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Dow Jones Commodities Service | By Kim Archer | December 13, 2001

WASHINGTON - U.S. farmers lost a net $92 million during a five-year period by planting gene-modified corn, rather than conventional corn, a study by the former executive director of the National Academy of Science Board of Agriculture says.

The report is one in a series to be published by Genetically Engineered Food Alert, a campaign promoting testing and labeling of GM foods.

According to study author Charles Benbrook, American farmers paid at least $659 million in price premiums to plant GM corn from 1996-2001. In doing so, farmers boosted harvest by only 276 million bushels, worth some $567 million in economic gain, he said.

Generally, corn farmers paid $28 per acre for conventional seed and $37.80 per acre for GM seed, a 35% increase, he said.

"The bottom line for farmers is a net loss of $92 million, about $1.31 per acre," Benbrook wrote. "On average, yield increases due to Bt corn have not increased farm income enough to cover the higher costs of BT seed. The jump in per acre seed expenditures with Bt corn is by far the biggest in history linked to a single new trait."

Genetically modified corn, also referred to as Bt corn, is genetically engineered to resist the European Corn Borer and the Southwestern Corn Borer.

"The economic value of using Bt corn depends largely on whether infestation levels of ECB/SWCB impact yields," Benbrook said. He concedes GM corn increases yields by 20% to 30%, but seed costs outweigh those profit savings.

"Why then the uninterrupted, steady stream of positive news in the farm community about the yield and economic benefits of Bt corn? The preponderance of happy news stems in part from effective, well-funded industry PR and advertising," Benbrook said.

U.S. farmers have now planted more than 70 million acres to GM corn, he said. Overall, the U.S. Department of Agriculture estimates farmers have planted a total of 76 million acres of corn for the 2001-02 marketing year.

Yet some major markets, such as the European Union, are resistant to GM foods.

"We estimate that the U.S. has foregone about 350 million bushels of corn export sales to the European Union since 1996-97 largely because the EU doesn't want GMOS," says Dan McGuire of the American Corn Growers Association, a smaller alternative to the National Corn Growers Association.

"The findings of this report are part of a triple negative for farmers - lost corn exports, lower corn prices and less net profit from GMO corn, which is why the ACGA cautions farmers on their seed choices," he said.