The European milling industry will simply not buy one more kilo of any U.S. wheat at all if Roundup Ready wheat is commercialized." This was the stark warning delivered by Italy’s largest miller to the Board of Directors of U.S. Wheat Associates, at their August meeting in Oklahoma City.
"In a situation with ample and cheap alternative supplies and a general, strongly convinced public opinion against genetically modified organisms, we will have no alternative," Antonio Costato, chief executive officer of Grandi Molini continued to explain.
Costato, whose company uses 11 million tonnes of wheat annually, was not alone in his stand.
In an equally strongly worded statement, Peter Jones, wheat buyer at Rank Hovis, which controls 30% of the milling and baking industries in the U.K., said, "I am going to ask you not to grow genetically modified wheat until we are able to sell in our market the bread made from the flour made from that wheat. I cannot tell you how to run your business but if you do grow genetically modified wheat, we will not be able to buy any of your wheat - neither the GM nor the conventional. The latter because we will not be able to guarantee the integrity of even the conventional to zero content of GM."
"This has nothing to do with principle, or trade barriers," Jones explained, "we just cannot sell it."
The European Union was the fourth largest customer of U.S. wheat last year, importing 2.16 million tonnes. However, it was not just Europeans who voiced strong reservations about GM wheat.
Ron Olson, vice president of General Mills, one of the largest U.S. wheat buyers — purchasing one out of every 9 bushels of U.S. wheat sold domestically — agreed with his European colleagues about the importance of building and maintaining brand integrity. About half of the wheat used domestically is used in branded products, which carry higher risks if consumer confidence is lost. "Corporations must protect brand integrity for their stockholders and we will not do anything to erode consumer confidence," Olson said.
"In every study [of U.S. consumers] there are still 7% to 10% of the people who say ‘I will not buy a product if it contains a genetically modified ingredient," Olson told the USW board. "When you come to a company like ours, which is a wheat-based organization, and we run the risk that we will lose 7% to 10% of our business if we change a product and it becomes an issue... I don’t think that’s a risk our corporation would take."
Olson further explained the problems that will be experienced up the food chain, beyond the grower, noting a traditional economic concept: "When you inject a supply driven concept into a demand driven market, it’s a recipe for failure."
Future for biotechnology
Each of the U.S. Wheat customers made it clear that there was a likely future for biotechnology in wheat, when traits were developed that would provide consumer benefits and when consumers were convinced of the safety of the food. But they made it equally clear that they did not believe that the time for GM wheat had arrived.
"I do believe that GM is the future of agriculture," Costata said, "but, so far, our 380 million customers are opposed to it."
"This is not never — it’s just not now," Jones concurred. Olson reminded the board that General Mills strongly believed in the potential technology. "But," he said, "it’s an evolution, not a revolution. At some point in time the benefits will help offset the [consumer] perception side." In the meantime, Olson asked that the industry proceed with a lot of caution, education and transparency, in a more open format where all parties in the chain co-operate as it moves forward.
Earlier this year, Monsanto had indicated that commercialization would occur sometime between 2003-2005, but Michael Doane, Monsanto’s spokesperson at the USW meeting, informed the board that the company anticipates making Roundup Ready Wheat regulatory submissions in the U.S., Canada and Japan this year. However, he assured the board, "the bald facts, folks, are we’re never going to sell a seed of biotech wheat until we know we have a demand out there for the grain. That’s just the way it works. We know that’s a reality of our product development, and that’s a commitment that we can make to the industry."
Doane’s comments to the board were interpreted by some to mean that commercialization had been pushed back, however, Monsanto did not give actual dates, preferring to speak in terms of "milestones."
In a follow-up interview with a New York Times reporter, Monsanto spokesman Mark Buckingham said that Monsanto would not introduce the product until it had "industry acceptance across the board."
Doane noted that Monsanto’s focus was "shifting to improving the quality of wheat over time," with an emphasis on developing enhanced health, taste and texture traits. In the short term, he said, "these quality traits, these quality benefits, will be modest." They would not be things that would change fundamentally the demand characteristics of wheat broadly, he said. He made it clear that the Roundup Ready wheat "system" would proceed before any other characteristics were introduced, however. "The bottom line is we see the first happening to enable the second," Doane explained.
The voice of experience
The U.S. Wheat Associates Board also heard from Jerry Slocum, the chairman of the technology committee of the United Soybean Board, who has been working unceasingly on the GM issue in world markets. Basing his observations on the experience of the soy industry since 1997, Slocum advised the USW board that if there were going to be bio-engineered wheats, and the export market was important, then unapproved varieties would have to be kept out of the export channel.
"You’ve either got to keep them from being planted, or if they are planted you have to make sure they’re handled in a way that they cannot get into that channel," he insisted.
Describing the efforts of the soy industry in successfully opposing the commercialization of a GM soy product that did not have regulatory approval from the European Union, Slocum pointed out that if unapproved varieties get into the market system, the producer is the one who is going to suffer the most.
The soy industry has placed certain conditions on GM product commercialization, and he advised the U.S. wheat industry that the most important was that "the seed company shall assume legal and financial liability for any breaches in its closed loop identity preservation system that may result in lost international markets, or cargoes that are denied entry into foreign markets due to the detection of the presence of genes, proteins or DNA identified from the unapproved, biotechnology-enhanced variety. This includes all fines and demurrage charges incurred by U.S. exporters and foreign importers due to presence of unapproved biotechnology-enhanced crops of products."