EU Backs off on Demanding that US Segregate Geneticically Engineered Crops

-- July 25, 1997

Europe Shifts Stance on Demand Over Genetically Altered Crops

Staff Reporter of THE Wall Street Journal

The European Union appears to be backing away from a food fight with the U.S. over genetically engineered crops.

The European Commission in Brussels shelved a proposal by its top agricultural official, Franz Fischler, that any genetically engineered grain exported to Europe be segregated from conventional crops. Instead, the EU said it will propose rules for labeling food that contain genetically modified crops.

The initial proposal worried American officials because the U.S. grain industry, which exports about $2.5 billion worth of soybeans to Europe annually, isn't equipped to separate crops that way without huge expense.

About 15% of the soybeans that U.S. farmers will harvest this year come from plants genetically engineered to tolerate a potent herbicide made by Monsanto Co. Soybean Futures Rise

U.S. soybean prices climbed Thursday as grain traders breathed a sigh of relief. "This certainly reduces the friction," said Daniel W. Basse, head of research at AgResource Co., a Chicago commodity research firm.

In trading at the Chicago Board of Trade, the soybean futures contract for August delivery rose 13 cents a bushel to settle at $7.52 a bushel.

"It's progress," said Bruce Knight, vice president of public policy at the National Corn Growers Association, a farm trade group in Washington, D.C. About 6% of U.S. corn fields were planted with genetically engineered seed this year.

The U.S. dodged another controversy Thursday when Egypt agreed to suspend for three months its proposed import ban on transgenic crops. Egypt's sudden concern about food biotechnology baffles grain traders because it is mostly an importer of wheat -- a crop that U.S. scientists have yet to genetically engineer for commercial purposes. But Washington is treating the move seriously because Egypt is expected to buy roughly 183 million bushels of U.S. wheat this year. U.S. officials are also concerned because Egypt buys about 85 million bushels of U.S. corn each year.

Labeling Proposals American agribusiness is facing far more government resistance to genetically engineered crops overseas than it did in the U.S. because some foreign consumers are much more squeamish about consuming modified food. Indeed, the European Commission is going ahead with a proposal that member states begin labeling genetically modified foods.

The proposal, which probably would take many months to become law, would require the labeling of crops that have been directly engineered -- such as commercial seed -- and allow retailers to advertise the fact that a food product wasn't made with any genetically modified material.

Neither move is particularly controversial. But U.S. officials are concerned about a third area that the EU said it is interested in labeling: food products that might contain genetically modified material because they are made with ingredients such as soybean meal. But the commission probably won't finish writing the proposed rules for that category until October.

The commission proposes legislation to members of the EU. Some European countries have already placed import bans on genetically modified crops. The commission is expected to challenge those moves.

-- Julie Wolf in Brussels contributed to this article. Copyright (C) 1997 Dow Jones & Company, Inc. All Rights Reserved.

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