Biotech & Food Companies--Is the Honeymoon Over?

From: http://www.capitaleye.org/inside.asp?ID=92
The Center for Responsive Politics

Food Fight

Major food companies have worked side by side with biotech to promote genetically modified foods. How long will the alliance last?

By Vikki Kratz

July 09, 2003 | Last fall, an Oregon housewife spearheaded a ballot initiative that would have forced the nation's food companies to label products sold in the state that were made with genetically modified ingredients. She was concerned about the safety of crops that had been engineered to produce their own pesticides. Oregon's Measure 27 would have been the first law of its kind in the country. But a $5 million campaign, financed by an alliance of biotech and food companies, easily defeated the measure‹and demonstrated the power of the industries' partnership.

The flood of out-of-state money into Oregon's ballot battle came from the agriculture industry's top biotech companies: BASF, Bayer, Dow Chemical's Dow AgroSciences, DuPont, Monsanto and Syngenta. These six companies have spent big bucks in the past to defeat similar laws and to influence the regulations governing their industry. From 1998-2002, the companies spent more than $53 million to lobby the federal government. Since 1989, the companies have contributed more than $12 million in individual, PAC and soft money donations, 77 percent to Republicans. Dow Chemical is the industry's top contributor, donating more than $4.5 million in individual, PAC and soft money donations since 1989, 80 percent to Republicans.

But while agriculture's biotech companies have plenty of clout in their own right, they have never had to act alone. Major food companies including General Mills, Nestle and Pepsico contributed to the $5 million campaign to defeat Oregon's Measure 27. The food companies oppose labeling genetically modified (GM) foods, citing the impracticality and expense of labeling GM ingredients that appear in 70 percent of the country's processed food. The industry was also worried that passage of Oregon's law would set off a chain reaction of similar laws in other states.

It wasn't the first time that the food industry had teamed up with biotech companies. Back in 1999, when the Food and Drug Administration first began to pay serious attention to the issue, more than three dozen food and agriculture trade associations formed the Alliance for Better Foods to promote biotech crops to Congress and the American public. They were trying to counteract a campaign by consumer groups and environmentalists questioning the safety of the foods. The anti-biotech campaign had worked so successfully abroad that the European Union had banned GM foods, while Japan and Australia required them to be labeled.

At the time, the food and biotech industries spoke confidently about their partnership. A spokesman for the Grocery Manufacturers of America told a Senate panel, "Major food and beverage companies‹who are strongly supportive of food biotechnology and the farmers who utilize it‹are part of this coalition dedicated to educating the public about its benefits. Š Acting together, food companies, lawmakers, scientists, farmers and regulators must work to ensure that activists with a political agenda do not kill the promise of biotech foods."

But now the once strong alliance between the biotech and food industries has begun to show some cracks.

Although the food companies still support genetically modified crops, the latest advance in food biotechnology has them suddenly wary. Biotech companies are now altering plants to produce medicines, a practice called "biopharming." The crops can make the proteins and other substances needed for medicines at a lower cost than pharmaceutical factories can. But food companies worry that crops containing vaccines, hormones and antibodies could mix with food crops, with disastrous results.

A newly created medicinal plant almost got into the food supply last year. A small biotech company called ProdiGene was attempting to genetically modify corn to produce a diarrhea drug. When the company completed its research trials, a farmer re-planted the test fields with soybeans. Some of the modified corn, however, was still present in the field and mixed with the soybeans during harvesting. The U.S. Department of Agriculture ordered ProdiGene to pay a $250,000 fine and spend another $3 million to buy the contaminated soybeans, which were destroyed.

The scare convinced Kraft CEO Betsy Holden of the need for increased government oversight of biotechnology. "Right now, public acceptance of biotechnology in America is relatively high," she told an agricultural forum in April. "But how many more times can we test the public's trust before we begin to lose it?" Kraft has been burned before. In 2000, Aventis' Starlink corn, which had not been approved for human consumption, somehow ended up in Kraft taco shells and the company was forced to recall them. Now, food companies worry that they could be held liable if biopharm crops were to contaminate the food supply.

But getting stricter regulations may be an uphill battle, especially considering biotech's growing power in Washington.

"They worship biotechnology in the Bush administration," said Bill Freese of Friends of the Earth, an environmental group. "A company like ProdiGene doesn't have to lobby because it's considered the golden boy of a cutting-edge industry."

Indeed, biotech's cachet may work against the food companies, which for years had a stake in making sure the government maintained a laissez-faire attitude toward the industry.

At first, the biotech industry appeared to be responsive to the food companies' concerns. After the ProdiGene incident last fall, the industry's trade association, the Biotechnology Industry Organization, imposed a temporary ban on planting biopharm crops in the Midwest. But BIO soon retracted the ban, reportedly under pressure from Sen. Charles Grassley (R-Iowa). Grassley supports biopharming as another way to help boost his state's agriculture economy. A top recipient of money from the biotech industry, Grassley has received more than $100,000 in individual and PAC donations from biotech companies since 1989.

Not being able to count on BIO's support‹or Grassley's‹the food companies have struck out on their own. Earlier this year, the Grocery Manufacturers of America, along with nine other food and restaurant trade groups, asked the FDA for greater oversight of pharma crops. If the FDA doesn't respond with new guidelines, the food companies may take their problem to Congress. If they do, they'll be well prepared. During the 2002 election cycle, food processing companies gave $11.5 million in individual, PAC and soft money donations. That's three times the $3.4 million the biotech companies gave during the same period.