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Food Companies Fail To Disclose Shareholder Risk
Of Genetically Engineered Crops

August 19, 2004

Despite Requirements, Most Companies Not Following Letter or Spirit of The Law

Ninety-five percent of the top food companies in the United States fail to properly inform shareholders about the risks posed by genetically engineered (GE) ingredients, according to Duty to Disclose: The Failure of Food Companies to Disclose Risks of Genetically Engineered Crops to Shareholders, a new report released today by the U.S. Public Interest Research Group (U.S. PIRG).

While one mistake involving genetically engineered crops is estimated to have already cost the food industry over one billion dollars, and more shareholder resolutions have been filed regarding GE issues than any issue since apartheid-era South Africa, only two of the top 35 publicly traded food companies mention GE ingredients in their Annual Reports as required, according to Duty to Disclose.

"Shareholders need to know about the products their company makes," said U.S. PIRG Safe Food Advocate Richard Caplan. "By not disclosing the many risks posed by genetically engineered crops, food companies are failing to meet their legal duty to be fully honest with shareholders."

Duty to Disclose describes the risks posed to food companies from genetically engineered ingredients, including product liability lawsuits, loss of insurance coverage, damage to reputation, consumer rejection, international renunciation, cross contamination, and economic loss due to sudden regulatory changes. While Federal federal regulations require that investors receive full disclosure of any material facts about the companies in which they own shares, only Kraft Foods Inc. (KFT-NYSE) and Interstate Bakeries (IBC-NYSE), makers of Hostess Cupcakes and Wonderbread, disclosed to shareholders that genetically engineered ingredients might pose a material risk to shareholders.

"Just as crops require sunlight to grow, investors need the 'sunlight' provided by full disclosure of material risks in order to grow their portfolios," said Michael Leone of Green Century Capital Management, a mutual fund company. "The risks of genetically engineered foods should be disclosed so that investors can make informed decisions," he concluded.

Industry estimates maintain that 60 to 70 percent of all processed foods on American grocery store shelves contain GE ingredients. Human safety testing by the Food and Drug Administration is not mandatory, nor are companies required to label GE products. A recent poll by the Food Policy Institute found that 78 percent of respondents thought it "very important" that the food they purchase does not contain GE ingredients, and 94 percent believe that GE foods should be labeled as such.

Duty to Disclose makes several recommendations, including a call for food companies to remove the financial risks associated with genetically engineered ingredients by removing genetically engineered ingredients from their products.

"The risks from genetically engineered food aren't only to the environment or human health, but are financial as well," concluded Caplan. "Food companies should stop hiding the truth from shareholders, and let them know the risks they face from genetically engineered crops."

For More Information: Liz Hitchcock or Richard Caplan 202-546-9707

U.S. PIRG is the national advocacy office for the state Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy organizations.

Green Century Capital Management, Inc. is the investment adviser to the Green Century Balanced Fund and the administrator of the Green Century Funds. The Green Century Funds are the first family of no-load, environmentally responsible mutual funds and were founded by a partnership of non-profit environmental advocacy organizations.


Biotech Bans Finally Arouse Farm Industry

By Mike Lee -- Bee Staff Writer
Sacramento Bee
August 16, 2004

Opposition gears up to fight county ballot measures.

California's agricultural establishment is gearing up for a ballot-box brawl this fall.

Worried that county bans on biotech crops could spread throughout the state, mainstream farm groups from the California Cattlemen's Association to the national Farm Bureau are marshaling their resources.

It's a change in tactics for biotech backers, who until now have left the ban issue mostly in the hands of biotech companies.

The stakes are higher than ever. November ballot measures in Humboldt, Marin, San Luis Obispo and Butte counties could determine whether the state embraces the new seed technology or makes its mark as free of genetically engineered crops.

Two counties - Mendocino and Trinity - already have outlawed such crops, citing a desire to protect organic crops from genetic pollution and to oppose the control of farming by a few multinational biotech companies.

Several other counties also are being targeted, mostly in areas with strong organic sympathies and the kinds of crops that won't have biotech options for years.

For conventional farmers, the issues are twofold: preventing counties from regulating what they can grow and preserving the possibility of genetically engineered crops for the future.

"It's going to wreak havoc on the state if every county passes ordinances to regulate" genetically modified organisms, said Don Bransford, a Colusa County grower and chairman of the California Rice Commission.

The key November battleground is rice powerhouse Butte County, where Measure D convinced ag leaders that the biotech backlash was a real threat, not just a political statement.

If biotech crops are barred from Butte, some fear it would send an anti-technology message about California, and companies would hesitate to develop biotech varieties here. Herbicide-tolerant rice, which allows farmers to chemically kill weeds without harming crops, is expected to be one of the next major biotech crops.

The board of the rice commission - the industry's dominant voice in California - voted 28-1 last week to fight Measure D. It's developing a "communications plan" to influence Butte voters along with a backup litigation plan in case the measure passes.

The commission didn't take a position on genetically engineered crops, which growers both support and oppose. Instead, Bransford said state law, not county mandates, should control how rice is planted.

Genetic engineering typically protects plants from bugs or makes them resistant to herbicides. The trick is accomplished in laboratories by cutting and pasting DNA.

Many farmers around the world embrace the technology, which allows for easier pest and weed control. However, consumer advocates and organic growers worry about the potential health and environmental consequences of tinkering with the genetic code.

California has an estimated 600,000 acres of biotech crops, split between corn and cotton. That number has grown steadily over the years, but remains small compared to Midwest states. Much of California produces specialty crops that don't yet have biotech options, though several are being developed.

David C. Nunenkamp, deputy secretary of the California Department of Food and Agriculture, last week told county agriculture commissioners that local ordinances could have a "chilling effect" on a core state industry.

That's a common feeling in farm country, though many acknowledge concern about federal regulatory gaps and a state policy on biotechnology that hasn't been updated in two decades.

In July, the California Cattlemen's Association became one of the first statewide ag groups to publicly oppose all county biotech bans. They say such measures set a dangerous precedent that could someday threaten ranchers.

"It's inappropriate for local governments to dictate what tools may be used by agriculturalists now or in the future," cattlemen's president, Darrel Sweet, said in a statement.

The cattlemen have dispatched a top official to lead opposition to the Butte measure. Their efforts will be backed by American Farm Bureau Federation President Bob Stallman, who plans to speak at an Aug. 23 fund-raiser for Measure D opponents.

In Sacramento, biotech backers are widely rumored to be shopping legislation that would stop counties from regulating biotech crops. Even the U.S. Department of Agriculture, the main regulator of biotech crops, reportedly is scouring county initiatives to build a legal case against them.

The mounting opposition has the attention of anti-biotech activists who for months pushed ballot measures with relatively little resistance. "All of the ag world is lining up against Butte County," observed Renata Brillinger at Californians for GE-Free Agriculture in Occidental.

Butte activist Scott Wolf remains defiant despite his opponents' daunting political and financial force. "We are definitely not going away," said Wolf, chairman of Citizens for a GE-Free Butte. "We are hoping our personal relationships and educating people about the issues will make the difference."


UC Riverside Earns $1.5 Million National Science Foundation Grant
to Examine How Engineered Crop Genes Stray

August 17, 2004

Research to be Done Through UCR's Biotechnology Impacts Center

RIVERSIDE, Calif. (Aug. 16, 2004) - The National Science Foundation has awarded UC Riverside a $1.5 million grant to research the unintended spread of engineered plant genes, an issue at the heart of the controversy over genetically modified foods.

That phenomenon was illustrated recently when engineered genes from corn grown in the United States strayed into remote fields of corn in Mexico.

UC Riverside's project is unusual because it will examine both the natural and the human factors that spread transgenes from engineered crops into non-engineered crops and natural populations.

"This hasn't been done before, and I'm excited to get started," said Norman Ellstrand, a professor of genetics who is also director of UCR's Biotechnology Impacts Center. "Our project involves social scientists with diverse expertise ranging from international trade to farmers' decision making in genuine collaboration with biological scientists who study gene transfer and the evolution of invasive species."

The project, which begins Sept. 1, will assemble faculty and graduate students from botany and plant sciences, economics, sociology, and statistics into three multidisciplinary teams.

. One group will focus on natural processes that affect dispersal of genes such as wind, timing of plant flowering, or proximity to compatible wild relatives.

. A second team will focus on human elements, including farmer management and transport of seed through local and international trade.

. The third team will employ state-of-the-art mathematical and computational modeling to estimate the timing and patterns of the spread of transgenes across space and national borders as well as their ecological consequences. The result will be the first global model of gene flow that accounts for both human and natural processes of gene dispersal.

"This is really very exciting," said Richard Sutch, a distinguished professor of economics and associate director of the Biotechnology Impacts Center. "Everyone talks about the value of interdisciplinary research and of collaboration between the sciences, but this is one of the few projects that takes this seriously. And this is such an important topic. Food is a part of everyone's life, an important expression of one's culture. It is not surprising then that there is a raging debate about genetic engineering that goes beyond the issues of biological science."

A third co-investigator, Bai-Lian (Larry) Li, is a mathematical and theoretical ecologist who is an associate professor of ecology. "The coupling of natural and human systems adds an additional layer of complexity of interactions," said Li, the founding editor of the international journal Ecological Complexity "Understanding must come from the examination of how the two systems operate together."

Sutch added that an understanding of the subject could provide information for important public policy decisions. "We may be able to find ways to control the unintended migration of transgenes and thereby harness the benefits of this new technology," Sutch said. "Alternatively, we may discover that the risk cannot be reduced to acceptable levels for certain combinations of crops and genes."

Steven Angle, dean of the College of Natural and Agricultural Sciences, stressed the role of UCR's Biotechnology Impacts Center as "an honest broker" in this debate. "The scientists conducting this research have no stake in the policy outcomes," Angle said. They hold no patents on genetically modified plants. The study will provide solid scientific input to inform the public and the policy makers at national and international levels."

Joel Martin, the interim dean of the College of Humanities, Arts and the Social Sciences, said he likes the project's inclusion of several graduate students who will be intimately involved in the multidisciplinary meetings of the group, including at least one international conference in Mexico. "It is rare for graduate students to have an opportunity to participate in a multidisciplinary international research project such as this," said Martin.

The topic of transgene flow is a part of the greater public discussion of genetic engineering and the world's food supply. Biotechnology has the potential of increasing crop yields, lowering production costs, and offering consumers more choices and higher quality at the supermarket. But certain risks have been identified, such as the evolution of new weeds because of contamination with transgenes that make them more difficult to control.

"Recalling genes is more difficult than recalling defective car parts or contaminated meat," said Ellstrand. "Because genes have the opportunity to multiply themselves. We have to find out how to avoid the problem before it happens."

Contacts at University of California, Riverside

Norman Ellstrand, Lead Principal Investigator
Biocomplexity Project
Professor of Genetics
Director, Biotechnology Impacts Center

Richard Sutch, Co-Principal Investigator
Biocomplexity Project
Distinguished Professor of Economics
Associate Director, Biotechnology Impacts Center

Bai-Lian (Larry) Li, Co-Principal Investigator
Biocomplexity Project
Professor of Ecology, Botany, and Plant Sciences

Contacts at National Science Foundation

Thomas Baerwald Coordinator for Environmental Social and Behavioral Science Activities
Division of Behavioral and Cognitive Sciences


Twelve Reasons for Africa to Reject GM Crops

Zachary Makanya
from Seedling Magazine (published by GRAIN)
UC Berkeley
August 17, 2004

Africa is in danger of becoming the dumping ground for the struggling GM industry and the laboratory for frustrated scientists. The proponents of GM technology sell a sweet message of GM crops bringing the second green revolution and the answer to African hunger, but a closer look makes it clear that GM crops have no place in African agriculture.

The push to bring genetically modified (GM) crops into African agriculture is not letting up, even as (and partly because) the GM industry is faltering in much of the world. A growing list of organisations, networks and lobby groups with close ties to the GM industry are working to promote GM agriculture on the continent. GM crops are so far only commercially available in South Africa, but there have been field trials in Kenya, Egypt and Burkina Faso, and also in Senegal and Zimbabwe where there was no public knowledge or regulatory oversight. At least12 African countries are carrying out research on GM crops, including Egypt, Uganda, Morocco, Nigeria, Tunisia and Cameroon, and a long list of GM crops are in the pipeline for introduction in various African countries (see map). There¹s also concern that GM crops are coming in by way of food imports and seed smuggling, even for countries that have taken measures to prevent imports of GM food, such as Zambia, Angola, Sudan, and Benin.

In short, Africa is in danger of becoming the dumping ground for the struggling GM industry and the laboratory for frustrated GM scientists. The proponents of GM technology sell a sweet message of GM crops as the second green revolution and the answer to African hunger, but the reality is quite different. A close look at GM crops and the context under which they are developed makes it clear that GM crops have no place in African agriculture. Here are twelve reasons why:

  1. GM Crops will contaminate non-GM crops; co-existence is not possible

    GM crops are plants and, as such, they cannot be easily controlled. Pollen can travel long distances by way of wind and insects. Human error and curiosity or simply regular farming practices also help seed to spread. GM crops can therefore never co-exist with non-GM crops of the same species without the risk of contaminating them, especially in Africa where tight controls over seeds and farming is unrealistic. This contamination would have serious implications for small-scale farmers. For instance, it would endanger the indigenous seeds that these farmers have developed over centuries and that they trust and know. Farmers with contaminated fields could also end up being forced to pay royalties to the companies that own the patents on the GM crops that contaminated their fields.

  2. GM crops will foster dependence on a corporate seed supply.

    Most GM seed manufacturing companies prohibit farmers from saving their on-farm produced seeds for the next season and from sharing them with their neighbours, relatives and friends. This is imposed through elaborate contracts, agreements, and conditions, which are imposed by the multinational GM seed companies. More than 80% of the small-scale farmers in Africa today save their on-farm produced seeds for the next season. Farmers sometimes do this because they do not have enough money to buy new seeds and sometimes because they value their own seed. Also, seed sharing (with neighbours, relatives and friends) is a cultural norm in many African communities. The introduction of GM seeds will jeopardise these traditional and vital practices.

  3. GM crops will usher in ŒTerminator¹ and ŒTraitor¹ technologies.

    ŒTerminator¹ and ŒTraitor¹ technologies are two examples of Genetic Use Restriction Technologies (GURTs). ŒTerminator¹ seeds are genetically modified so that the plants that they grow into produce sterile seeds (seeds that are infertile cannot germinate in the next season or any other time). ŒTraitor¹ technology produces GM crops that need to be sprayed with certain chemicals in order to grow properly. It is important to note that these technologies are targeted specifically at developing countries but offer no positive benefit to farmers at all. GURT technologies will cause African farmers to become wholly dependent on companies for their seed supply and for the costly chemicals that their seeds will not be able to grow without. The technologies promise rich rewards for the multinational companies, but they spell doom for small-scale farmers in Africa.

  4. GM crops will increase the use of chemicals.

    More than 70 % of all the GM crops currently grown in the world are genetically modified to resist certain herbicides. Farmers that grow these GM crops must use the herbicides sold by the very companies selling the GM seeds. Not surprisingly, studies show that these crops are increasing the use of herbicides, especially as certain weeds develop resistance to the herbicide. Once again, the GM seeds promises huge profits for multinational corporations, but only increasing costs for small-scale farmers in Africa.

  5. GM crops are patented

    Transnational corporations own nearly 100% of the agricultural biotechnology patents and the majority of these patents are controlled by a handful of pesticide corporations. These companies will use their patents to block research that does not suit their interests and to trap farmers into paying them royalties every year on seeds and into a never-ending dependence on their chemical inputs.

  6. GM crops favour industrial agriculture systems

    They are designed for agricultural systems characterised by

    • Large farms: In Africa, 80% of the population are small-scale farmers with 0.5­3 acres of land. Appropriate agricultural technologies should help small-scale farmers to diversify and intensify their on-farm enterprises.
    • Monocropping: Due to the small size of farms and challenging environmental conditions, monocropping is not favourable to African agriculture.
    • Subsidies: While the farmers in the west are highly subsidised, African farmers do not get any subsidies and cannot even recoup the cost of their crops production.
    • Mechanisation: While farming in the developed countries is highly mechanised, most African farmers depend on human and animal power.
    • Reliance on external inputs: African farmers cannot afford the high cost of inputs that accompany the growing of transgenic crops. This is one of the main reasons for the failure of the green revolution in Africa.
  7. GM crops threaten organic and sustainable farming.

    Most of the farmers in Africa practice organic agriculture (by default or by choice). Genetic engineering poses a great threat to such farmers in several ways, including the following:

    • Many farmers in Africa rely on Bacillus thuringiensis (Bt), a microbe found in the soil that farmers can use as a natural insecticide. The toxin-producing genes of Bt have also been genetically modified into certain crops so that these GM crops constantly express the Bt toxin. The widespread growing of GM Bt crops will encourage the development of resistance to Bt among important crop pests, thus rendering this natural insecticide useless.
    • Organic farmers practice mixed cropping and crop rotation. These practices will be threatened by herbicide-tolerant GM crops, which use broad-based herbicides that kill all plants, not just the weeds that farmers may not want.
    • Natural fertility is a key factor in organic/sustainable agriculture. The herbicides encouraged by GM crops kill fungi and bacteria essential to soil fertility management.
  8. The biosafety systems required are unrealistic for African countries

    African nations lack the expertise, equipment, infrastructure, legislation and regulatory systems to implement effective biosafety measures for GM crops. They also lack the funds to build these up and will therefore have to look for outside funding, which will increase their already heavy foreign debt loads. Should the development of GM agriculture really be a priority for African governments at this point in time?

  9. GM crops will not reduce hunger in Africa

    Hunger in Africa is not due to a lack of food; there is enough food for all. The main problem is the poor purchasing power of the population because of poverty. This poverty is exacerbated by trade liberalisation in the context of deep global inequality. With trade liberalisation, African farmers have to compete directly with the heavily subsidised and marketed agricultural products from the West. It¹s like a soccer match with the small scale farmers playing uphill.

  10. GM crops will not resolve problems with pests

    GM crops encourage the prolonged and continuous use of herbicides and pesticides, including the pesticides expressed by GM plants. As a result, pests and harmful weeds inevitably develop resistance, forcing farmers to use more pesticides and more toxic mixtures. Attempting to overcome pests by the selective use of pesticides targeted at one particular pest, is particularly short-sighted in tropical agriculture, because simply eliminating one pest allows space for secondary pests to proliferate and take over.

  11. GM crops will encourage the arbitrary destruction of biodiversity

    African biodiversity is rich and complex, but it is also fragile. GM crops could easily upset the ecological balance, bringing serious repercussions for farming and the surrounding environment.

  12. GM crops are a threat to human health

    Little is known about the impacts of GM crops on human health. Extensive and independent studies have simply not been done. But the risks are clearly real, especially for Africa, where diseases that are effectively controlled in the West still run rampant. HIV/AIDS, for instance, was first discovered in the West but it is now decimating the African population, and few Africans can afford the cheap retroviral drugs that can lengthen the lives of those who are infected. Today, every person in Africa is either infected or affected by the disease or both.

What is to be done?

Africa needs to apply the precautionary principle which advises to not proceed when there is no certainty for safety of health and the environment. Given Africa¹s constraints ­ lack of resources for effective biosafety measures and lack of awareness about GM crops among the public and farmers in particular ­ the only practical and appropriate position for African governments to take at present is to declare a moratorium on the commercialisation of GM crops. This must be upheld until adequate research has been carried out into the different socio-economic, environmental, and agronomic issues surrounding GM crops and until there is enough public awareness for proper public consultations to be carried out. The right of African governments to make their own decisions should be respected by other countries.

This does not imply that African countries should put agricultural research on hold. To the contrary, African countries should enhance their investments in agricultural research. But such investment must support farmer-driven research and it must focus on the specific and local problems that affect farming communities. It is time for African governments and their development partners to address the root causes of poverty and food insecurity. In line with this, much more can be done to support:

  • fair trade and improved food processing and marketing systems,
  • improved rural infrastructure,
  • farmer-friendly credit schemes,
  • low cost irrigation systems,
  • rural training to sharpen the skills of local farmers in food productionand food processing, rangeland management.

Only Africans can provide African solutions to African problems. Outsiders may help, but the insiders, those who are affected, must do the job. The best way to bring about sustainable development is to strengthen existing, local production systems, while protecting them from such threats as GM crops.

Zachary Makanya works for the PELUM (Participatory Ecological Land Use Management) Association, a network of 170 NGOs in ten countries of East and Southern Africa: Kenya, Uganda, Tanzania, Rwanda, Zambia, Zimbabwe, Malawi, Lesotho, Bostwana and South Africa. PELUM helps to build the capacity of member organisations to work with small scale farmers to improve their livelihoods through ecological land use and management. PELUM is also involved in campaigning, advocacy and lobbying on policies and issues that affect the livelihoods of small scale farmers.

GM technology has a direct impact on the small scale farmers and PELUM Association is determined to take the debate to the grass-roots and educate its members so that they farmers can act not from ignorance but from knowledge.

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