Manitoba Co-operator | October 28, 1999 | Greg Arason
Excerpts of a speech to a Canadian International Grains Institute Biotechnology Seminar for Senior Executives course given by Greg Arason, president and CEO, CWB, October 19, 1999. One of the realities of current and future markets is the impending need to segregate GMOs and to segregate non-GMOs too. Let me give you some examples.
According to the CEO of ConAgra, Bruce Rohde, ConAgra began working with corn growers this summer to try to segregate GMO corn. He went on to say, "If you don't segregate it, you can't market to get the cost benefit out of it."
ADM has established a process to segregate corn varieties that are not registered for sale in the E.U. Honda Corporation is setting up a facility in the U.S. to segregate non-GM soybeans.
The Ontario soybean industry is segregating non-transgenic beans to meet several different market opportunities. Itochu Corporation has instructed Quality Trading Inc. of Illinois to prepare to handle only non-transgenic crops. In turn, Quality Trading is instructing their country elevators to begin segregating non-transgenic crops.
Kanot Soybean Wholesale Federation of Kawaquchi, Japan is purchasing only GMO-free soybeans.
Warburton's bakery in the U.K. has indicated clearly to the CWB, and, I am sure to those with whom they work here in Canada, that they will expect the Canadian system to deliver to them wheat that is not transgenic.
The way the market is reacting to transgenic crops as food ingredients, there is little doubt that we will have to segregate non-GMO wheat and barley varieties for some customers. The challenge is to have a system in place to do this well before they are introduced. Hopefully through pro-active marketing we will be able to limit the need for zero-tolerance I.P. programs. Even with the very aggressive, pro-active marketing program which the CWB is setting out at this time, there will likely be those customers who will most likely not accept transgenic cereals when the first varieties are coming up for registration. A couple of significant concerns that we have are characterized by the following reactions: Kirin and Sapporoto Breweries are removing the transgenic maize in their beer. Kirin says, "We cannot ignore consumer doubts about the safety of GM crops."
The Japan Tofu Association has decided to move to all non-GM soybeans for their tofu production.
Nippon Flour Mills is looking at replacing the cornstarch that they are using with wheat starch in an effort to get away from transgenic ingredients in their food products. This is good news for wheat only if we can assure the Japanese that we can deliver non-transgenic wheat to their market. In all likelihood, Japan will be unwilling to approve a transgenic wheat for importation. Every one of our Italian customers said they would not import transgenic durum until there was clear consumer acceptance.
They estimated this to happen sometime towards 2008. If the only major premium market that is left to sell transgenic wheat into is the United States, will that be enough? Even if we can sell them wheat, the indications are that the malting industry will not accept transgenic malting barley anywhere except China.
As an industry, we need to discuss who is responsible for what and who is going to pay the bill for failed systems that do not deliver what the customer has ordered. Where are the checks and balances? This is not about tendering or controlling car allocation; this is about ensuring that when a customer orders a transgenic they get it and when they order a non-transgenic they get it. There is no room for the slippage that is currently experienced in malting barley programs.
Many people have drawn a parallel to shipping organic grain. That is too simplistic. There is no true test that can tell organic from non-organic.
The same will not be true for Roundup Ready wheat or other
transformations.
The second issue that I want to address is the issue of supply and demand.
Those countries that have embraced biotechnology as a means to feed their own populations could have the capability to reduce imports or even replace them with domestic production using biotechnology to do so. China has openly embraced biotechnology and is aggressively promoting its use in its domestic production. This should increase their own production and could lessen their import dependence.
Argentina seems to be embracing biotechnology for crops and may be able to increase its production while targeting countries like Egypt and Iran with their sales efforts.
Drought tolerance transferred through biotechnology to wheat or durum could have a significant impact on the import requirements of our North African and Middle Eastern customers. If rice blast disease is overcome in South East Asia by biotechnology (and it is a key goal in the region's biotechnology strategy), there may be 100 million tonnes more rice available to market to a hungry population.
Life sciences companies like Zeneca suggest that because the cost of the transformations is so expensive with wheat, only developed agricultural areas like North America and Europe will have access to these technologies.
Are we making decisions today that recognize these trends or are we going to miss the mark? Prairie farmers can't afford for the industry to miss a step of this magnitude.
The CWB is a strong believer that when it comes to the marketing of food ingredients, the customer is always right, even when they might be scientifically wrong if they perceive it to be unhealthy or unsafe, or like most millers, if they think there will be a negative public reaction they simply will not buy it. Should our Canadian variety registration system which has generated world-class, quality products, be allowed to register a transgenic variety for which there is little or no market demand and which could cause harm to our reputation and/or significant logistical problems for other products? While we want farmers to benefit from any agronomic improvements, we have a real concern that there be a balance of emphasis on improved quality also. We are told that the current registration process cannot block a non-marketable variety from being registered if it meets all of the scientific approvals required.
I know that many of you are marketing transgenic canola seed to the farmers with whom you do business and, in turn, you're selling that canola to customers who are increasingly questioning the use of oil and meal from transgenic canola. It is not easy to suggest, as the American Corn Growers Association has to its members, that they should not be planting crops until some very serious questions about biotechnology have been answered.
It would seem contradictory for Canada to sell transgenic canola but not to sell transgenic wheat or barley. The position of one of the largest life sciences companies is to make all crops transgenic and then people have to consume them because they will have no choice. The CWB, as I stated earlier, does not accept this approach. The customer is always right and someone else will fill the void, perhaps leaving our farmers to pick up the pieces.
In short:
We want Prairie farmers to continue to be able to sell into all premium markets.
We want Prairie farmers to have access to the best agronomic technology available.
We support continued research on the development of better quality and agronomic varieties of wheat and barley using biotechnology, but there has to be a balance between the two.
In our view, no transgenic varieties should be registered for commercial production in Canada until either they have achieved full commercial acceptance in all of their potential markets or until we have cost-effective technologies to segregate by variety throughout the system.
