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Monsanto Admits Defeats
in EU and Brazil

The Guardian (London)
August 20, 2002

Troubled Monsanto scales down GM hopes in Europe

BY: David Teather in New York

Monsanto, the US corporation faced with widespread opposition to its
genetically modified products, has conceded that it will take at least
another three years before winning approval for their sale in Europe.
The company, which has become the bete noire of campaigners against GM
crops, said it was working on the assumption that it will make no progress
in Europe until 2005.

There has been a moratorium on the approval of new GM crops in Europe since
1998 due to public anxiety about potential risks. European consumers have
become unsettled by unrelated food scares, including mad cow disease.
Monsanto also expects a lack of progress in Brazil, a key producer of soya
beans, which has managed to resist pressure from Washington to grow GM
crops, until 2005.

In the past few days, British ministers have said they are coming under
intense pressure from the US and the biotech industry to accept GM products.
Such crops have been planted across swaths of American farmland.
On BBC Radio 4's Today programme last week, the countryside minister, Elliot
Morley, said: "There is enormous international pressure to allow GM crops
and seeds in this country from the biotech companies. They are going through
national governments and the World Trade Organisation and pressurising the
EU."

Britain's environment minister, Michael Meacher, said yesterday that Britain
would not be "bounced" into accepting GM crops by the US.

Hendrik Verfaillie, the Belgian chief executive of Monsanto, told the
Financial Times the company needed to be more realistic about growth after a
warning that profits in 2002 would be a third lower than hoped for.
"We are assuming no progress in Europe until 2005. We are trying to be
conservative," he said. "It is better to under-promise than under-deliver, I
have learned. I don't like earnings revisions, they are painful."
Britain has been running a three-year trial of GM oilseed rape in fields
across the country, supplied by Aventis, part of Bayer. The trial, to
measure the seed's environmental impact, is part of a deal between the
government and the industry aimed at trying to reassure the public.
But the disclosure last week that trial crops had been contaminated with
unauthorised GM seeds carrying antibiotic genes did little to calm
campaigners, who now want an immediate halt to the trials.

Mr Meacher also admitted that the pilot may not give a true picture of the
wider effect on the environment.

The decision on whether commercial planting is allowed will be made at
European level, but resistance among some countries, including France and
Greece, is fierce. In turn, Washington is threatening a trade war unless
companies such as Monsanto can sell GM grain and seed in Europe.

The total land under GM cultivation rose from 1.7m hectares (4.2m acres) in
1996 to 52.6m hectares (131m acres) in 2001. Around two-thirds of that was
planted with GM soya beans produced by Monsanto to resist herbicides.
Monsanto, which is suffering financial pressures, is eager to persuade
doubters of the merits of GM food.

The company recently tried to raise up to pounds 650m from the commercial
debt markets but was only able to borrow pounds 390m. It also faces falling
sales of its traditional herbicide Roundup after the patent expired in the
US. Roundup accounts for 45% of Monsanto revenues. The company was weakened
further last week when the US drug maker Pharmacia split from Monsanto just
two years after buying it. Monsanto denies it is in danger of running out of
cash.

The lingering suspicions about GM crops was sharply illustrated recently
when Zambia joined other drought-stricken southern Africa states in turning
away a shipment of GM maize from the US. The shipment was part of an
international emergency relief effort to ease food shortages.

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