Copyright Sociological Research Online, 1999

Fred Buttel (1999) 'Agricultural Biotechnology: Its Recent Evolution and Implications for Agrofood Political Economy'
Sociological Research Online, vol. 4, no. 3, <http://www.socresonline.org.uk/4/3/buttel.html>

Abstract

This paper provides an overview of the recent development of the agricultural biotechnology sector and suggests what are likely to be some of the major issues in agrofood biotechnology in the future. I argue that while biotechnology has become increasingly entrenched as an approach to agrofood research and development, there are enormous public and especially corporate resources committed to biotechnology, and the growth of GMO market share in U.S. soybean, corn, and cotton production has been impressive, there has recently been growth of social resistance to biotechnology that casts the technology's and industry's future in some doubt. In addition to discussing the extent and limits of social resistance to biotechnology, I explore several other facets of agrofood biotechnology--global consolidation of the biotechnology industry, trade in GMO-produced food products, and the new corporate focus on "value-enhanced crops"--that will have a critical bearing on its future. I conclude by suggesting that while social resistance to agrofood biotechnology is very unlikely to derail the industry, public opposition will shape corporate strategy and could possibly shape research priorities in public biotechnology research.

Keywords:

Agriculture; Biotechnology; Consumption; European Union; Food; Political Economy; Social Movements; Trade; World Trade Organization

Agricultural Biotechnology: Its Recent Evolution and Implications for Agrofood Political Economy

INTRODUCTION

1.1

Agricultural biotechnology as an object of public research and commercial agrofood research and development (R&D) is now nearly two decades old. Thus, it is not surprising that there are a good many respects in which agricultural biotechnology is becoming routinized. In addition to near-universal corporate commitment to biotechnology as the technical basis of developing new agricultural inputs, the commitment by the world's major public research institutions to biotechnology as the path or trajectory of R&D is very substantial and increasing each year (Krimsky and Wrubel, 1996; Busch et al., 1991).

1.2

The commitment of the private and public R&D communities to agricultural biotechnology is particularly the case for crop research. To be sure, there are some modest pockets in which non-biotechnology approaches (such as traditional plant breeding) still predominate. The Consultative Group on International Agricultural Research (CGIAR) system, for example, still tends to emphasize traditional plant breeding methods (e.g., quantitative genetics, backcrossing, and field plot experiments) over biotechnology, though the CGIAR centers have invested increasing levels of funding in biotechnology over the past dozen or so years. Traditional plant breeding and related approaches are still predominant in most of the developing countries, though there are roughly a dozen developing countries in which molecular-biological and related methods have assumed considerable importance. There are also significant sustainable agriculture research communties in both the developed and developing countries. On the whole, though, in mainstream agricultural research circles across the globe biotechnology (or "genetic engineering") is largely the accepted approach. Enormous private sums have been invested in agrofood genetic engineering. The governments of virtually all the advanced industrial societies -- including those, such as the U.K., where there is no small amount of public resistance to GMO food products -- are actively engaged to a greater or lesser extent in promoting public and private agricultural biotechnology R&D. Thus, the biotechnologization of agricultural R&D has proceeded to the point that there is, in some sense, "no going back."^[1] Enormous path-dependence has already been established.

1.3

But while is agricultural biotechnology is essentially an irresistible force, there is likewise every indication that the social (and, to some extent, the ecological) barriers to agricultural biotechnology constitute something of an immovable object. At this writing (in early September 1999) the future of transgenic crop varieties, other biotechnology inputs (e.g., recombinant bovine growth hormone), and GMO foods appears more shaky than at any other point in the 1990s. In this paper I want to review some of the major events and trends with respect to agricultural biotechnology and make some remarks about their implications for agrofood systems, particularly in relation to plant agriculture.

Theoretical Background and Methodological Approach

2.1

Agrofood biotechnology is an arena which is brimming over with opportunities for sociological inquiry. Agrofood biotechnology, however, does not readily lend itself to a singular theoretical approach because it is a trans-institutional phenomenon-involving essentially all the major institutional complexes of modern societies-for which the appropriate units of analysis range from the social psychological or discursive to the global or world-economic. My approach will thus be an eclectic one which draws from several complementary literatures but which is anchored in an overarching political economy viewpoint.

2.2

At the most general level, I am interested in the relationship between technology and the structure of agrofood systems. In so doing I rely on the agrarian political economy tradition of Goodman et al. (1987), Goodman and Redclift (1991), and Friedmann (1990), who highlight a dual tendency in the structure of rural economies and farm production systems. On one hand, farm production under capitalism has tended to be organized as household production ("family farming") due to some distinctive aspects of agricultural production: the discontinuous nature of the production process owing to the dominant role played by natural cycles of seasons and the reproductive cycles of animals, the difficulties of recruiting nonfamily labor given the discontinuous nature of the production process, and the fact that agriculture's major input (land) is fixed in quantity, cannot be manufactured, and is therefore not nearly so subject to concentration and centralization as is industrial property. On the other hand, capital may look upon agriculture as an attractive investment or market frontier, and new technology may provide the means for overriding the tendencies that would otherwise cause farm production to be relegated to peasantries, family farms, or other forms of household production. Biotechnology is a form of technology that is often thought to play a role in facilitating far-reaching structural change in farming (see especially Goodman and Redclift, 1991).

2.3

Another set of theoretical tools derives from the literatures that reflect ongoing debates between those who anticipate that "globalization" will progressively weaken the authority of the national-state vs. those analysts who argue that there are very definite limits to globalization (see the overview of this debate, albeit a partisan one, in Weiss, 1997, and a perspective on the relevance of this debate to agrofood restructuring in Buttel, 1996). Agrofood biotechnology, as will be demonstrated below, is clearly implicated in the new global market structures which feature transnational markets and increasingly footloose corporations. At the same time, I will suggest that agricultural biotechnology is not an unambiguous juggernaut of globalization. In part, this is because of the nature of the technology itself (at least, the forms it has taken thus far in agriculture). Agrofood biotechnology has generated an enduring pattern of opposition on the part of social movements, civil society groups, and international organizations. The nature of this opposition suggests some limits to the globalization process.

2.4

A final theoretical issue raised by agrofood biotechnology phenomena relates to the roles of consumers and consumption institutions in social change. There is an emerging debate (see the overview in Buttel, 1999) that the interpretive flexibilities opened up by "postmodernization" are serving to empower individual consumers as well as social movements to engage in political struggles through consumption decisions and consumption politics. Food and agricultural technology matters (e.g., "mad cow disease"; GMOs; organic and natural foods) are increasingly being stressed as arenas in which a new consumption politics of food is being established. In this paper, however, I will suggest some reasons why consumer resistance to agricultural biotechnology has major limits.

2.5

Guided by a broad political economy perspective on agricultural biotechnology, my basic method will be to explore the recent history of agricultural biotechnology. I will strive for a global as well as comparative-historical approach. My key goal, however, is to identify ongoing trends which help to elucidate what are likely to be some of the most important future issues in agricultural biotechnology. My sources are largely archival, relying heavily on the trade and popular press as well as on a range of historical and news materials available on the internet. An appendix lists the most important internet resources and periodicals that I have drawn on in this research.

The Status of Commercial Agricultural Biotechnology^[2]

3.1

Since 1986, there have been no fewer than 25,000 transgenic field trials worldwide. Over the last two years alone there have been 10,000 field trials worldwide. Sixty different crops have been engineered. The first GMO to be commercially deployed was a virus-resistant tobacco variety grown in China beginning in 1992. The first GMO in the United States was grown in 1994. Argentina, Australia, Canada, and Mexico witnessed the initial commercial planting of GMO crops in 1996. The global area of GMO crops has increased very sharply -- from 1.7 million hectares in 1996 to 11.0 million ha in 1997, and more than 28 million ha in 1998.

3.2

But despite the 15-fold increase in GMO crop area from 1996 to 1998, crop biotechnology is still fairly limited in scope. Three-quarters of global GMO cropland is in the U.S. Adoption has spread extremely rapidly in the U.S., but only in a few major crops. More than one-third of U.S. soybean acreage in 1998 was planted to transgenic varieties, while one-quarter of corn acreage and one-fifth of cotton acreage were devoted to transgenic varieties last year. Argentina and Canada are the only other world nations with significant GMO acreages; one-half of Argentina soybeans and one-half of Canadian canola are devoted to GMO varieties. Only three countries -- United States, Canada, and Argentina -- accounted for 99 percent of GMO acreage in 1998. A handful of crops dominate global GMO acreage. Soybeans alone represented 52 percent of world GMO acreage in 1988 and corn an additional 30 percent, while cotton and canola accounted for virtually all the rest of GMO crop acreage. Note that while wheat and rice are (along with corn) two of the three most significant world food crops, there was virtually no GMO wheat or rice acreage in 1988.

3.3

Current GMO crops also represent very few traits or product types. There were nearly 20 million hectares of herbicide-tolerant varieties grown in 1988, and 9 million hectares of Bt varieties. Virus resistant varieties accounted for nearly all the rest of the world's GMO acreage. All of the traits just discussed are high-value, single-gene, input traits. Most significantly, each of this first generation of GMO products has significant liabilities. In the next section of the paper I will make some brief comments about the attractions and the liabilities associated with the major types of crop GMO products.

Agricultural Biotechnology's First Generation of Products: Bt Crops

4.1

The basic nature of Bt crop varieties is that a gene coding for one or another form of the toxin produced by Bacillus thuriengensis (Bt) bacteria that inhibits various insect pests is inserted into a crop plant cell, and whole plants are then regenerated from these cells. Bt corn (along with herbicide resistant [HR] soybeans) has probably had the fastest adoption rate of any crop plant input product in U.S. history. The major apparent reason for the rapid adoption of Bt corn is the savings in corn production costs because of the sharply reduced need for insecticide spraying, though this advantage is offset by substantially higher seed costs.

4.2

But there are also significant problems with Bt corn varieties. Laboratory studies have shown quite clearly that widespread use of Bt varieties will lead to insect resistance, though there is no scientific consensus as to how rapidly resistance will render the use of Bt varieties ineffective (Gould, 1998). The reason for insect resistance is straightforward. Widespread use of Bt corn varieties is analogous to widespread use of a single insecticide, which has been demonstrated to be a very strong risk factor for development of insect resistance. Bt varietal use is also analogous to prophylactic pesticide use (that is, routine prescheduled spraying of an insecticide even if there is no evidence that there is an impending infestation), another major risk factor for development of insect resistance. The upshot of these two agroecological features of Bt crop varieties is that selection pressures for resistant insects are increased.

4.3

Biotechnology companies and university scientists recommend -- but of course cannot require -- use of "refugia" (areas sown to non-Bt-engineered varieties) to slow the onset of resistance (by decreasing selection pressure). But even if refugia were dependably employed by farmers, every biotechnology company is basically aware that Bt resistance will develop and that Bt crop varieties will only last a few years. Each of these firms is scrambling to develop new products. Currently the bulk of attention is being devoted to developing multiple-toxin varieties which, it is hoped, will reduce selection pressures and enable a broader spectrum of insects to be killed. However, most entomologists appear to believe that even the newer types of varieties under development will not necessarily be commercially and ecologically viable much longer than the simple Bt varieties now being sold.

4.4

Perhaps the most devastating news to agricultural crop biotechnology, though, was that in a 20 May 1999, article (Losey et al., 1999) in Nature John E. Losey, a Cornell University entomologist, reported evidence that Bt corn pollen is toxic to the larvae of monarch butterflies, which are often referred to as the "flagship species of conservation" and the "Bambi of insects" (Strauss, 1999:18). If these data are borne out in subsequent experiments,^[3] they will have highly prejudicial effect on crop biotechnology in several respects.^[4] First, Bt pollen toxicity will cast doubt on the regulatory review process which failed to anticipate this impact. Second, establishment of Bt pollen toxicity will reinforce environmental opposition to biotechnology products of all kinds.

HRCs--Herbicide Resistant Crops

5.1

HRCs are essentially a seed-chemical package in which a variety that is resistant to a particular herbicide is used in conjunction with that herbicide. HRCs have been attractive to farmers because herbicide resistance enables producers to use two convenient and profitable practices. First, farmers using HRCs can employ these broad-spectrum herbicides post-emergence (rather than only pre-emergence) in order to eliminate mechanical cultivation. Second, eliminating mechanical cultivation while improving weed control enables farmers to use conservation tillage, thereby reducing the number of tillage operations and saving fuel, machinery, labor, and other costs. There are currently two major HRC products: (1) Roundup Ready soybeans and cotton (marketed by Monsanto) and Roundup Ready canola, and (2) Liberty Link crops (crops [mainly soybeans] resistant to AgrEvo Liberty herbicide).

5.2

While there are dozens of herbicides that are commercially available, corporate development of HRCs has focused on a small handful of closely related broad-spectrum herbicides. To the degree that HRCs cause these broad-spectrum herbicides to be more widely used, it becomes increasingly likely that weed resistance will develop. This problem will be compounded when Monsanto releases Roundup Ready corn shortly. The U.S. Midwest is essentially a corn-soybean grain monoculture. The extension of Roundup resistance to corn would cause Roundup to be used post-emergence across a huge expanse of the U.S. "corn belt." Doing so would virtually guarantee weed resistance, in the opinion of many agricultural scientists. In addition, there has been documentation of transfer of the Roundup Ready gene from Canadian canola to a related weed species.

5.3

As noted earlier, HRC biotechnology varieties (as well as most commercially available GMO varieties) currently are single-gene biotechnology varieties.^[5] It should be noted, though, that a new R&D emphasis is that of "trait-stacking" -- combining several engineered genes in a single variety. Monsanto's "stacked cotton" -- Roundup Ready and Bt-producing -- is the first such variety on the market. It is unclear whether trait stacking will represent diversity or whether trait stacking will exacerbate selection pressures for resistance or increase the odds of gene escape.

5.4

The first data evaluating biotechnology varieties are just becoming available. The U.S. Department of Agriculture's Economic Research Service's (ERS) GMO variety performance data have recently (June 1999) been posted on their website . The USDA data show that there were significantly higher yields for biotechnology crops in a few areas, and for some years, but very little difference in other areas. The overall pattern is one of considerable variability in the performance of GMO varieties by region and by year.^[6] The equivocal economic performance of GMO varieties may make the first generation of these crops even more vulnerable to social opposition.

Global Consolidation in Agricultural Biotechnology

6.1

There are now only seven or so major corporate groups in agricultural biotechnology worldwide. These include Novartis (Ciba Geigy, Sandoz, Northrup King); DuPont/Pioneer; Monsanto/DeKalb/Holdens; Seneca/Advanta; AgrEvo; American Home Products; and Dow/Mycogen/Elanco. Most of these corporate groups are involved in agrochemical, seed, pharmaceutical, and food product lines as well as in crop biotechnology. There is also an impressive roster of companies that formerly were substantially engaged in agricultural biotechnology but that either no longer exist or which are no longer major global players in agricultural biotechnology (e.g., Stauffer, Allied, Shell, Arco, Agrigenetics).

6.2

What is the significance of this quite extraordinary degree of global industrial concentration? What difference will global concentration of agricultural biotechnology make? The usual view of industrial concentration is to stress the anticompetitive or monopolistic aspect. I am, however, disinclined to see monopoly in the industrial organization sense as the obvious or most critical outcome of global agricultural biotechnology consolidation, at least over the medium term (up to 10 years or so). To be sure, one cannot rule out the possibility of monopolistic outcomes if it proves to be the case that one company is able to come up with an extraordinary invention and be able to exert effective control (because of patent protection, being first to market, and not being subject to competition from substitute products). But the agricultural biotechnology industry is actually ruthlessly competitive, as evidenced by the fact that most major patents are very hotly contested, and the prices of seed companies have been bid up to extraordinary levels -- the significance of which will be discussed shortly. Also, with the possible exception of terminator and related genetic seed sterilization technologies (see Kangasniemi, 1999), it is not clear that there are any blockbuster discoveries on the horizon that would enable one particular company to become globally dominant. Put somewhat differently, all of the major players in the global agricultural biotechnology industry are employing roughly the same technologies and rolling out very similar product lines.

6.3

One useful point of departure for exploring the significance of industrial concentration in agricultural biotechnology is to note that agricultural crop biotechnology has generally not proven to be commercially viable without being able to link biotechnological innovations to in-house seed companies. For example, from the 1980s to mid-1990s DuPont stubbornly adhered to the position that the company would eschew involvement in the seed sector. But by the late 1990s DuPont came to recognize the crucial importance of seeds as the commercial vector for agricultural biotechnology innovations, and laid out nearly $8 billion for Pioneer Hi-Bred, the world's largest seed company. Many observers feel that the price DuPont paid for Pioneer was very high, and the same has been said of the price that Monsanto paid for Holden's, the U.S.' largest "foundation seed" producing firm. The reason for the very high prices paid for these firms is that there are very few highly competent independent national- or global-scale seed companies in existence, and the nature of the industry is that it is virtually impossible to createde novo a start-up seed company that will be efficient and profitable; accordingly, the asset values of the very few established seed companies that do exist have been bid up due to industry competition and because of the growing recognition that commercial viability in crop biotechnology requires control over seed marketing and pricing.

6.4

Among the most significant implications of the bidding up of seed company asset values and of the debt that has been taken on to purchase seed companies is that the dominant players in the crop GMO industry have had to set the prices of transgenic seed products to a level sufficiently high to that it makes GMO use of marginal benefit to many farmers, as suggested earlier. Thus, competition in agricultural biotechnology is ironically being manifest through higher - rather than lower - seed prices.

6.5

The agricultural biotechnology industry has gone through some radical restructuring because of a collective miscalculation regarding the timeline for commercial return. In particular, there was a huge miscalculation during the 1980s biotechnology investment boom of the time to market that would be required for major crop biotechnology products. Many companies could not survive what has turned out to be a nearly 15-year hiatus between the onset of agriculgtural biotechnology R&D and the commercial introduction of products. The premature commercialization of agricultural biotechnology has decisively shaped not only the economic structure of the industry, but also its strategies and politics. This is especially evident in the highly proactive if not aggressive posture of biotechnology industry firms toward their opponents in the U.S. which is due in substantial measure to anxiety about whether social resistance and regulatory hurdles will threaten corporate ledger sheets and decisively derail the industry's goals. The unexpectedly long time from the onset of R&D to the introduction of commercial products has very likely led some biotechnology firms to proceed with certain products with considerable liabilities (e.g., recombinant bovine somatotropin [BST]) that might otherwise not have been brought to market.

European Public Resistance to Agricultural Biotechnology: Toward a New Consumption-Driven Politics of Food?

7.1

There can be little doubt that citizens of the EU and other European countries are generally more ambivalent about agrofood biotechnologies than are Americans (see, for example, Biotechnology and the European Public Concerted Action Group, 1997). In addition, there appears to be relatively strong public approval in most European countries of the actions the EU has taken to restrict imports of GMO products and to maintain the stringent case-by-case approval process for GMO products.

7.2

There are a number of indicators that consumer resistance to GMOs is having major impacts. In April of 1999, several of the largest European grocery chains-including Tesco, Safeway, Sainsbury's, Marks and Spencer, the Co-op, and Waltrose-bowed to pressures by anti-biotechnology groups and consumers by essentially forming a GMO-free consortium, pledging that their product lines will be GMO-free. In response, a number of giant food manufacturing multinationals such as Unilever, Nestle, and Cadbury-Scheppes have made similar pledges. These food manufacturing firms are proceeding to line up contracts with producers and suppliers that can produce a GMO-free paper trail. U.S.-based fast-food multinationals in Europe such as McDonald's, KFC, and Burger King have also pledged not to sell food containing GMO ingredients.

7.3

Given the importance of European sales to U.S. food firms, a number of them have seen fit to follow suit. Baby-food manufacturers Gerber and H. J. Hines have made a commitment to using only GMO-free ingredients. A. E. Staley, the third largest U.S. corn processor, has announced that it would not accept any corn produced from varieties that are not approved by the EU. Archer Daniels Midland (ADM) immediately followed suit. Staley and ADM together account for about half of the U.S. corn processing market. And in August 1999 ADM announced that it will require its corn and soybean suppliers (mainly grain elevators) to segregate GMO crops from non-GMO crops in order to ensure its market position in EU countries. In the summer of 1999 the EU environment ministers, on the basis of the "precautionary principle" but probably consumer sentiments as well, essentially set in motion an EU moratorium on any new approvals of GMO crops.

7.4

The role that consumers might play in shaping the struggle over agricultural biotechnology is a critical sociological question. While there can be little doubt that consumer resistance to GMOs is currently playing an important role in several European countries (particularly Austria, Germany, Denmark, Netherlands, Sweden, and Switzerland, and most recently, the UK), there are several reasons why one should be skeptical that European consumer resistance will itself prove pivotal in derailing the agricultural biotechnology complex.

7.5

First, there are a great many constraints to consumer action as a vehicle of social resistance (see, for example, Schnaiberg, 1980). The staying power of consumer commitment to politically relevant purchasing is inherently problematic, particularly as factors such as convenience increasingly take precedence over other considerations in food purchasing (Tansey and Worsley, 1995). Second, consumer action depends on strong and coherent social movements to politicize issues and concerns and provide consumers with information necessary for politically relevant consumer choices. Thus, while it is generally agreed that at least 50 percent, as perhaps as much as 70 percent, of manufactured food products in the U.S. contain one or more GMO ingredients, anti-biotechnology movement organizations in the U.S. have not been willing to attempt to mobilize consumers against GMO foods. The reluctance of anti-biotechnology groups to mobilize consumers against GMO foods in the U.S. is very likely related to the fact that earlier efforts to foster consumer resistance to BST-a technology with more socioeconomic liabilities than Bt and HR crop varieties-fizzled so rapidly (Buttel, 1998).

7.6

It should also be noted that some of the firms that are ostensibly taking the lead in responding to consumer preferences for GMO-free foods are themselves agricultural biotechnology firms. Gerber, for example, is a subsidiary of Novartis, while ADM is a joint venture partner with Novartis, as will be discussed later. Novartis is thus finding it attractive to make money by simultaneously promoting agricultural biotechnology and appealing to consumers who disapprove of this technology. It is also worth mentioning that some officials of U.S.-based biotechnology firms complain privately that European biotechnology firms (and especially some European agrochemical firms that elected not to invest heavily in biotechnology) are at least implicitly encouraging public resistance to GMOs.^[7]

7.7

Perhaps the most significant constraint on consumer resistance to agricultural biotechnology is that WTO rules are clearly on the side of biotechnology firms. That is, WTO guidelines concerning non-tariff barriers to trade preclude trade restrictions that are based on the conditions of production alone. Thus, for example, WTO rules preclude import restrictions that are based solely on the a produced having been produced through genetic engineering. For trade barriers to be permissible under WTO rules, they must be based on "scientific" risk assessment evidence about risks associated with the product itself. Codex Alimentarious procedures, which are explicitly endorsed as satisfying the product-based scientific risk assessment guidelines of WTO, reinforce WTO rules on non-tariff barriers to trade. It seems likely, then, that the future role that consumers will play in opposition to agricultural biotechnology will shaped very substantially by whether global and EU trade policies in effect direct national-states to prevent consumers from being able to express their cultural preferences and political views at the grocery check-out.

Biotechnology and Trade

8.1

As the world's private and public agricultural R&D systems have become globalized and "biotechnologized," with their center of gravity now pivoting around a highly concentrated chemical-seeds-biotechnology complex dominated by seven multinational corporations, the movement of GMO materials, technologies, and products across borders becomes critical. In order for this R&D system's current structure to survive, GMO products must be permitted to move across national boundaries relatively freely, and nations must agree to recognize intellectual property restrictions of the sort that exist in the U.S. The biotechnology complex thus depends on regulatory, intellectual property, and trade "harmonization." While the regulatory, intellectual property, and trade spheres are distinct ones, during the most recent ("Uruguay") round of the General Agreement on Tariffs and Trade, all three have essentially been brought under the umbrella of the World Trade Organization (WTO) regime. That is, the WTO now sets forth requirements for regulation (i.e., that is must be "science-based") and intellectual property (i.e., that life science and other patents granted in one country must be recognized in another) as well as rules for trade itself. Thus, one of the most critical dimensions of the future of biotechnology will be its implications for trade in general, and the WTO regime in particular.

8.2

Trade phenomena have recently become a major Achilles Heel of the biotechnology industry. Perhaps the most dramatic example is that the most active milk-product trading countries (notably New Zealand and Australia) have declined to approve use of BST, at least in part out of concern that BST use could jeopardize exports at some point in the future. The United States remains essentially the only major industrial country in which BST has been approved for commercial use, and there seems to be little chance that BST will be approved by any other major dairy producing country in the foreseeable future. Second, the EU continues to ban livestock products on which genetically-engineered hormones have been used. The EU-U.S. conflict over hormones has festered repeatedly over the past few years. The U.S. has taken the EU to a WTO tribunal, which has ruled against the EU and authorized the U.S. to implement retaliatory tariffs, which are now in force. In addition, the EU continues to ban the importation of products from genetically engineered crop varieties which it has not itself approved (e.g., Bt corn), and there is a de facto ban on HR soybeans because of the fact that most European processors prefer not to buy them. The conflicts over hormones and GMO crops, along with a major EU-U.S. disagreement over banana imports into the EU, have caused some observers to speculate that a trade war is not out of the question.

8.3

What is the significance of these examples? In the case of BST, the implications are becoming relatively clear. Because the WTO formally embraced the Codex Alimentarius Commission as the arbiter of scientific risk assessments of agrofood technologies, it is clearly of immense significance that Codex Alimentarius Commission in August 1999 ruled in favor of the 1993 EU Moratorium on BST on the grounds of adverse veterinary effects, and in so doing corroborated a 1988 ruling by Health Canada which banned BST in Canada. The Codex ruling has undermined the expected action by the U.S. to challenge the 1993 EU moratorium on BST before the WTO.^[8] The ruling is also the first large-scale science-based rejection of genetically modified food. Given Codex's ruling and the resistance to BST in Europe, it seems unlikely that BST will ever be widely used in countries other than the U.S. which are major actors in international trade in dairy products. Because the U.S. exports relatively little of the dairy products it produces, trade considerations are unlikely to affect BST use in the U.S.

8.4

It should be stressed, however, that despite the symbolic and economic importance of BST, the most crucial trade, regulatory, and social resistance issues relating to agricultural biotechnology over the long term are those that pertain to GMO crop biotechnologies. Investments in plant biotechnology are many fold those in BST and related recombinant animal hormone products. Agricultural biotechnology will be decisively crippled if resistance to GMO crop varieties - particularly to GMO varieties of all types, rather than to particular products such as BST or BT corn with specific liabilities - escalates.

8.5

In the emerging WTO environment of the late 1990s, the future of agricultural biotechnology and trade will likely be heavily shaped by the dynamics within the EU, and by relationships between the EU and the WTO regime. To some extent, EU (and Japanese) ambivalence toward GMOs has already contributed to what is effectively a circumscription of the powers of WTO by having exposed the ways in which WTO as presently constituted has significant weaknesses in its enforcement powers. The U.S. agenda for the next WTO round will include a number of measures - including bolstering WTO's enforcement powers in relation to agricultural trade and agricultural commodity programs - that are essentially aimed at bringing the EU to heel. More generally, though, it is by no means clear that the global community is prepared for a new round of WTO which would involve either significant strengthening of WTO's enforcement powers or an expanded role for intellectual property protections of biotechnology products. The upcoming round will be particularly instructive as to whether EU resistance to GMO food imports reflects a more fundamental ambivalence toward the WTO.

8.6

The EU is a very distinctive regime as far as international trade is concerned. The EU is, on one hand, a free trade area, and the existence of the EU is a recognition that trade (at least among relative equals) can be a good thing. On the other hand, the EU departs from all the other global trading regimes by having a democratic mechanism (the European Parliament), by having most of the world's social-democracies as its members, and by having such a homogenous set of member states. The fact that the EU has a democratic aspect and its member-states are a relatively homogenous lot in which social-democratic practices remain largely intact has had much to do with the EU's cautious posture toward biotechnology and WTO trade rules. In addition, the EU nations are not as highly advantaged as is the U.S. by liberalization of trade in services or WTO protections of intellectual property, two of the major U.S. goals for the Uruguay Round that were included in the WTO agreement. The EU is also not an agrarian-export-oriented economic zone in a position to benefit from the agricultural trade liberalization provisions of the Uruguay Round. The critical long-term issue is whether GMO (and agricultural) politics might play some role in catalyzing the major European nation-states to be willing to support the roll-back of some of the current provisions of WTO, especially of provisions that relate to GMOs (and possibly provisions relating to commodity programs and domestic agricultural protection).

Toward Second-Generation Crop Biotechnology: The Social Significance of "Value-Enhanced Crops"

9.1

Much of the preceding discussion of the politics of GMOs is based on the notion that products such as Bt and HR crop varieties will comprise the backbone of the product lines of biotechnology multinationals for the foreseeable future. It should be stressed, however, that most firms in the agricultural crop biotechnology industry are already beginning to look beyond the first generation of biotechnology products such as Bt and HR crops. The major players in the industry are now actively exploring the possibility that the economic rents that can be appropriated from "quality-trait" GMO varieties may be greater than those possible from input-trait varieties. Not only are the biotechnology industry leaders strongly committed to value-enhanced crops, but they are also expressing this interest through developing vertical integration arrangements through joint ventures with large multinational processing firms (e.g., Monsanto with Cargill and Novartis with Archer Daniels Midland).

9.2

Value-enhanced crops are those that contain single-gene traits (or a small number of engineered genes) which are aimed at changing the characteristics of the crop rather than at affecting the inputs to be used in crop production. The reasons for the growing corporate attention to value-enhanced crops are four-fold: (1) The rents to be appropriated from value-enhanced crops are estimated to be as large or perhaps larger than those available from the first generation of crop variety products. (2) There is generally less likelihood of negative environmental impacts with value-enhanced crops than with input-trait GMOs, and thus the productive lifetimes of value-enhance crops could be longer than with input-trait characters. (3) Value-enhanced crops may indeed have something to offer the consumer.^[9] (4) Social resistance to value-enhanced crops is likely to be less than for Bt, HR, and related GMO varieties (not to mention BST).

9.3

Some examples of value-enhanced crops include the following. High oleic soybeans (which contain less saturated fat and are more stable under high temperatures) are near commercialization. Soybeans with improved animal nutrition (higher protein content and more balanced amino acid content) are also near commercialization. Improved food-quality soybeans (better taste, better digestibility) are now in production; 25,000 acres of these varieties were produced in 1998. New varieties of canola have been bred for superior oil qualities for several years; high lauric acid canola varieties have been grown in Canada since 1995. High lauric acid canola makes the crop much more valuable for producing soaps and detergents. High-oil corn, which is more valuable than commodity corn as livestock feed, has been developed through conventional breeding, though GMO versions are under development. High-oil corn currently receives a $30/bushel premium over commodity corn, so it is potentially quite attractive to corn producers. In addition, lip service is increasingly being paid to "nutraceuticals" and "functional foods," though these product areas are not as well developed as those just described (see Riley and Hoffman, 1999). As is apparent in the case of several of the preceding examples (e.g., high-oil corn, high-lauric-acid canola), however, while much is often made of how the second generation of agricultural biotechnology R&D is geared to the development of products that will attract the interest of individual consumers, the majority of value-enhanced crops now in the pipeline are almost certain to be better able to create value for processors rather than for individual consumers.

9.4

Value-enhanced crops raise a number of interesting issues about how agrofood systems will be organized in the future. How will prices of crop varieties be determined and rents be appropriated? How will handling, processing, distribution, and trade in grains and other products be undertaken?

9.5

In answering these questions it is useful to begin by noting that the very structure of mainstream Western agriculture has evolved toward technological standardization and homogenization. That is, relatively generic inputs (e.g., fertilizers, pesticides, and fertilizer-responsive varieties) have come to be employed over large acreages, and the outputs of farming have become transformed into relatively homogeneous commodity products. Crop handling and marketing channels have evolved in tandem. Crop handling and marketing based on large-scale national and global distribution of homogeneous products involve intermingling grains and other agriculturally produced raw materials in storage, transportation, processing, and marketing facilities along virtually the entire length of the commodity chain. Today, most crop commodities remain handled in the most Fordist of ways -- huge railroad or barge convoys, big ships, and large-scale processing in huge factories. In order for high-value crops to become commercially viable, however, handling and marketing channels almost always need to be substantially restructured because the high-value product has to be segregated along the entire commodity chain. The current marketing structure, however, has a great deal of institutional and infrastructural flexibility which makes it very difficult and expensive to segregate high-value materials.

9.6

To some degree these institutional and infrastructural problems can be dealt with through new technologies for separate handling such as dedicated rail cars, barges, and storage facilities. Probably the most significant implication of high value crops, though, can be revealed through the observation that ADM and Cargill appear to be putting into place arrangements for vertical integration of production and marketing of value-enhanced GMO crops with Novartis and Monsanto, respectively. Cargill, for example, has begun to orient its seed division to establishing contractual integration. Cargill provides bins for handling value-added soybeans and helps its seed customers to find markets. There is every indication is that Cargill itself tends to become the first handler of high-value crops in order to capture as much of the economic rents as possible. Monsanto is a joint venture partner with Cargill and provides much of the genetics used in Cargill's value-added soybean varieties.

9.7

Thus, a shift toward quality-trait biotechnology could be the new frontier of contract farming in the industrial countries. The significance of value-enhanced GMO varieties in catalyzing vertical integration in crop agriculture is two-fold. On one hand, it has heretofore been the case that field crop commodities -- corn, soybeans, wheat, and so on -- have been among the major vestiges of family farming in North America and elsewhere (Mann, 1990; Friedmann, 1990). The family-farming character of field crop production has persisted due to the fact that there have been social and technical barriers to corporate appropriation of the process of producing field crops (see also Goodman et al., 1987). Over the past three or four decades, however, contractual integration has become the most significant lever for extending corporate intervention in the agricultural production process, and as a result contractual integration has become the most powerful motor of structural change in U.S. farming. This has particularly been the case in the livestock sectors, which have witnessed startling increases in vertical integration, scale of production, and "industrialization" over the past two to three decades (Jackson-Smith and Buttel, 1998; Welsh, 1996; Thu and Durrenberger, 1998). Much of the reason for rapid industrialization of U.S. livestock production having resulted from vertical integration is that there tends to be a strong contractor preference for large producing units (Winson, 1990; Welsh, 1996). Processors tend to find it more convenient to work with a few large farmers than with a large number of small farmers. Contractual integration involving large production units also tends to create the conditions that make possible a race-to-the-bottom cost competitiveness (Welsh, 1996), as has recently been the case in U.S. hog production. Thus, while the second generation of agricultural biotechnology products may have more to offer to the consumer and be more environmentally benign than the first generation of input-trait products, the development of value-enhanced crops seems likely to accelerate the industrialization of farming and the decline of family farming.

Some Concluding Reflections on Agricultural Biotechnology in the Twenty-First Century

10.1

I began this paper by portraying the current situation in agricultural biotechnology as one of an irresistible force encountering an immovable object. Many of the comments in the paper have implied the vulnerability of the biotechnology industry to social resistance and other challenges. While there is an element of truth to this notion of vulnerability, it should be noted as well that it is exceedingly unlikely that social resistance will precipitate the demise of the agricultural biotechnology industry or of public biotechnology research. One of the reasons - the overwhelming commitment of the bulk of the world's mainstream agricultural R&D and agrofood organizations to this technology - was noted earlier. Another important reason is that biomedical applications of biotechnology have very little opposition, and will continue to propel forward investments in the biotechnology industry as a whole. A related reason for suspecting that anti-biotechnology forces will have difficulty prevailing is the support that this technology tends to enjoy across quite broad quarters of the scientific community. Even agricultural scientists of progressive persuasions tend believe that the tools of genetic engineering and molecular genetics will ultimately lead to positive outcomes in the realms of food and agriculture, and accordingly they are reluctant to lend their voices to opposition to agricultural biotechnology.

10.2

If agricultural biotechnology is, realistically speaking, here to stay, will it become as routinized and accepted as, say, hybrid corn was in the 1950s? I doubt that this will be the case. Agricultural biotechnology, I would argue, involves some significant contradictions that will affect the social relations of agricultural R&D for decades to come.

10.3

One of the most significant contradictions of agricultural biotechnology is that its rise, and the research priorities that it has been used to pursue, has been fundamentally shaped by the patent system and related systems of intellectual property restrictions. The funneling of R&D and technology transfer practices into narrow areas due to patenting considerations and the unexpectedly long lag from R&D to product introduction has led to a rush to commercialize products such as BST and input-trait crops which have had a number of social and environmental shortcomings. Even so, intellectual property protection is chaotic and unpredictable, and intellectual property protection of genes, plant parts, and varieties generates its own opposition. Ultimately, though, the agricultural R&D establishment will have to reckon with the fact that there is a fundamental conflict between the use of the property rights system to encourage innovation and the social objectives of rapid and equitable dissemination of new technologies.

10.4

Another important contradiction of agricultural biotechnology is that its tools (RFLP, cloning, gene sequencing) are increasingly serving to undermine the biological patent of hybridization, the historically most significant means of protection of private property in crop varieties (Kloppenburg, 1988). Hybridization was once a very effective means of protecting trade secrets (such as the ancestry of hybrids) and as a vehicle for creating a seed market (by preventing farmers from saving their own seeds). Hybridization technology was also accessible to relatively small seed companies. But since molecular methods can be employed to identify genes, understand biological mechanisms, and reproduce biological materials, hybridization has decreased utility for protecting intellectual property. Biotechnology firms are now obliged to allocate substantial resources to acquiring, protecting, and contesting patents and to preventing farmers from saving seeds. Increasingly, the resources needed to protect genes and varieties through the patent system require resources beyond the reach of small seed companies.

10.5

Some of the measures taken by large multinationals to protect their intellectual property and protect seed markets have been controversial, and are likely to remain so. For example, a major U.S. biotechnology-seed company has occasionally hired private detectives to spy on customers (farmers) to ensure they comply with prohibitions against saving seeds, and has filed lawsuits against farmers. The most interesting and socially significant manifestation of the imperative to prevent farmers from saving their own seeds, however, is the development of "terminator" and related genetic seed sterilization technologies.

10.6

The development of terminator technology, which renders grain sterile and unusable as seed, has generated an unprecentedly broad condemnation of the priorities of the commercial agricultural biotechnology industry, and also condemnation of the U.S. Department of Agriculture's Agricultural Research Service (ARS) for developing a technology that has such an exclusive pattern of benefits. Genetic seed sterilization technologies have been a huge public relations disaster for ARS and the biotechnology-seed industry as a whole. Nonetheless, there can be little doubt that the nature of the biotechnology industry today-very high R&D costs, the high costs of entering the seed industry, the uncertain status of patent protection of crops, and social resistance which limits adoption of and trade in GMO products-has made genetic seed sterilization a logical R&D direction, if not an imperative given the economics of the industry. Seed sterilization technology, however, is likely to permanently alter the perceptions of farmers and citizens toward seed companies, and toward the public component of the agricultural research system as well.

10.7

Finally, there is general agreement that the tools of biotechnology will not be efficacious in raising crop yield ceilings for at least a decade and probably much longer (Mann, 1999). Though many observers of agricultural research in the developed world might agree that R&D ought to emphasize reducing inputs (especially chemicals) rather than increasing output (which will only exacerbate declining commodity prices), the likelihood that agricultural biotechnology research will have a limited effect on yields and output will have significant consequences. Ideologically, a decade or two of stagnant yields will undermine the productivist ideology that has undergirded agricultural research for most of the twentieth century. In addition, the inability to generate sustainable yield increases will have serious food security repercussions in the developing world.

10.8

In sum, the rise of agricultural biotechnology under the institutional conditions of the late twentieth century (global neoliberalism, fiscal austerity, WTO, and the declining commitment to foreign aid and international agricultural assistance) is leading to a sea change in public and private agricultural research institutions. Agricultural biotechnology seems likely to remain contested terrain for years to come.

10.9

While the biotechnology complex has very considerable power and momentum, the opponents of the technology will have an influence on the directions that agricultural research and technology development will take. Opponents of the technology may be able to play a considerable role in maintaining an independent public research system where non-biotechnology approaches can flourish. The critics of the technology will also play an important role in orienting a significant share of public sector biotechnology research to public-goods goals such as development of non-chemical-dependent and salt-tolerant crop varieties.

Notes

¹Note that while we are now well down a biotechnology path, it should be stressed as well that in principle there is no single biotechnology path (though this point is typically denied by both sides to the agricultural biotechnology debate). Thus, for example, we can note that beta-carotine-engineered rice varieties (Malakoff, 1999) and salt-tolerant crop varieties (Frommer et al., 1999) are transgenic crop variety products which promise to have very positive social impacts. It is also worth stressing that these two types of transgenic crop varieties were developed in public research institutions and were not aimed at securing patent protection and royalty income.

²The data in this section are derived from James (1988).

³Note that the Losey et al. (1999) study has attracted considerable criticism from entomologists. One of the most biting criticisms has come from Losey's Cornell University Department of Entomology colleague, Anthony M. Shelton (see Shelton and Rousch, 1999).

⁴As will be stressed later, equally devastating news to agricultural biotechnology more generally was the August 1999 decision by the Codex Alimentarius Commission to uphold the EU's 1993 moratorium on commercial utilization of recombinant bovine growth morning (rBGH).

⁵Note that the enormously controversial Delta and Pine Land/Monsanto "terminator" technology involves "engineering" crop plants to contain three separate novel genes. The point still remains, however, that genetic engineering techniques are still unable to influence complex polygenic traits such as photosynthetic capacity (Mann, 1999).

⁶The University of Wisconsin's Program on Agricultural Technology Studies has collected some related data among a random sample of Wisconsin farmers on the use of GMO crop variety products during the 1998 growing season. These Wisconsin data are largely consistent with U.S. national data on the extent of adoption (e.g., 19 percent adoption of Bt corn in Wisconsin versus about 25 percent for the United States). In addition, data on the performance of HR soybean varieties were collected. The producer data for herbicide resistant soybeans shows that the performance of these transgenic crop varieties is quite mixed. Farmers tend to report slightly increased yields and reduced chemical costs, but also tend to experience higher overall input costs due to the higher price of GMO seed varieties. The farmer respondents were almost equally divided as to whether or not their per acre income had increased as a result of using HR soybean varieties (Buttel et al., 2000).

⁷If an agrochemical company lacks a biotechnology division and is unable to link its chemicals with seeds, the success of agricultural biotechnology will mean that this company can expect to lose market share to the integrated biotechnology-chemical-seed companies.

⁸Many observers of Codex Alimentarius proceedings have noted that U.S. has been losing influence in Codex since early 1999 because of the perception that the U.S. government and many U.S.-based firms tend to take extreme or inflexible positions on regulatory issues. In particular, while the EU has tried to forge a compromise on GMOs (such as expedited approval of GMO foods in exchange for U.S. acceptance of labeling of GMO foods), the U.S.' Food and Drug Administration has blocked GMO labeling. The most recent development, however, is that the U.S. government (or at least its Secretary of Agriculture, Dan Glickman) has come to recognize that its refusal to permit labeling will prejudice access by American firms to the European market.

⁹Note that while input-trait GMO varieties could conceivably lead to lower consumer food prices, there are several reasons for doubting that this will be the case. First, as noted earlier, the performance of GMOs has been quite variable, suggesting that there is no strong tendency toward reduced average production costs. Second, raw food commodities have become such as small component of the retail price of food so that even quite significant decreases in food commodity production costs will tend not to have much of an impact on retail food prices (Tansey and Worsley, 1995).

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Appendix A

Major Research Resources and Data Sources Available on the Internet

Periodicals

Biotechnology and Development Monitor (www.pscw.uva.nl/monitor)

Diversity (www.amseed.com/div)

Seedling (www.grain.org/seedling.htm)

Organizations

Biotechnology Information Resource (VBIC) website, National Agricultural Library, U.S. Department of Agriculture (www.nal.usda.gov/bic)

Consumers Union (www.consumersunion.org/food/food.htm)

Center for the Application of Molecular Biology to International Agriculture (www.cambia.org.au/main/links.htm)

Information Systems for Biotechnology (www.nbiap.vt.edu/indexmain.htm)

Rural Advancement Fund International (www.rafi.org)

Agricultural Biotechnology Newspage (www.newspage.com/browse/)

Union of Concerned Scientists (www.ucsusa.org)

Council for Responsible Genetics (www.gene-watch.org)

Greenpeace (www.greenpeace.org/~geneng/)

Copyright Sociological Research Online, 1999