July 29, 2004

By Shelley L. Hurt

Americans are technological optimists and for good reason. Over the past 100 years, technology has enriched American society and economy in countless ways, spurring improvements in standards of living and longer life expectancy. But does Americans’ optimism color their view of technology’s role in remedying pressing social problems? This question looms large over one of the most controversial debates raging throughout the world today: whether or not agricultural biotechnology, more commonly referred to as genetically modified organisms (GMOs), will solve world hunger.

Despite a booming agribusiness industry and world food surpluses, food insecurity
remains a persistent global problem. According to a November 2003 United
Nations Food and Agriculture Organization (FAO) report, chronic hunger increased
significantly during the late 1990s to over 842 million persons worldwide. This
unexpected increase prompted the FAO to declare that it would be nearly impossible to achieve the UN Millennium Development goal of halving this number by the year 2015.

World hunger is not just an ethical issue; when combined with poverty and corruption, it can produce state failure. As the 2002 National Security Strategy of the United States notes, “weak states” are potential breeding grounds for terrorism and a host of other international problems.

While acknowledging these connections, American officials are on the front
lines in promoting agricultural biotechnology as a critical component of a broadbased solution. Indeed, President Bush, on the heels of his trip to Africa in the summer of 2003, asserted that African nations must accept “new high-yield bio-tech crops and unleash the power of markets to dramatically increase agricultural productivity” as the best hope for feeding the hungry continent.1 Such enthusiasm
notwithstanding, understanding the causes of hunger is the first step in judging
whether or not agricultural biotechnology will solve this seemingly intractable
problem.

Beginning with Thomas Malthus two centuries ago, conventional wisdom has
wrongly assumed that hunger occurs because production cannot keep up with population growth. In fact, the Institute for Food and Development Policy shows that during the past 35 years “per capita food production has outstripped population
growth by 15 percent”, and the UN’s FAO states that the world has produced enough food to feed the growing world population since 1974.2 So why do
hunger and malnutrition persist?

Grain elevator, Malta. Il.

Simply stated, over three billion people worldwide live on less than $2 per day,
which is not enough to afford adequate food. Poverty, not food shortages, is the
primary cause of hunger today. With these considerations in mind, is agricultural biotechnology the answer to the problem of hunger? Proponents argue that agricultural biotechnology can alleviate hunger through the development of crops that can withstand insects, drought, and other vagaries of the natural world. Opponents argue that genetically modified seeds threaten to eradicate biodiversity by imposing industrialized monoculture crops on farmers. While both proponents and opponents have empirical evidence to back up their respective claims, neither
addresses the central problem with this new technology: intellectual property
rights.

Intellectual property rights play a fundamental role in the development and future direction of genetically modified organisms. To understand why, it is important first to distinguish genetically modified organisms from traditional hybrid crops. Agricultural biotechnology manipulates genetic traits by transferring genes between different species to confer a desirable trait, such as herbicide or pest resistance. Hence, biotechnological techniques manipulate seeds at the molecular level, within the structure of DNA. In contrast, traditional hybridization improves seed varieties by transferring favorable genes through crossbreeding within the same species.

Intellectual property rights add value to agricultural biotechnology research by allowing the patenting of the technical process as well as the end product. After the Supreme Court ruled in Diamond v. Chakrabarty (1980) 5 to 4 that “anything under the sun that is made by man” can be patented, the application of intellectual property rights to living organisms by the agricultural biotechnology industry has been aggressive. Among the most troubling aspects of this trend is that many agricultural biotech patents are granted despite the fact that they appropriate germplasm, seeds, and plants commonly found in the public domain. Analogies are generally drawn from areas such as sunlight, air, water, and the electromagnetic
stream. Robert W. Herdt, the Director of Agricultural Sciences at the Rockefeller
Foundation, calls this appropriation“ enclosing the global plant genetic commons.”

The U.S. government has been the primary advocate of expanding intellectual
property rights to agricultural biotechnology processes and products both at home and abroad. The reasons are twofold: the dominant corporations in the agricultural biotechnology sector are U.S.-based, and Americans plant the largest share of genetically modified crops in the world. Agricultural biotechnology is a multi-billion dollar industry. For instance, Monsanto and Pioneer Hi-Bred International, two of the largest and most concentrated U.S. corporations, control over 60 percent of the
corn and soybean market. Concentration within this sector remains extraordinary,
with the top eight firms accounting for 69 percent of R & D in 2002 while the top four accounts for 57 percent.3 Even with this high degree of concentration, mergers and acquisitions within this sector continue to accelerate at a variable annual rate of 30 percent.

Loveness Chibabi, left, with her son Michael, and sister Peggy, right, leave a World Food Program food distribution center at Ngombe, Zambia, Saturday Aug. 10, 2002. A South African Food expert urged Zambia Tuesday Aug. 13, 2002 to allay its concerns over genetically modified food by testing the safety of U.S. corn donated to ease the country’s hunger crisis.

Full-scale commercialization of genetically modified crops began in the U.S. in 1996. A recent report released by the Pew Initiative on Food and
Biotechnology shows that the U.S. plants over two-thirds of the world total. The primary crops under cultivation in the U.S. which are genetically modified include: soybeans (68 percent), cotton (69 percent), corn (26 percent), canola (55 percent), and tropical fruits such as papaya (53 percent). In 1996, genetically modified crop plantings occurred on 4.2 million acres in six countries while in 2000 there were
109.2 million acres in 13 countries, “a 26-fold increase in five years,” according
to the Pew Initiative. Within the U.S. there was a twenty-fold increase during the same five-year period, from 3.7 million acres planted in 1996 to 74.9 million acres in 2000.4 As of 2003, 140 million acres of genetically modified crops were planted in the United States.

In spite of fierce debates over these controversial crops worldwide, the Financial Times reported in 2003 that since 1996, worldwide plantings of GMO crops have increased annually by more than 12%. This expansion can be attributed in large part to the U.S. Trade Representative’s Office. Robert Zoellick, U.S. Trade Representative (USTR), has engaged in a concerted attempt to pry open markets for the export of these products while simultaneously strengthening the enforcement of intellectual property rights abroad.

For instance, the U.S. threatens countries with onerous trade sanctions if they fail to ensure intellectual property rights’ protection. Through Section 301 legislation, the USTR’s Office keeps a “Priority Watch List” of countries who fail to enforce intellectual property rights. If a country fails to meet the strict requirements set by the USTR, thereby ending up on the list, then trade sanctions may be imposed. In addition to this mechanism to expand and enforce intellectual property rights abroad, the U.S. succeeded in incorporating the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement into the World Trade Organization in 1995.

The TRIPS agreement is a fundamental component of the WTO, requiring states who aspire to participate in the trade regime to abide by all aspects of the TRIPS agreement lest they suffer trade sanctions. TRIPS provides monopoly rights to corporations for up to 20 years in areas such as germplasm, seeds, and plants. Significantly, intellectual property rights increase the costs of seeds and food, thus arguably decreasing consuming countries’ food security.

As a point of comparison, Americans are very familiar with the exorbitant prices charged for medicines due to the pharmaceutical industry’s patent rights. While the costs of brand name drugs are financially burdensome for many Americans, they generally do not pose a problem of life or death. However, in the developing world, it is a different story. For instance, a month’s supply of patented HIV-retroviral medicines costs $10,000 whereas a generic version costs $300. Such a discrepancy in prices prohibits the desperately ill from attaining the medicines they need. Countries that would violate the TRIPS agreement to import generic drugs would likely suffer trade sanctions. Hence, even though generic medicines exist, the multiple costs of importing them are prohibitive.

Against this backdrop, with developing countries engulfed in the AIDS crisis, trade negotiators for the Doha Round of the WTO agreed prior to meeting in Cancún, Mexico (September 2003) to provide an exemption to TRIPS in case of public health emergencies. This legal loophole enables developing countries to import generic medicines on a one-time basis. Unfortunately, generic seeds do not exist, nor do loopholes in TRIPS, in case of famine.

Intellectual property rights not only increase the cost of seeds but they also have been used by the agricultural biotechnology industry, backed by the U.S. government, to force farmers to sign burdensome contractual agreements to further protect those rights. These contracts require farmers to forgo saving and reusing seeds from one year to the next—a practice farmers have engaged in for millennia. Furthermore, these contracts impose burdens on farmers by legally forcing them to ensure patented seeds do not end up in neighboring crops.

Monsanto has successfully sued farmers in Canada and the U.S. to set legal precedent as a way to ensure thatthese contracts are honored. The New York Times recently reported on a 61 year-old Mississippi farmer, Homan McFarling, who is appealing a lawsuit Monsanto won against him for patent infringement. McFarling was required to pay Monsanto $780,000 for saving and reusing seeds he purchased from the company the year before. Apparently, McFarling had no conception he was signing such a detailed contract with the company at the time he purchased the seeds. Now he argues he will be forced into bankruptcy if the verdict is upheld on appeal, noting, “It doesn’t look right for them to have a patent on something that you can grow yourself.”5 A federal appeals court determined in the spring of 2004 that Monsanto’s calculation for damages of $780,000 against the Mississippi farmer,
Horman McFarling, was “unenforceable.” However, the court determined that McFarling had violated the terms of his contract with Monsanto, which would result in a judge or jury in Missouri setting the amount owed to Monsanto.

Similarly, a Saskatchewan farmer appealed his lost lawsuit with Monsanto in the Canadian Supreme Court. In this case, there was no contract; however, Monsanto claims that Percy Schmeiser planted patented canola seeds on his farm without paying Monsanto’s technology fee. Schmeiser insisted that the seeds migrated to his 1,400 acre farm without his direct involvement. Monsanto argued that because there was a large quantity of these patented seeds on Schmeiser’s farm, he must be culpable. The Canadian Supreme Court’s much anticipated decision in the case was announced in May, 2004. The Canadian Supreme Court ruled 5-4 in favor of Monsanto, but determined that Saskatchewan farmer, Percy Schmeiser, did not owe the company damages.

These two developed country accounts reveal the pitfalls that can accompany such patent rights on seeds in the developing world, especially when poverty statistics are taken into account. Upwards of 70% of Africans rely on subsistence farming for their livelihoods. Legal victories against developing country farmers could be
devastating. Will these farmers understand their legal responsibilities after buying and planting such seed?

In terms of the potential legal culpability incurred by farmers who inadvertently have seed on their farms, the National Research Council of the National Academy of Sciences showed that containing genetically modified organisms to a confined area is impossible. Their report argues that “bioconfinement methods are not well
developed” and can never be considered“ foolproof.” In addition, the Union of
Concerned Scientists released a 70-page study in February 2004, “Gone to Seed,” substantiating that there has been extensive contamination of traditional maize crops by genetically modified ones. Such cross-contamination belies industry and government claims that these crops can be kept safely separated.

Indeed, both reports point toward the difficulty in applying intellectual property rights to naturally occurring organisms, such as seeds.

Proponents of applying intellectual property rights to agricultural biotechnology
argue that there are two primary benefits from this new technology. First, agricultural biotechnology will be safe for the environment by using fewer pesticides and herbicides. Second, these crops will produce increased yields. To
date, these promised benefits are not born out by the empirical evidence.
Worse, genetically modified seeds and the inputs necessary to grow them combine
to make them more expensive than traditional hybrids.

Most genetically modified crops are currently designed for herbicide and pest resistance. The most prominent example is Monsanto’s Roundup Ready soybeans, designed to withstand multiple sprayings of Monsanto’s Roundup herbicide. Thus a farmer who plants these seeds can spray their fields aggressively to kill everything in them except the soybeans. While this application may seem on the surface like an advance, it poses significant drawbacks. First, it does not reduce the inputs. A
recent study commissioned by Iowa State University, using U.S. Department
of Agriculture data, found that farmers who grew herbicide-tolerant soybean
crops increased the average pound of herbicide sprayings per acre. These are
inputs that farmers in the developing world (and many in the industrialized world) cannot afford.

Second, so far genetically modified seeds have not consistently produced improved yields compared to traditional hybrids. Agricultural biotechnology industry proponents argue that GMOs will “feed the world,” and are necessary to meet a growing world population, expected to crest at roughly 9 billion by the year 2050. But according to the USDA Economic Research Service, genetically modified crops do not, on average, produce higher yields than traditional hybrid varieties.

The promise of technology transfer down the road is also cited as a primary
justification for expanding intellectualproperty rights to agricultural research. Advocates insist that patent rights will serve the broader public interest through investing the proceeds of current patent royalties into new research and
development. Any advances in agricultural biotechnology will transfer to the developing world over time as patent rights for current processes and products expire. While this justification appears compelling, it assumes that developing countries have the domestic, scientific, and legal infrastructure to exploit this research. Furthermore, the World Bank found no“ systemic empirical evidence
. . . on the positive impact of intellectual property rights on increased R & D.” In fact, strengthened intellectual property rights “may actually slow the overall pace of innovation… while increasing the knowledge gap” between industrial country producers and developing country users.

Then there is the long-term food security problem. One of the more controversial
developments to come out of agricultural biotechnology is the socalled“ terminator technology,” which produces sterile seeds. The USDA and Delta & Pine Land jointly developed this technology, officially called Genetic Use Restriction Technology (GURT). When first introduced in the late 1990s, a firestorm erupted over its potential impact on the 1.4 million farmers in the world, predominantly poor peasants, who depend on traditional practices of saving and reusing seeds from one year to the next. In order to quell public criticism, the patent was temporarily
put on hold. Nevertheless, in August of 2001, USDA’s Advisory Committee on
Agricultural Biotechnology officially announced that it would restart licensing this technology.

GURT is being hailed by industry and government advocates as the nvironmentally
friendly answer to the rising problem of genetic contamination between GMOs and traditional seeds. But commercializing sterile seeds is, at best, gambling with the future of the world’s food supply. Forcing farmers to purchase new seeds each year may seem like an ingenious business strategy, but it carries inherent risks as it sets about restructuring world agriculture and undermining farmers’ livelihoods.

In the face of the widespread changes currently underway in agricultural research, a concerted international effort has arisen to preserve the genetic diversity farmers depend on to replenish their seed stocks. Donald Kennedy, chief editor of Science magazine and former commissioner of the Food and Drug Administration, recently wrote in The Washington Post about a new initiative called The Global Conservation Trust.8 This initiative’s purpose is to ensure the long-term availability of crop genetic diversity.

Alarmingly, the international seed banks are bleeding the collections and resources necessary to fulfill their mandate. The rush to patent germplasm, seeds, and plants
drives the incentives in agricultural research toward a greater reliance on
monoculture crops such as rice, wheat, and corn.

Kennedy notes that these “staple grains… are at risk from novel pathogens, arising from sudden genetic alteration or from delivery by an agroterrorist.” To stem this tide, a genuine multilateral effort is being made to fund the Trust. Commitment remains vital to ensure that these global public goods benefit generations.

On another international front, the Cartagena Protocol on Biosafety entered into force in September 2003. The 87 member states agreed to identify bulk shipments of genetically modified organisms by labeling them “may contain LMOs” for living modified organisms. These signatories base their decision to label these foods on the“ precautionary principle” which represents a scientific and legal term for
assessing risk. Specifically, the principle assumes a risk is present in a product or
activity, and thus requires the proponent to prove it is harmless. Once the European Union ratified the Cartagena Protocol in June 2002, it reaffirmed its
moratorium on importing genetically modified foods. This five-year moratorium
is the basis on which the US is challenging the EU in the WTO.

America’s quest to dominate the world’s food supply is a risky strategy. Presciently remarking on where such a strategy could lead, a Wall Street Journal wrote in the early 1980s, just as the budding agricultural biotechnology industry began to bloom, stated, “You have heard of ‘Star Wars.’ Now there are seed wars.”
From another angle, President Jimmy Carter captured this risk when speaking about the links between food security and world peace, noting that much violence and suffering in the world could be alleviated if the conditions causing hunger were eradicated. Simply put, he argues, “There can be no peace until people have enough to eat.”9 Indeed, these likely consequences will contribute to a growing gap between the industrialized and developing countries as developing countries’ dependency on world food markets dramatically increases. Together, these conditions are the ingredients for a volatile future.

However, the current trajectory of agricultural biotechnology is not predetermined.
Americans’ influence on the direction and outcome of whether potential seed wars erupt is enormous. Considering this potential war hangs in the balance, the costs and benefits of promoting agricultural biotechnology under strict patent rights should be carefully weighed. American optimism about the power of technological innovation to provide pathbreaking solutions to real world problems must be
tempered by realization that technology’s outcome depends upon the political
choices made about its development, application, and distribution. America faces numerous challenges as global leader in the twenty-first century. For our own security, as well as international stability, it is incumbent that we pursue policies that enhance global welfare rather than jeopardize it.

1 President Bush spoke at the Corporate Council on Africa’s U.S.-Africa Business
Summit (June 2003).

2 Ellen Hickey and Anuradha Mittal, eds., Voices from the South (May 2003).

3 Gregory D. Graff and James Newcomb,“ Agricultural Biotechnology at the
Crossroads, Part I: The Changing Structure of the Industry,” http://www.bio-era.net.

4 Pew Initiative on Food and Biotechnology,“ Genetically Modified Crops in the United States,” Factsheet (August 2003).

5 Adam Liptak, “Saving Seeds Subjects Farmers to Suits Over Patent,” The New York Times (November 2, 2003).

6 William D. Mcbride and Nora Brooks,“ Survey Evidence on Producer Use and Costs of Genetically Modified Seed,” Economic Research Service, U.S. Department of Agriculture (2000, Food Marketing Policy Center, University of Connecticut).

7 World Bank, Knowledge for Development– World Development Report 1998/99 OUP, 1998.

8 Donald Kennedy, “Save the Seeds,” Washington Post (January 2003).

9 President Jimmy Carter, “First Step Toward Peace Is Eradicating Hunger,” International