April 2000 / Nature Biotechnology / Volume 18 Number 4 p 361 / Richard Gilmore
Richard Gilmore, CEO and president of GIC Group, 1016 Duke Street,
Alexandria, VA 22314, writes that lurking behind the debate on genetically
modified organisms (GMOs) is the phantom fear of the ownership of staple
food resources. Gilmore says that corporate control and US domination may,
in fact, be the real boogeyman.
Most assuredly, there continues to be a level of concern about the impact of
scientific alteration of crops on our health and environment. But the world
community is gradually building an infrastructure of biosafety to
accommodate new agricultural technologies and products. Though not without
its serious shortcomings, the protocol on biosafety drafted in Montreal in
late January indicates that there is now an across-the-board consensus that
at least recognizes the potential of biotechnology for food and agriculture.
Gilmore says that foreign ownership of food resources is an inflammatory
issue when it comes to sovereign assertions of national independence and
food security. Although global regulatory systems are grappling with ways to
cope with this dilemma, recent corporate developments may have removed some
of the sting from the dialogue. Prompted by poor performance in life science
divisions, some of the GMO giants have either undergone or are in the
process of undergoing restructuring. Although the process is still
developing, a commercial climate is beginning to emerge that is more
hospitable to diversification and a wider participation in developing
bioactive agricultural resources.
Nonetheless, critics continue to cast GMOs as a threat to both organic and
independent smaller farmers. With religious zeal, says Gilmore, they advance
the legacy of the romantic myth that the family farm is still the mainstay
of modern agriculture and the most effective guardian of the world
ecosystem. The visceral fear remains that GMOs are dominated by huge,
integrated corporations whose interests are inimical to those of a
competitive agricultural system.
There may be cause for concern regarding the level of integration between
suppliers and processors and of concentration among input suppliers, but it
need not rest on false or unrealistic notions about the role of traditional
farming, particularly in developing countries. Indeed, a strong economic
case can be made for the ills of monopoly in any sector. The problems become
more worrisome if the oligopoly is also an oligopsony -- in which the same
few buyers are also the predominant sellers of GMO inputs.
Biotechnologies have, says Gilmore, already resulted in increased corporate
concentration in the seed and chemical industries, as demonstrated by a
dazzling array of mergers. Whatever the commercial rationale in favor of
these mergers, concern remains that their net effect will be to direct
technologies to what may be commercially viable at the expense of more
socially desirable technologies and products. GMO companies, for example,
may forego certain pest resistance or nitrogen fixation options because of
their potential infringement on the market of their flagship chemical and
fertilizer products.
On the other hand, GMO giants may be losing some of their firepower over the
short term, as witnessed by the likely decimation of Monsanto (St. Louis,
MO), or Novartis' (Basel) self-induced weight reduction. These changes
present newcommercial opportunities. Similarly, the maturation of
recombinant technologies is introducing consumers to product choices they
never previously had. GMO companies once associated with soybean and corn
production have now graduated to offering nutraceutical products grown under
controlled and systematic conditions, and wide-ranging foods targeted to
special diets and taste preferences.
There are other positive signs that counter assumptions that the world will
soon be facing a cartel for GMOs. First, profitable growers may assume a
more
important role in the world marketing system as integrated systems become
more dependent on their inputs. Second, value-added product will increase
the efficiency and return to growers worldwide. In 1996, a study by
Falckk-Zepeda, Trazler, and Nelson1 found that the relative returns for
Bacillus thuringiensis (Bt) cotton in 1997 were 42% to US farmers, 44% to
Monsanto/Delta & Pine Land, and 7% to US consumers. In 1999, the same
authors reported findings that "farmers and innovators share almost equally
the rents created by adopting Bt cotton"2. They also found that regions such
as California and Missouri, having low adoption rates, were disadvantaged
because their "farmers suffered a price reduction of cotton lint without
having the benefits of the technology"3. Third, small and medium-sized
companies continue to dominate biotechnology R&D. Fourth, consumers are
likely to have more market influence with GMOs than in the past, when a
greater portion of production was in undifferentiated crops. Fifth and
finally, the application of biotechnologies to agriculture will serve to
create nontraditional linkages to other markets, including pharmaceuticals,
animal health, chemicals, and a range of industrial markets not normally
associated with agriculture. Resistance to the wholesale adoption of GMOs
has produced constructive results. Putting the brakes on indiscriminate
commercialization while establishing an infrastructure for the enforcement
of biosafety has introduced a greater appreciation of the shared gain in
biotechnology. In recent years, European countries have actually stepped up
their research in biotechnology applications for agriculture and Japan has
not wavered in its commitment to the sector, despite their stringent
regulatory regimes. As with other watershed initiatives in economic history,
the era of GMOs has ushered in a host of concerns, some more legitimate than
others. There must be a concerted effort to anticipate and tackle the real
probelms. With safeguards in place, GMOs offer tremendous promise for world
agriculture.
REFERENCES
1.Falck-Zepeda, J.B., Traxler, G. and Nelson, R.G. Rent Creation and Distribution from the First Three Years of Planting Bt Cotton. The International Service for the Acquisition of Agri-biotech Applications (ISAAA) Briefs No. 14 Ithaca, NY 14 (1999).
2.Ibid, p.v.
3.Ibid, p.v.
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