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re-post: farmer funds promoting genetically engineered wheat?

Editor's note-- This story was originally posted on Feb 21. -- RS

by Robert Schubert
CropChoice editor

(Friday, Feb. 21, 2003 -- CropChoice news) -- Robert Bornemann opposes the commercialization of Roundup Ready wheat.

"This wheat will contaminate and destroy the organic market, destroy the IP [identity preserved] markets and destroy all of the wheat markets. In short, it will destroy farmers," says Bornemann, a North Dakotan preparing to sow his first certified organic crops. He grows hard red and white spring wheat, flax, corn, alfalfa, oats, and raises cattle.

Such reservations seem to be rising among northern plains farmers about the wheat Monsanto genetically engineered to resist Roundup, its trade name for the glyphosate herbicide. Monsanto and its allies have blocked legislative efforts in Montana and the Dakotas to impose moratoriums or any other measure addressing concerns that foreign market rejection of Roundup Ready wheat could deflate both the exports and the price for all U.S. wheat varieties and classes.

With that victory in hand, Monsanto now appears to be focusing on a campaign to create the perception that farmers everywhere are now endorsing transgenic wheat. If consumers believe this to be so, they might in turn drop their resistance.

Indeed, the Reuters news service quoted Monsanto executive Michael Doane speaking at recent meetings of key wheat industry groups in New Mexico: "Consumers trust farmers...We've been investing in this technology now for probably a decade. We're entering a new part of the project and need industry help to educate decision makers.'"

Several farmers I spoke with regard those as coded statements for the sellout of one organization, the National Association of Wheat Growers. On top of that, news emerged during the industry meetings that the other major player, U.S. Wheat Associates, had received orders to stop publicizing negative feedback from major foreign buyers about genetically modified wheat. To top it all off, the two groups announced they likely would push forward with earlier merger plans.

These developments call into question whether taxpayer dollars and the money Bornemann and most wheat farmers are assessed at the point of sale for their crops will be used to promote Monsanto's Roundup Ready wheat.

"I don't believe it's right for a for-profit corporation to be using my checkoff dollars and our tax dollars to promote its product," Bornemann says.

Such a practice could strike at the heart of his and other farmers' First Amendment right to free expression.

As a practitioner of organic agriculture, the standards of which disallow the use of genetically engineered seeds, Bornemann takes seriously the environmental and agronomic effects of biotechnology. But he also shares with many of his fellow farmers deep concerns about the economic consequences of Roundup Ready wheat.

Market Rejection and Corporate Subsidies

Jim Diepolder, a North Dakota grower of durum wheat, bases his skepticism on stern warnings from Asia and Europe that they do not want and will not accept genetically modified wheat.

Cargill, Archer Daniels Midland, and other agribusiness corporations export half of the wheat that U.S. farmers grow. More than 50 percent of North Dakota's hard red spring wheat goes to Europe and Asia. Half of the durum wheat is exported, much of it to the European Union.

The U.S. Durum Growers Association over which Diepolder currently presides won't endorse Monsanto's wheat until customers do, he says. Although the transgenic wheat in question is a hard red spring variety, not durum, the EU and other markets have said they'd shun all American wheat if a biotech variety were commercialized.

"I have a personal litmus test" when it comes to this, says Diepolder, now speaking on behalf of himself, not the Durum Growers. "Is it good for me, the farmer? Is it profitable?"

The cost of producing wheat in North Dakota runs about $100 to $120 per acre, he says. Farmers are raising about 30 bushels per acre and receiving about $3 per bushel, which means they make $90 per acre. That's less than the cost of production. Currently, the government pays them the difference. If the more expensive Roundup Ready wheat seed were available today and farmers chose to purchase it and pay the technology fee, they would be using government (i.e., taxpayer) money.

"It would be the taxpayers through their subsidies helping farmers to pay the technology fees," he says. "Any subsidy is supposed to go to farmers, not to Monsanto."

Farmers on Board?

But if the reports out of the late January wheat industry meetings were any indicator, Diepolder's and others' apprehension about lost markets is supposed to have vanished.

The "farmers are on board...this week's annual gathering found firm support for Monsanto and eagerness to obtain the potential benefits the technology might offer," according to the Reuters story cited earlier. "'Rather than sitting on the sidelines hoping that it wins acceptance, we're trying to help out,' said National Association of Wheat Growers (NAWG) CEO Darren Coppock. 'It's very much a partnership (with Monsanto).'"

Richard Flanders appears to be on board a different boat.

"Once it's introduced it will have to be segregated, which is impossible with a bulk distribution system," Flanders says. "Most businesses are concerned with customer acceptance of their product. As a farmer, I am concerned with export markets."

So concerned that he left the North Dakota Grain Growers Association, itself a member of the national organization, two years ago because of its stance in favor of transgenic wheat.

The National Association of Wheat Growers lobbies Congress, the White House, and regulatory agencies for laws, policies and regulations to help family wheat farmers. Some critics claim that the organization doesn't represent farmers at all, but rather agribusiness interests.

About 35,000 farmers pay dues to state wheat associations that are NAWG members, says CEO Darren Coppock. The states in turn contributed two thirds of its $1.2 million budget last year. The elected presidents and vice presidents of the state bodies make up the board of directors.

Given that more than 240,000 U.S. farmers grow wheat, according to the Department of Agriculture's 1997 census, NAWG indirectly represents fewer than 20 percent of them. That doesn't surprise Kathleen Kelley, a Colorado rancher and vice president of R-CALF United Stockgrowers of America (http://www.r-calfusa.com). During her days as a wheat grower some 20 years ago, Kelley briefly served on the board of the Colorado Association of Wheat Growers, a NAWG member.

She remembers attending one of its leadership trainings, which she views as corporate brainwashing. Gazing around her posh hotel suite, Kelley knew that membership dues couldn't stretch that far. They didn't. Carl Swenson, then head of NAWG, informed her that much of the support came from agribusiness and that they didn't really need membership dues.

"Without the support of corporations, NAWG wouldn't have enough members to meet in a phone booth," Kelley says.

The organization's website, http://www.wheatworld.org, includes a page highlighting the support of associate members Monsanto, Syngenta, Dow AgroSciences and other corporations. They, along with conference revenue, funded 25 percent of its 2002 budget, certainly not enough to claim that business is running the NAWG show, Coppock says.

But in Kelley's view, it's not the quantity of dollars that plays the decisive role: "I think there's a culture, a tradition, of leaning toward the agribusiness position. Taking an anti-agribusiness position could jeopardize what sponsorships they do get."

Jim Diepolder, whose Durum Growers Association is a NAWG affiliate, but not a member, sees a major corporate presence at conventions, though he thinks it's lessened a bit in recent years.

"It gave me an uneasy feeling in that who's footing the bill and whom do you become loyal to," says Diepolder, again expressing his personal views.

During the New Mexico wheat industry meetings, he says a farmer stood up and said to Monsanto executive Michael Doane as he prepared to speak, "I hope you're going to charge as much in Canada for dinners." The farmer was referring to the different prices that Monsanto (and other agribusiness companies) charges for products and services in the United States and Canada. Some call such practices antitrust.

Whether NAWG follows the corporate line in general is debatable, but when it comes to Monsanto Corporation's Roundup Ready wheat, "NAWG absolutely is pushing U.S. Wheat Associates to promote it,' he says.

What is U.S. Wheat Associates?

This organization, which along with NAWG is a major player in the wheat industry, has the mandate and responsibility of promoting the acceptance and purchase of all U.S. wheat varieties and classes in foreign markets.

As it has always done in its promotion work, U.S. Wheat conducted surveys over the past few years on the question of genetically engineered wheat. It has openly shared with media a steady flow of comments from Japanese, Korean and European buyers, all critical export destinations, that they'll shop elsewhere, such as Ukraine, Kazakhstan, Hungary, India, China, Australia and Canada.

But the release of that information to the public bothered members of the biotechnology committee that the National Association of Wheat Growers and U.S. Wheat Associates formed two years ago because they had not seen it first, says Darrell Hanavan, chairman of the committee and director of the Colorado Association of Wheat Growers.

That's why, during the industry convention in New Mexico, the committee directed U.S. Wheat not to release any more such surveys or information, especially in regard to consumer acceptance, without its prior approval. Both the NAWG and U.S Wheat boards of directors approved it, Hanavan says.

Though the order is in accordance with the rules, is it right? He says this doesn't mean USDA or another government entity couldn't get access to the information, and emphasizes that no one objected when he raised the issue.

The order is not about censorship, he says. Instead, the committee felt the need to see the market data and feedback to determine how it fits with the industry's official biotechnology policy and whether it needs modification.

Though the preface of the policy, available at http://www.uswheat.org/Biotech.nsf/9fe8bbaadaf8ae9685256a310068c1fc commercialization and planting of transgenic wheat, its first point emphasizes that markets must be willing buyers.

The industry leaders apparently want a more proactive effort to create that willingness. Indeed, the biotech committee directed U.S. Wheat Associates staff to begin developing a marketing strategy for Roundup Ready wheat, says Dawn Forsythe, director of public affairs for U.S. Wheat Associates.

North Dakota farmer Louis Kuster thinks that proponents of transgenic wheat ardently believe producers' costs will be less with Roundup Ready variety and that farmers are being deprived of this in part by heavily publicized information about market rejection. They seem to think that more energetic promotion would bring buyers around to their viewpoint.

Unfortunately, he says, there are problems with this scenario:

One, if a store salesman is badgering customers to buy jackets made of leather instead of the cloth they want, eventually they get fed up and go elsewhere. The same is true with transgenic wheat.

Two, the proponents dismiss the idea of market rejection because they're looking at wheat in the same way they do genetically modified corn and soybeans. Those exports haven't crashed -- although Iowa State University agricultural economist Robert Wisner estimates the cumulative economic loss of U.S. corn exports since the introduction of transgenic corn to be nearly $1 billion -- so what's to worry about wheat? The difference is that the United States faces much more export competition from other wheat-growing nations. Unlike corn and soybeans, wheat is used mostly in human food and follows a comparatively direct path into products. In short, customers can shop elsewhere.

Three, the technology may not lead to the environmental benefit of lessened herbicide usage, as Monsanto claims. For example, he notes the Roundup-resistant corn sprouting in fields of Roundup Ready soybeans. Monsanto, as part of the technology agreement, is supplying Select herbicide to kill the corn. Thus, herbicide usage is more, not less. And when the producer eventually has to use other herbicides, their costs go up, not down.

Monsanto's Promise

"We are relying on Monsanto's commitment to us that they will not commercialize Roundup Ready wheat until there is buyer acceptance in foreign markets," says Forsythe of U.S. Wheat Associates.

But what does that promise mean? Monsanto is in poor financial shape and is banking on this product, according to many analysts. Therefore, a changing management cast might view the commitment as a hindrance.

"Desperate men resort to desperate measures," Kuster says. "If Monsanto can point to some markets that might accept it, they would see that as amounting to sales of enough seed to cover their costs, so they might go for it."

Says Diepolder: "If seventy percent of the market accepts the wheat it would be profitable for the corporations to sell it, but it wouldn't be profitable for us to grow it. They make money, but it's a wreck for us. The proponents of this wheat have used the word that it will 'indirectly' benefit us. That word is a red flag for me. A lot of things that indirectly were supposed to help us [e.g., trade agreements, farm programs] have actually directly harmed us.

"There's no profit in three dollar wheat and no profit in paying technology fees on top of that. If we lose ten cents on a bushel on this farm, that's ten thousand dollars, so I have to be concerned."

When asked about the predictions of Dan McGuire, policy chairman of the American Corn Growers Association, that market rejection of U.S. wheat could drop prices to about $2 or less, Diepolder has two words: "Feed wheat." Such a price plunge would leave farmers to grow wheat for livestock feed or put them out of business. It would also further depress prices for corn, grown mostly for feed.

Check-offs and Freedom of Expression

A day after reports of the industry call for quiet about buyer resistance, news emerged that NAWG, U.S. Wheat Associates and the Wheat Export Trade Education Committee (WETEC) would move forward on a merger plan.

In light of that, organic grower Robert Bornemann and other farmers are concerned about whether the assessments they pay at the point of sale on each bushel of wheat they market will end up promoting this transgenic wheat to skeptical markets. In short, could their money be used to market something that will harm them financially?

Check-offs began after World War II when various agricultural crop and commodity sectors needed money to fund research and to promote their products. A wool assessment, the first such nationwide effort, began in the 1950s. The egg, beef, cotton, honey, mushroom, dairy, pork, potato, watermelon, popcorn and soybean assessments began later. Various state check-off programs exist, as well.

However, the agricultural landscape has changed drastically since the start of the livestock and grain assessments, says Kathleen Kelley of R-CALF USA. The once numerous and relatively small meat packing and grain processing and trading businesses (lacking the size to wield monopoly power over markets) didn't have the resources to promote the food and fiber ingredients they'd purchased at prices that were profitable for farmers. The check-offs served as generic advertising.

Now, Cargill, ConAgra and a few other companies monopolize livestock and grain purchasing, processing, distribution and end-product sales. Thus, the check-offs are directly benefiting them, not the growers, Kelley says.

Given that reality, the question being asked more regularly by farmers across the country is whether commodity check-offs have become a farmer-financed agribusiness promotion scheme that works against farmers and for agribusiness giants.

In North Dakota, wheat growers are assessed, at the point of sale, one penny per bushel. They can request a refund within 60 days of the sale. (State legislators last week approved a measure increasing the check-off to 1.5 cents per bushel, with some of the half cent boost to benefit the state's Grain Growers Association, a transgenic wheat proponent.)

Most of the revenue from the various state wheat assessments goes to U.S. Wheat Associates, and accounted for about $4 million of its $12 million budget last year, Forsythe says. The other $8 million came from the USDA's Foreign Market Development program.

(That program's roots extend to the 1954 Food for Peace act, which on the face of it was about donating grain to countries in need. However, the law benefited Cargill and other major grain traders. "The promise of eventual commercial purchases was often a specific precondition for the food aid in the first place," writes Brewster Kneen in the recently released second edition of his book, "Invisible Giant: Cargill and its Transnational Strategies.")

As in previous years, U.S. Wheat Associates used most of last year's check-off income -- $3.8 million -- for maintaining offices in Washington, D.C. and Portland, Ore. and for planning its promotion strategy. The other $200,000 went into export market development. Meanwhile, in accordance with federal law, the organization put the $8 million from the USDA (translation: taxpayers) into foreign market work.

Robert Bornemann thinks those check-off dollars could fund, even indirectly, promotion of Roundup Ready wheat. He opposes such use of his money. His fellow North Dakotans Linda Rauser, Jim Diepolder, Richard Flanders, Louis Kuster, Dell Gates, Blaine Schmaltz and Todd Leake agree.

In fact, this use of Bornemann's check-off money probably violates his First Amendment right of free expression because it amounts to political speech with which he disagrees, says Nebraska lawyer Dan Alberts. The Supreme Court last year ruled the mushroom check-off unconstitutional for that reason. Later, a South Dakota federal judge handed down a similar decision on the beef assessment.

What about the fact that U.S. Wheat invests most of the money into planning and domestic work?

"For First Amendment free speech purposes, the idea that I use the money to prepare to speak [promote the biotech wheat] and then use the other money for actually speaking, is not a distinction that will hold up," Alberts says. "That's a little like saying that I got ten dollars from my mom to buy groceries but instead I bought beer and defended myself by saying that I did not use the actual ten she gave me but some other ten. Mom would cry foul and not give me any more money. I think the same should be true for the checkoff payer."

Looking Beyond Markets to Potential Long Run Implications

Bornemann, also a seed cleaner, predicts that U.S. farmers will lose the right to save their seed after Monsanto's genes migrate to conventional and organic varieties. Those who chose to continue growing wheat would have to buy the more expensive transgenic seed and sign the technology agreements that forbid seed saving. Failure to do so could mean a Monsanto lawsuit for patent infringement. They would grow the wheat under contract, and he envisions Monsanto partnering with Cargill or another corporation to buy the harvested crop as cheaply as possible.

"It would mean total vertical integration in the wheat industry," Bornemann says. "Then, consumers would be at their mercy."

Todd Leake doesn't see it quite that way.

"Even if North Dakota were to pass a moratorium, I don't think they'd enforce it," says Leake, a wheat grower. "If it's [biotech wheat] going to die, it's going to die under its own weight, its own liability."

He believes the next generation of transgenic wheat could bring that downfall.

Five farmers from the state got a glimpse of the future on their December trip to Monsanto headquarters in St. Louis, says Leake, who wasn't among them. They came back with the impression that the company wants to establish genetically modified wheat in as many parts of the world in order to set the stage for varieties designed to produce drugs, nutrients and industrial chemicals.

"That would be unpalatable, society just wouldn't support it," he says.

Indeed, NAWG leader Darren Coppock has no enthusiasm for such a product because the wheat market is small and because of the serious issues involved with cross-pollination and mixed seed and grain, all of which could leave consumers with surprises in their bread.

Editor's note: Monsanto would not comment on this story.