News about Testing, Segregation & Identity Preservation from the mouths of seed companies, grain trade & others

Testing is possible. Monsanto does it in the Southern producer countries

“Monsanto established a system in which more than 95% of the grain elevators in two Southern Brazil states (Rio Grande de Sul and Santa Catarina) test the genetics of soyabean that pass through for the purpose of Monsanto's traits. If a trait is detected, the elevator must share a technology fee with Monsanto. By all accounts this system has been working well, and Monsanto has begun to receive checks. For the past year, management reported that the system was breakeven due to up-front costs for training elevator personnel and establishing communications with growers. We project this system will add around $0.10-0.15 per share of incremental earnings for Monsanto in fiscal 2005.”
- page 12 in UBS Investment Research on Monsanto, 22 November 2004

Testing is possible. Monsanto detains shipments until tested

Argentine officials, Idigoras [Argentina's agricultural attache to the E.U.] said, are giving importers “technical and legal” assistance to fight Monsanto's claim that importers ought to pay a fee when buying Argentine soybeans. Monsanto wants the fee - $15 per metric ton – to compensate for the company's inability to collect royalties in Argentina.
Monsanto's actions [or rather counter strategy to this] recently led to the detainment of three shipments to Spain and England. Idigoras expects another ship to be detained in Germany within the next few days.

“Monsanto has changed its strategy,” Idigoras said. “Last year it only asked for test samples. Now it is seeking to have the cargo of these shipments detained until it can be establish that they contain products derived from Monsanto seeds. This is generating costs and uncertainty for importers.”
- from 'Argentina Helping EU Soy Importers Fight Monsanto Lawsuits', Dow Jones Newswires, 9 Feb 2006

Segregation is possible and not disruptive if done on a larger scale

“Segregation of non-biotech grains and oilseeds is essentially an extension of the handling process for speciality grains and oilseeds, which has been in place for some time.”

The challenges of changing from a commodity system to a more specialized system “do not imply that disarray would occur in the grain marketing system if non-biotech crops were handled on a larger scale”

- USDA-ERS 2000 ‘Segregating non-biotech crops: what would it cost?’

Segregation gives premiums on conventional, discounts on GMOs

A new survey of one thousand, one hundred ninety-four (1,194) grain elevators across the United States, conducted by the American Corn Growers Foundation (ACGF) Farmer Choice - Customer First program found that nearly one-quarter (23.7%) reported that they are requiring segregation of biotech corn from conventional corn varieties. Over twelve percent (12.6%) reported offering premiums for non-GMO, conventional corn varieties over GMO biotech varieties. The premiums reported range from five to thirty cents per bushel. Nine elevators reported that they are discounting GMO corn.

- American Corn Growers Foundation, 2004, ‘New National Survey of Over One Thousand Grain Elevators Shows Twenty-Four Percent Require GMO Corn Variety Segregation. Twelve Percent Report Offering Premiums for Non-GMO Corn.’

Companies know the above and are planning accordingly

“Our IP has grown from nothing three years ago to a fairly good size today. Within three to five years, half our total grain usage will be identity preserved.”

- Ron Olson, General Mills, from page 7 of the proceedings from a workshop sponsored by Pew Initiative on Food and Biotechnology and Economic Research Service of the U.S. Department of Agriculture, ‘Knowing where it’s going: Bringing food to market in the age of genetically modified crops’, September 1l, 2001,

“In terms of the export market we see approximately three percent being in some form or fashion identity preservation. I see that increasing to as much as 30 percent.”

“The timing is uncertain. The certainty is in the fact that it will happen. This transformation of the commodity market into a variety of different segregated markets will occur.”

- Ruth Kimmelshue, Cargill, from page 12 of the proceedings from a workshop sponsored by Pew Initiative on Food and Biotechnology and Economic Research Service of the U.S. Department of Agriculture, ‘Knowing where it’s going: Bringing food to market in the age of genetically modified crops’, September 1l, 2001,

He said that the company is moving toward segregation and identity preservation for complex reasons. “It is not simply driven by GM/non-GM, but is part of an ongoing drive for efficiency, testing and brand protection,” he said.

- Jim Houser, Pioneer Quality Crop Systems, Pioneer Hi-Bred (a Dupont company), from page 19 of the proceedings from a workshop sponsored by Pew Initiative on Food and Biotechnology and Economic Research Service of the U.S. Department of Agriculture, ‘Knowing where it’s going: Bringing food to market in the age of genetically modified crops’, September 1l, 2001,

Segregation/Identity Preservation gives competitive advantage

Substantial benefits [of Identity Preservation systems] also lay ahead, for both producers and companies in a position to capture added value through speciality traits. “Technology is allowing industry to offer, and consumers to demand, ever increasing value-added qualities without relaxing expectations of quality and performance,” said Ruth Kimmelshue, team leader for livestock solutions at Cargill, an international marketer, processor and distributor of agriculture and food products. “It is through this differentiation that U.S. agribusiness will be able to maintain its competitive advantage in the marketplace.”

- from Page 13of the proceedings from a workshop sponsored by Pew Initiative on Food and Biotechnology and Economic Research Service of the U.S. Department of Agriculture, ‘Knowing where it’s going: Bringing food to market in the age of genetically modified crops’, September 1l, 2001,

Identity preservation protects against liability claims and loss of consumer confidence

Failure of IP systems at any stage could cause a co-mingling of products in the food supply. This could result in product mislabeling, thus also exposing food companies to lawsuits. A failure to successfully segregate GM products could also open IP providers and testing services to liability, as well as risking the loss of consumer confidence.

- from Page 19 of the proceedings from a workshop sponsored by Pew Initiative on Food and Biotechnology and Economic Research Service of the U.S. Department of Agriculture, ‘Knowing where it’s going: Bringing food to market in the age of genetically modified crops’, September 1l, 2001,

High levels of purity are possible with small changes in infrastructure

These estimates of current seed purity imply that commingling of non-GM commercial seed by GM seed is not so large as to necessarily make infeasible non-GMO segregation and identity preservation…

…But without a radical overhaul, can the US grain handling system, with its current storage and transportation facilities, maintain segregation and identity preservation of non-GM grains to the degree necessary to satisfy the current EU required non-GMO purity level of 99%? Recent observations suggest that the answer to this question is yes for soybeans. The increased handling of specialty grains has led to changes in US grain handling infrastructure, but these changes have been relatively small. Exporters have been sending specialty soybeans to Japan for years, and for a premium have been willing and able to maintain segregation and preserve identity… Currently for specialty corn (e.g., high-oil corn), even with the difficulties brought on by cross-pollination, the grain handling infrastructure has indeed been able to meet high levels of purity, without taking radical measures such as organizing and enforcing "isolation zones" among large numbers of farmers of high-oil corn.

- David S. Bullock, Marion Desquilbet and Elisavet I. Nitsi, ‘The Economics of Non-GMO Segregation and Identity Preservation’, November 2000,

Testing and segregations systems are possible at low cost

There are several implications from these results. First, a system based on testing and segregation can very efficiently assure buyers of GM content at a quite low cost. While nil tolerance cannot be achieved through a system based on testing, the GM content can reasonably be assured at levels of .5 percent and 1 percent. Second, the cost of a system based on optimal testing and segregation inclusive of a risk premium are much less than most systems that have been proposed on IP and other means to control GM content.

- William Wilson and Bruce Dahl, ‘The logistical costs of marketing identity preserved GM wheat’, North Dakota State University, paper presented at the Symposium "Product Differentiation and Market Segmentation in Grains and Oilseeds: Implications for Industry in Transition", Sponsored by Economic Research Service, USDA and The Farm Foundation, Washington, DC, January 27-28, 2003,

Compiled by Third World Network, with the help of Greenpeace and Ecoropa