeds which yield more and better oil and meal products. This technology obviously is limited only by our imagination and our pocketbooks. Our challenge is to choose, manage and market it wisely.
Page 173 PREV PAGE TOP OF DOC The technology also brings challenges. There have been performance problems in some areas which need further investigation. The Council's leadership has initiated a series of meetings with registrants and suppliers to ensure there is meaningful dialogue concerning performance, pricing and other buyer-seller issues. Farmers need reliable information about management techniques and about the performance of seed varieties which carry the new genetics. We also believe it is important to maintain a business environment which fosters competition and facilitates the entry of new firms with new products to provide farmers plentiful choices. We believe it is important to analyze and understand how the emergence and adoption of the technology can affect various types and sizes of farming operations, and how traditional business relations between farmer, supplier, processor and consumer might be altered.
There are marketing opportunities and challenges. I know most people don't think of cotton as a food crop, but cotton seed provides about 17 percent of the value of the crop at the farmgate. And, we have a robust crushing sector, which converts seed to oil, meal and other products. Nearly 50 percent of annual cotton seed production goes to dairies and feed yards. So we, like our friends in the soybean and corn industries, need to be sure our customer understands the product. On the fiber side, our textile and apparel customers are asking for information about our production practices, so genetically enhanced fiber also has to be carefully introduced to the market so its performance and environmental benefits are well understood.
Mr. Chairman, we are very concerned about the rules regulating international trade in genetically enhanced commodities and their products. While we understand every country has sovereign rights to regulate its borders, we believe the U.S. must continue to press for science-based, transparent and timely procedures for establishing approval of these new products which have the potential to provide economic and environmental benefits. To that end, we have joined with the American Soybean Association and the National Corn Growers Association in retaining services of a highly qualified individual to assist us in developing and promoting a plan for harmonization of rules governing trade in genetically enhanced agriculture commodities and their products. Our focus is on the 1999 WTO round, but we will not ignore any appropriate forum to discuss this matter. We currently have products in the incredibly complex and time consuming European approval process. That experience has certainly reinforced our interest in a harmonized process.
Page 174 PREV PAGE TOP OF DOC We have also closely followed the recent Biosafety Protocol negotiations. We understand the interest in developing rules governing shipments of materials capable of reproducing, known as living modified organisms. However, the negotiations bordered on the absurd when proposals surfaced to require notification of shipments of denim because the fiber content included fiber from Bt seed. We hope the recess will be used by all parties to develop more realistic and reasonable proposals to address the concerns about shipments of LMOs.
And while we are focused on the benefits of these existing new products, we shouldn't view them as a complete substitute for conventional materials. The U.S. must maintain and develop new conventional varieties so we have a good mix of genetic materials available. We must also pay careful attention to the threat of resistance. This is our industry's fifth Bt crop and we are enhancing our education program to reinforce with the importance of refuge management. We believe current refuge rules for cotton are adequate because extensive monitoring gives us no reason to think otherwise. We believe new genetic materials, like stacked genes, will allow us to improve and diversify our resistance management techniques. While we were glad to see EPA approve Bt corn for planting in cotton counties to provide cropping flexibility, we are anxious that the agency not use this as an opportunity to change cotton's refuge requirements. Requirements which have proven adequate and enjoy high compliance rates.
Mr. Chairman, again, thank you for the opportunity to present our views. I hope I have contributed to the proceedings and have met your objectives. I know the Council wants to participate in future discussions about this important technology. I have attached
correspondence concerning OUT views on the biosafety protocol and a summary of OUT recommendations concerning a variety of issues too lengthy to cover in my oral statement.
I will be pleased to respond to any questions at the appropriate time.
1. Resistance managementcurrent refuge requirements for Bt cotton are adequate and have high compliance; any adjustments should be the product of science-based discussions involving the industry, EPA, USDA and qualified scientists. Any future regulations establishing refuge requirements for Bt corn in cotton counties should involve cotton industry representatives.
Page 175 PREV PAGE TOP OF DOC 2. International regulation of trade in genetically enhanced commodities and products should be harmonized, science-based and timely. U.S. government and industry representatives, while respecting national sovereignty, should strongly promote negotiations which will lead to reasonable regulations which, while sensitive to human health, are not unnecessarily trade distorting or discriminatory.
3. The U.S. should strongly resist efforts under the auspices of the biosafety protocol to expand the consent requirements to cover commercial shipments of genetically enhanced commodities and their products that do not contain living modified organisms.
4. The industry will continue to promote development of conventional varieties in order to preserve and expand the genetic pool of material available to breeders and farmers and we strongly urge support for preservation and utilization of basic cotton germplasm collections.
February 12, 1999
THE HONORABLE CHARLENE BARSHEFSKY
U.S. Trade Representative
600 17th Street, NW
Washington, DC 205084801
DEAR AMBASSADOR BARSHEFSKY:
We are writing to express our concerns about the negotiations for the Biosafety Protocol, which are expected to conclude this month in Cattagena, Colombia. The undersigned organizations represent farmers, cotton seed product processors, cotton exporters, textile manufacturers, and apparel manufacturers. Some of the proposals under consideration in the Protocol negotiations would impose trade restrictions on genetically modified cotton and products processed from genetically modified cotton. We urge you to use every means possible to ensure that U.S. exports of cotton fiber and cotton products (including textile and apparel products and all cotton seed products)are not adversely affected by the Protocol.
Page 176 PREV PAGE TOP OF DOC The issues most critical to our interests are: the definition of Living Modified Organism, the inclusion of processed products in the scope of the Protocol, the inclusion of bulk commodities in the scope of the Advance Informed Agreement procedure, and the Savings Clause.
Definition of LMO: We support a narrow definition of Living Modified Organism (LMO) that does not include processed products or products derived from breeding techniques that have been in commercial use for decades. If the definition of LMO is sufficiently broad that it brings products such as cotton seed oil, cotton seed meal, textiles and apparel under the scope of the Protocol, U.S. exports of these products, which are valued at $14 billion, could be severely impacted. Exports of these products pose no threat to biodiversity so there is no scientific justification for including them in the Protocol. Similarly, if the definition captures breeding techniques that have been used for decades in the cotton industry, all U.S. exports of cotton and cotton products could be affected.
Processed products: In our view, processed products should be completely excluded from the scope of the Protocol because they pose no threat to biodiversity. We urge you to oppose any attempts to include processed products in the scope of the AIA or to impose labeling requirements. Labeling issues are unrelated to biodiversity and should be left to appropriate fora such as the World Trade Organization and the Codex Alimentarius.
Scope of the AIA: The Advance Informed Agreement (AIA) procedure should not apply to shipments of agricultural commodities. Shipments of bulk and processed commodities do not pose significant health and safety or environmental risks. Existing international trade rules do not limit the right of any country to require that products containing living modified organisms meet scientifically based environmental protection, health, or safety requirements. However, burdensome procedures for notification and consent prior to shipment would allow countries to restrict imports without any scientifically valid justification.
Page 177 PREV PAGE TOP OF DOC Savings Clause: We fully support the U.S. efforts to include a clause in the Protocol to clarify that it does not override any other international agreements, particularly the WTO. The potential conflicts between the Protocol and the WTO are a very serious issue that could do great damage to the international trading system if not resolved.
We ask you to consider our concerns as you prepare for the final stage of the Biosafety Protocol negotiations. We understand the constraints the United States is working under as a non-Party to the Biodiversity Convention. However, we cannot afford to allow countries to erect unjustified barriers to trade in U.S. agricultural, textile and apparel products.
AMERICAN APPAREL MANUFACTURERS ASSOCIATION
AMERICAN COTTON SHIPPERS ASSOCIATION
AMERICAN TEXTILE MANUFACTURERS INSTITUTE
NATIONAL COTTON COUNCIL OF AMERICA
NATIONAL COTTON SEED PRODUCTS ASSOCIATION
Statement of Consortium for Plant Biotechnology Research
Mr. Chairman and Members of the Subcommittee, on behalf of the Consortium for Plant Biotechnology Research (CPBR) and the Corporate and University members that comprise CPBR, I submit this testimony for your consideration on the topic of agricultural biotechnology.
Founded in 1985, CPBR is a non-profit, tax exempt corporation whose membership includes 30 leading U.S. research universities and 38 agribusiness companies and trade associations representing the chemical, agrochemical, seed, forestry, pulp and paper, energy, pharmaceutical, food and other non-food agricultural product industries. CPBR links world class university research and new technologies to industrial needs to encourage the rapid development of new products and processes.
Page 178 PREV PAGE TOP OF DOC The reality confronting the agricultural biotechnology industry is that there are simply not enough funds available to conduct research in any number of concentrations. Everyone is in favor of solid research and development, and making the best use of our resources and farm commodities but corporations are unable to finance research that requires long term investment and the Federal Government is under increasing pressure to reduce discretionary spending on many programs, particularly agricultural research. However, the benefits of this research cannot be denied. The issue in Congress is always what is the best use of limited funds. Bearing this in mind, CPBR has implemented a winning strategy for funding its agricultural research initiatives: private sector matching and returns on Federal investment; rapid commercialization rates, public/private membership and partnership and commercially viable project development.
Private Sector Matching/Return on Federal Investment. CPBR research projects are chosen through a highly competitive two-stage process involving industrial review for relevance and scientific peer review. CPBR's peer review is modeled on the NSF, NIH, USDA/NRI, and DOE/OER peer review processes, and is carried out by the same academic scientists. Project selection is based first and foremost on scientific merit. The potential for transfer of new information and technologies from research laboratory to marketplace is a consideration after scientific merit has been established.
Through CPBR's project selection process, Federal funds are matched 120 percent with non-Federal funds. For every $1.00 the Federal Government has invested in CPBR research, $2.20 worth of research has been performed. Industry has provided 50 percent cash matching, plus an equal amount of in-kind matching and substantial investments in technology development. CPBR is unaware of any other research consortium that can claim a matching level more than double the Federal contribution.
Page 179 PREV PAGE TOP OF DOC Federal funding to CPBR (1989 to present):
U.S. Department of Agriculture: $15,670,000
U.S. Department of Energy: $16,100,000
Industry and other: $38,144,000
Total Federal and non-Federal: $69,894,000
For every $1 in Federal funds, CPBR's project selection process has generated an additional $1.20 in non-Federal matching, or 120 percent, for a total of $2.20 for research.
Of the $1.20 in non-Federal matching, industry has voluntarily invested, on a project-by-project basis, $.60, or 50 percent of the non-Federal matching. This industrial matching is in cash, not in-kind.
In addition, industry has provided additional significant in-kind support and made large investments in the commercialization of technologies resulting from CPBR projects.
Companies partner with CPBR projects to provide co-funding, transfer new technologies, and produce new and improved products and processes, creating jobs and economic growth.
Commercialization Rate. Due in large part to the private-public nature of CPBR, university and corporate researchers collaborate throughout the research project development process to rapidly develop promising commercial applications. CPBR has accelerated its commercialization process to 3 years, as compared to the 10-year industry average.
Research results have been incorporated into numerous product and process areas, including seeds, foods, agrochemicals, commodity and specialty chemicals, pulp and paper, transportation fuels, electric power, and environmental products.
Page 180 PREV PAGE TOP OF DOC A survey of 66 two-year research projects selected through CPBR's Energy from Biomass competitions, 19921996, revealed some of the outstanding results obtained after only three to four years of research, results which typically would take 10 years or more. These include:
30 patents awarded or applied for;
19 inventions licensed or under negotiation, many with multiple licensees;
16 research material transfer agreements;
$5 million in additional research funds, not including original matching;
2 companies started; another in planning stage; one consortium established;
60 scientific papers; and
1,000 post-docs, Ph.D.'s, MS's, undergraduates, high school teachers and students trained.
Private-Public Membership and Partnering. CPBR members includes 30 leading U.S. research universities and 38 agribusiness companies and trade associations representing the chemical, agrochemical, seed, forestry, pulp and paper, energy, pharmaceutical, food and other non-food agricultural product industries. CPBR is a public-private partnership that brings together industry and universities to conduct plant biotechnology research
Commercially viable project development. Over 220 CPBR research projects have been funded with approximately $68 million in Federal and non-Federal funds. CPBR projects have resulted in major scientific breakthroughs and commercial successes to achieve disease resistance, pest resistance, stress resistance, increased yield, nutritional improvement, and new uses of plants such as transportation fuels and industrial chemicals. CPBR's plant biotechnology focus has expanded beyond plant-based applications in the seeds, foods, and agrochemical industries to include applications to the environment, energy, health, specialty chemicals and other products from renewable sources.
Page 181 PREV PAGE TOP OF DOC CPBR looks forward to building on the successes that it has already realized. CPBR plans to continue to increase its membership and participation from the many academic research centers in the United States and abroad and from current and future corporate partners throughout the world. However, it is only through the continued support of the Federal Government that this story will continue to be a success story.