IGC Conference Report

by Emily Buckley
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GMO concerns were high on the agenda at the International Grains Council meeting held this June in London

At a time when Monsanto is pitching for government approval of its Roundup Ready wheat varieties in Canada, the U.S. and Japan, delegates at the International Grain Council’s annual conference in London heard both the Canadian and Australian Wheat Boards express their opposition to GM wheat.

Adrian Measner, president and chief executive officer of the Canadian Wheat Board said that "Canadian farmers are overwhelmingly opposed to Roundup Ready wheat because they can’t see a clear benefit for their bottom line and worry about the long-term agronomic and market impacts." However, they are careful not to close the door on GM wheat completely, said Measner, in case future varieties were developed with clear benefits such as disease resistance.

With more than 80% of their customers unable or unwilling to accept GM wheat, the Board is determined to satisfy their requirements, he said. The CWB has asked the federal government to introduce regulatory changes that would require a cost-benefit analysis to be performed prior to approvals, including important economic factors that the current process does not adequately address.

Work is underway in Canada to provide effective segregation for GM wheat, but this capability will not exist for some time. The CWB has formally requested that Monsanto withdraw its application and has said it will do everything in its power to ensure that GM wheat is not introduced in Canada until customers and farmers want it.

Having worked hard to develop a customer-orientated industry worth A$4 billion, the Australian Wheat Board, is not about to do anything that would jeopardize this or Australia’s "enviable" quality reputation, said Andrew Lindberg, the AWB’s managing director and chief executive officer.

"It is for these reasons," said Lindberg, "that the AWB is approaching the issue of GM foods with extreme caution and why, in the current debate in Australia, we are not supporting the commercial release of GM canola but rather supporting a moratorium on its introduction."

However, the AWB is not anti-GM, said Lindberg. "We believe that there may be potential benefits from this technology and we support the on-going research and development."

Like it or not, the fate of GM products will not be driven by the producers of these technologies, he said, but by

the acceptance of these foods by the people who pay for and consume them. Many international consumers have concerns relating to the commercialization and subsequent sale of products made with this technology, Lindberg continued, and this concern is being expressed by AWB’s customers who are becoming increasingly wary of potential con-

tamination from grain produced with GM technology.


Despite the opposition to GM wheat, other genetically modified grains are already widely traded internationally and new international rules to cover them will have a major effect on international trade, delegates were told.

To safeguard the agricultural and environmental interests of individual countries, a new international agreement on the movement of living modified organisms (LMOs) came into operation on September 11. The Cartagena Protocol on Biosafety has been ratified by 50 countries and is the first legally binding agreement governing the movement of LMOs across national borders.

Although no implementation rules have been established yet, Klaus Schumacher, president of COCERAL, the European Cereals and Grains Committee, said that from the first day of operation the Protocol’s impact on the international trade in grains and oilseeds would be profound. The detailed regulations will not be finalized until a conference in Kuala Lumpur, Malaysia in February 2004 but, said Schumacher, rules that come into effect immediately will force major changes.

For example, countries shipping LMOs for intentional introduction into the environment are required to give importing countries advance notice, while shipments of bulk commodities for direct use for feed, food or processing would have to be accompanied by documentation saying that they may contain LMOs but are not intended for intentional introduction into the environment. The documentation will be the responsibility of both parties.

Schumacher said these regulations would have huge impact on the international trade and there was an urgent need for pragmatic solutions to enable low-cost bulk handling systems to continue to provide low-cost food supplies throughout the world.

It was for this reason that the International Grain Trade Coalition, representing grain trading organizations from all over the world, was formed. Its aim is to advise governments on the potential impact of different options of the protocol and to help develop a framework of regulations that would preserve biodiversity without affecting low-cost bulk handling systems for the world’s food, feed and processing industries.


While the new worldwide rules on the movement of GM materials will cause major changes, there will be even more for those companies trading with the European Union.

Ruth Rawling, vice president, public affairs for Cargill Europe, said the proposed new rules on traceability and labeling of GMOs (which were approved by the European Parliament a few weeks after the conference) could lead to a shift to the exportation of processed foods such as meat and dairy products rather than raw materials. Identity preserved systems will become tougher and more expensive to operate, she said.

While the current responsibility for labeling is with the manufacturers who put food products on the shelf, in the future every operation in the food chain will be responsible. The E.U.’s new rules mean that all feed and food products — including flavorings — produced from GM materials will have to be labeled — although meat, milk and other livestock products will not. For this reason, E.U. processors might find themselves in competition with cheaper finished products coming from countries where the traceability and labeling rules do not apply.

Products not labeled as containing GM material will have to be covered by an identity preservation system to prove they are free at all stages from GM material. The rules on traceability mean that each operator will have to inform the next stage in the chain if the product contained GM material.

Apart from the effects on manufacturing and trade in Western countries, the new regulations on food materials like those on GMOs and others being planned could undo all the achievements of the World Trade Organization in developing a free trading system, said Kirk Miller, general sales manager for the U.S. Department of Agriculture.

Miller said that some proposals on controlling food trade seemed to reject the recent progress made in trading rules using science-based risk assessments. The Precautionary Principle, which allows trade in a product to be restricted even if there is no known health danger, is a recipe for unreasonable politically based trade restrictions, he said.

Now there is a danger with the new restrictions on biotechnology products that importing countries all over the world might consider adopting unreasonable restrictions that are not based on scientific fact. The world is at a crossroads, he said, with the opportunity to continue to liberalize trade or retreat into the darkness of more protectionist policies.

Need for change in Algerian grain industry

The grain industry in Algeria needs restructuring to enable the country to take advantage of the changes in the world grain trade, according to Mohammed Kacem, director general of OIAC, the Algerian Cereals Office, in his presentation outlining the problems of Algeria’s grain industry. The country is hoping to more than double its wheat production over the next few years in an attempt to reduce its reliance on imports and to reorganize its grain processing and marketing industries, Kacem said.

Grain consumption has fallen substantially in the past 35 years from 250 kg per person in 1967-68 to 200 kg in 2002. Algeria currently imports more than 5 million of its 8 million tonnes of annual wheat requirements and is the world’s largest importer of durum wheat.

Production has varied widely from a high of 2.8 million tonnes in 1995-96 to a low of less than 500,000 tonnes in 1994-95. In an attempt to improve production, a new development plan was introduced in 2000-01 to increase production to 4 million tonnes a year. The country also is moving gradually from a state-controlled system to one dominated by private companies. Kacem said that the production plan involved increasing output from the country’s 8 million hectares of useable agricultural land by making better use of natural resources.

Marketing is managed nationally by the OAIC with its network of 48 co-ops. These handle about 50% of national production — averaging around 700,000 tonnes per year — while the rest goes through unofficial channels supplying small-scale mills.

The OIAC also is responsible for wheat imports, but since its monopoly was removed in 1997, private operators have begun to emerge. In a series of changes, the Office is now restricted to providing financial and technical assistance to support national grain production. Its role has been defined as a statutory organization responsible for organizing, processing, regulating and stabilizing the national grains and derivatives market.

It is responsibile for evaluating national resources, defining the national procurement program, harmonizing transport costs and improving distribution systems. Warehousing organizations are responsible for collecting grain and supplying producers with seeds and other inputs.

Capacity in the grain processing industry has more than doubled since 1997 through the activity of private investors, said Kacem. From 98 mills with a total grinding capa-city of 4.2 mt, the number of mills has increased by 259 and processing capacity by 6.8 mt, resulting in 100% surplus capacity. Privately owned mills are more modern and cost effective and now account for more than 60% of production. The possibility of flour imports as a result of the WTO tariff changes has also increased competition in the market.

Mexico sees future in flat breads sales

The world market for flat and stuffing breads is growing rapidly and should provide increasing opportunities for the use of maize flour as well as wider uses for wheat. But to meet the new demand, Mexico and South American countries, which are the main producers, will have to improve production efficiency and energy usage.

Lionel Garza Ramirez, chief procurement officer of the Mexican company GRUMA, said that consumption of products such as tortillas, tostadas, pupasas, wrappings, chapatis, shami and noti, was increasing in new markets as well as in countries where the products are traditional foods. Corn tortillas and pupasas are the most important sector in the Mexican and Central American food markets, with annual per capita tortilla consumption averaging 94 kg and pupasas 13 kg. In Venezuela, consumption of maize arepas averages 28 kg per year.


In non-traditional markets such as the U.S., tortilla consumption is growing by 7% a year. There also is a steadily growing market for flour for "corn chips" and maize-based snacks and as a carrier for flavorings and crispers. These provide more opportunities for value-added products.

Mexico is a leading producer of white maize, which is the basis for many of these products. Around 8 million ha of land in Mexico is used for maize production each year, and 99% of this is for white maize. Grain production is, however, affected by higher energy costs, which are increasing the price of fertilizers and electricity costs for processing.

The country produces some 1.58 million tonnes of maize flour a year from 18 plants. This compares with 405,000 tonnes from four plants in Venezuela and 125,000 tonnes from five plants in Central America. The difference illustrates the success of Mexico’s industrialized production methods.

GRUMA, which was founded in 1949, is the world’s largest producer of white maize flour with an output of 2.5 million tonnes per year from its plants worldwide and is the largest producer of tortillas, turning out 54 million per day. The company has concentrated on improving technology and vertical integration. However, Ramirez said that between 60% to 70% of the home market for tortillas was supplied from operations that were rudimentary and energy intensive.