Japanese Labels for GE Foods Will Slow Down Ag Biotech in the USA

(Web Editor's note: The grain industry figure of 50% higher costs for
certified non-GE grain is preposterous. Most grain brokers are charging a
3-10% premium for guaranteed GE-free soybeans or corn shippede from the US
to overseas markets.)

Headline: Japan label plan seen affecting U.S. GM crop output
Wire Service: RTw (Reuters World Report)
Date: Mon, Aug 23, 1999

By Aya Takada
TOKYO, Aug 23 (Reuters) - Japan's decision to require labels on
genetically modified (GM) food may slow expansion of GM crop output in the
U.S., its biggest supplier, as Japanese food makers have begun seeking
non-GM crops to avoid labelling, traders say.
U.S. farmers are becoming cautious about increasing acreage planted
with genetically altered soybeans, amid rising demand for non-GM crops from
Europe and Japan, where consumers are concerned about possible health
hazards of GM foods, they said.
"U.S. farmers are pondering whether they should continue to expand
planting of GM soybeans, as they understand they cannot ignore the needs of
food companies in importing countries," said a soybean trader at a major
Japanese trading house.
"I don't expect the ratio of GM soybeans to total soybean planted
acreage in the U.S. to rise significantly from the current level (of around
50 percent for this year) if demand from food processors for non-GM crops
grows further," he said.
Japan imported 2.45 million tonnes of soybeans in the first half of
1999, of which imports from the U.S. accounted for 2.11 tonnes or 86.2
percent. In the same period Japan imported 9.13 million tonnes of corn, of
which imports from the U.S. accounted for 8.82 million tonnes or 96.5
Hironori Kijima, director-general of the Japan Tofu Association,
expects GM labelling will create annual demand for 300,000 tonnes of non-GM
soybeans from Japanese soybean curd makers.
"We want to avoid the GM label as it could hurt the image of our
products. We plan to switch to non-GM soybeans," Kijima said.
"We will be asked by U.S. farmers and distributors to pay high
premiums for non-GM soybeans. But we have no other option than buying from
the U.S., as there are no other comparative suppliers (in terms of quantity
and quality)," he said.
Nippon Flour Mills Co Ltd, Japan's second-largest flour miller, is
considering shifting to non-GM corn in its production of corn grits. A
company spokesman said it was also considering replacing corn starch with
wheat starch in its flour products.
For corn grits production, Nippon Flour buys 30,000 to 36,000 tonnes
of corn per year, mostly from the United States. It also buys 1,500 to
2,000 tonnes of corn starch a year.
Japanese corn snack maker Tohato Inc, which is now completely
dependent on U.S. corn, plans to switch to corn grits made in France in
order to avoid the GM label.
A Tohato spokesman declined to say how much corn the company uses for
corn snack production. But one trader at a Japanese trading house estimates
Tohato needs 200 tonnes of corn a year.
"That amount is a negligible portion of Japan's total imports of U.S.
corn," the trader said. "But the move (to other foreign suppliers) will be
problematic for the U.S. government, which backs U.S. biotechnology
companies' strategy to expand GM crop output."
Traders said it was too early to say the shift to non-GM crops was a
trend within the Japanese food industry.
"Some food makers are beginning to shift to non-GM crops. But others
are cautious about shifting due to uncertainty about willing consumers will
be to pay extra for non-GM foods, if it's unavoidable for them to pass on
increased procurement costs (to consumers) in higher prices," said a grain
trade house official.
Traders estimate purchasing costs for U.S. corn by Japanese end-users
could rise as much as 50 percent if they seek non-GM crops. As for U.S.
soybeans, purchasing costs by Japanese users are expected to rise by about
30 percent.
Under its food safety guidelines, Japan has approved 22 varieties of
GM crops for import and sale, including soybeans, corn, rapeseed, potatoes,
cotton and tomatoes. The government will impose labelling requirements on
these crops and food products that use them from April 2001, to allow
consumers to make an informed choice.
Food products in which DNA or protein resulting from gene alteration
cannot be detected using current technologies, such as vegetable oil, are
exempt from the labelling requirement.