Dave Hartley
http://www.Asheville-Computer.com
http://www.ioa.com/~davehart
Wednesday August 25, 1999
Paul Brown and John Vidal
Europe's biggest bank has advised the world's largest investors to sell their shares in leading companies involved in the development of genetically modified organisms because consumers do not want to buy their products.
In a report sent to several thousand of the world's large institutional investors, including British pension funds, Deutsche Bank says that "growing negative sentiment" is creating problems for the leading companies, including Monsanto and Novartis.
"We note that Monsanto has spent more than $1.5m (#1m) to persuade English consumers of the rectitude of their position, but alas, to no avail. Monsanto is little match for Prince Charles, an anti-GMO advocate, when it comes to sensitivity for the English people's desires," says the report.
"More broadly speaking, it appears the food companies, retailers, grain processors, and governments are sending a signal to the seed producers that 'we are not ready for GMOs'."
Since the report was circulated to investors, shares in companies named have fallen against a rising trend in stock markets generally and the frenzy to takeover seed companies has stopped. In the six months to yesterday Monsanto's stocks had fallen 11%, and Delta & Pine, a seed company that owns the terminator gene, which Monsanto is taking over, has lost 18% of its value.
The Deutsche Bank's Washington analysts, Frank Mitsch and Jennifer Mitchell, say it is nine months since they first voiced their concerns that the biotech industry was "going the way of the nuclear industry in this country, but we count ourselves surprised at how rapidly this forecast appears to be playing out.
"Domestic concerns regarding ag-biotechnology are clearly on the rise. For the most part, though, it has not gotten the attention of the ordinary US citizen, but when it does - look out."
Deutsche Bank's first research report, dated May 21 and entitled GMOs Are Dead, said: "We predict that GMOs, once perceived as a bull case for this sector, will now be perceived as a pariah.
"The message is a scary one - increasingly, GMOs are, or in our opinion, becoming a liability to farmers," it adds. Non-GMO grains were already gaining a premium price which would, if the trend continued, far outweigh any economic benefit in growing GMOs.
The latest report, published last month under the heading Ag Biotech: Thanks, But No Thanks, says: "GMOs are being demonised by their opponents. What food manufacturer will 'take a bullet' for GMO corn in the face of such controversy?"
GM grains would have to be sold at a discount. "Farmers who planted (Monsanto's) Roundup Ready soya could end up regretting it."
It could become an "earnings nightmare" for Pioneer Hi-Bred (a company due to be taken over by the chemicals giant DuPont) and for Monsanto which is buying Delta & Pine, a stock, the bank says, not worth holding on to.
The concerns of European consumers are real, concludes the report. "European consumers have recently been through the mad cow crisis, the French Aids-tainted blood crisis, the Dutch pig plague crisis, the Belgium chicken dioxin crisis, the Belgian Coca-Cola crisis, etc. Therefore hearing from unsophisticated Americans that their fears are unfounded may not be the best way of proceeding."
The report is a serious embarrassment to the Labour party because its pension fund has large investments in two leading GM companies, AstraZeneca and Novartis, both of which are reportedly considering selling their GM divisions after years of heavy investments but few returns.
Following European uproar over the crops, there has been a significant official cooling in the US. The US government and the biotech industry are preparing for a consumer and media backlash and the agriculture secretary, Dan Glickman, has told companies not to take consumers for granted.
The report coincides with growing official unease about claims made for GM crops. With the market for GM in Europe contracting as food processors turn their back on the products, Mr Glickman warned farmers they could be left with unwanted crops, and that small farmers could become "serfs on the land".
Recent US government research has shown that GM crops of maize, soya and cotton do not automatically produce greater yields or lower use of pesticides.
Sue Mayer of Genewatch said: "This shows the global impact of the concerns of pressure groups on this issue."
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August 25, 1999
Daily Mail via NewsEdge Corporation : THE City has turned against 'Frankenstein Foods' with a warning from a leading investment bank that genetically modified crops have no future.
Deutsche Bank has produced a report for investors advising them to steer clear of companies associated with GM crops.
The influential report is a major blow to an enormously powerful industry which has previously tried to bully governments and consumers into accepting the tainted technology. The bank's report concludes simply that 'GM organisms are dead' because consumers are suspicious about their impact on human health and the environment.
It warns that farmers who plant GM crops could lose money, that the stock market value of GM companies could collapse and that food companies will not risk using such ingredients. The report admits that GM-free crops are already being sold at a higher price than their GM equivalent, which will encourage farmers to steer clear of the technology. ...
The report points out the saying they can be found in everything from soft drinks - with GM corn syrup used in some products - through to salads, with GM soya oil in the dressing. [Image] But the report warns this could be about to change: 'Perhaps we don't yet fully realise it, but genetically modified organisms have just crossed the line. Today the term GM has become a liability.
'We predict that GM, once perceived as the driver of the bull case for this sector, will now be perceived as a pariah.'
It adds: 'The message is a scary one - increasingly, GM organisms are, in our opinion, becoming a liability to farmers.'
Biotech companies and farmers who plant GM crops could be faced with expensive long-running court cases and 'a legal mess' if their pollen pollutes neighbouring fields, says the report.
More than 34 GM crops have so far been approved in the US, around 30 in Canada, more than 20 in Japan and around nine in the EU. But retailers and food manufacturers in Britain ranging from Marks & Spencer to Sainsbury's, Unilever and Nestle have all turned their backs on GM ingredients in response to consumer fears.
The Deutsche Bank report, written by Tim Ramey, who is based in the US, says companies around the world are expected to take the same path.
'Expect virtually all others to follow, because the anti-GM crowd will threaten to stigmatise, demonise and boycott those that don't fall into line,' it says.
The report likens GM crops to nuclear power, in that environmental arguments can be made for both but there is little chance that either will win consumer support.
Attempts to force GM crops on to Europe seem certain to founder because of the arrival of cheap and easy tests which will allow buyers to identify and refuse them, it suggests. ...
British GM critic Jonathan Matthews, who has campaigned against the technology, said: 'This is a hugely significant contribution.
'The fact that a powerful City institution has realised that GM has no future because it has been rejected by consumers will send a loud message to the biotech industry.
'Without the support of shareholders, this industry has no future.'
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next article posted by "Maynard S. Clark" <[EMAIL PROTECTED]>
WASHINGTON, August 25 /PRNewswire/ -- To ease the dilemma over the uncertainly caused by genetically modified organisms (GMO), the American Corn Growers Association (ACGA) is proposing that farmers should look at the option of planting non-GMO crops if certain questions are not answered.
This is not an issue over the health or scientific effects of GMOs. It's an issue over production agriculture's inability to answer the many questions that surround this controversial issue.
"GMOs have become the albatross around the neck of farmers on issues of trade, labeling, testing, certification, segregation, market availability and agribusiness concentration. Until all these issues are answered, it is best for production agriculture to examine alternatives to planting GMOs," said Gary Goldberg, Chief Executive Officer of the ACGA.
There are many uncertainties facing farmers. Historically low prices brought about by overproduction have made the future unclear. Adding to this uncertainty is unfair to producers. Therefore, the ACGA is calling on the following questions to be addressed:
-- How do we export GMO grains to unwilling foreign customers and will the USDA encourage the sale of GMO free crops?
-- Who will be responsible for maintaining separate channels for GMO crops and assuring the integrity of non-GMO crops? Will farmers who plant traditional (non-GMO) varieties be burdened with testing and other costs associated with segregation or identity preservation?
-- If testing is needed, who will do the testing, can the testing be done in the field, and how much will the tests costs?
-- How far do GMO and GMO free grains have to be planted from each other to prevent cross-pollination?
-- Since GMO fields can cross-pollinate with non-GMO fields, will GMO growers be required to plant buffer zones? How large should the buffer zones be?
-- Will biotech companies be liable for contamination of non-GMO crops caused by cross-pollination?
-- Will there be the need for liability waivers between neighbors to prevent legal ramifications in the event of one neighbor not knowing what another neighbor is planting?
-- How does a grain elevator plan to segregate GMO from GMO free and will there be a price differential?
-- What kind of certification procedure will be needed for the elevator and will each elevator have its own certification form?
-- Should USDA come forward with a universal certification process that would be accepted by all grain elevators?
-- How does the monopolistic practice of a handful of companies controlling the entire GMO process effect the future of U.S. food production?
-- How would labeling of GMO products fall within the GATT framework?
-- Are the supposedly higher yields of GMOs marketable in a climate that already has overproduction and oversupply?
"Farmers are caught in the middle of this dispute between grain exporters, foreign buyers, seed companies, local grain elevators and different governments. The ACGA feels it is best for producers to consider alternatives for this upcoming planting season until these many questions are answered," concluded Goldberg.
The ACGA calls on seed companies to make sure that an adequate supply of GMO free seed is available to farmers for the 2000 planting season and that no undue pressure to plant GMOs is placed upon a producer by his or her seed company.
SOURCE American Corn Growers Association
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