Statement by

National Corn Growers Association

before the

Committee on Agriculture, Nutrition, & Forestry

U.S. Senate

October 7, 1999

Mr. Chairman, members of the committee, my name is Tim Hume. I farm near Walsh, Colorado. I serve on the board of the National Corn Growers Association (NCGA), which represents more than 30,000 members and corn farmers across the country through their checkoff investments. We appreciate the opportunity to discuss the development of biotechnology and its implications for U.S. agriculture and world food security.

Biotechnology is the term given to a wide range of agricultural, industrial, and medical technologies that use living organisms to create enhanced products. We have come a long way since 1982, when modern biotechnology was first commercialized with the production of insulin for diabetes. Now we are on the threshold of an era of tremendous opportunity for agriculture, if we can overcome the immediate challenges that lay ahead.

THE POTENTIAL OF BIOTECHNOLOGY

Plant genomics research advances our understanding of the structure, organization and function of the complete set of chromosomes in a plant. This research leads to a better understanding of basic biological processes in plants. Once genomics identifies the location and function of important genes, the tools of modern biotechnology enable scientists to improve plants in a precise, controlled manner. As many of you know, because of our belief in the benefits of biotechnology, NCGA has been at the forefront of efforts to secure federal funding for plant genomics research.

This month, the world population will exceed six billion persons. As the population grows and as more families are able to afford improved diets, the demand for safe, nutritious food increases. Existing land, water and nutrients must be used more efficiently to balance the supply of food and feed with world needs.

Plant genomics and biotechnology will help scientists, geneticists and plant breeders identify and utilize genes from corn and other economically significant crops that control important traits such as nutritional value, stress tolerance and resistance to pests. The potential applications of biotechnology include:

· significant reductions in crop losses and pesticide use through improved biological methods to control pests;

· improved yields and reduced crop losses from adverse environmental conditions such as heat, drought and salt;

· improved use of nitrogen, reducing the potential for nitrates in the water supply;

· improved animal nutrition and reduced environmental problems from livestock production;

· improved resistance to fungal infection; and

· development of tailored hybrids with valuable specialty starches, oils and protein content.

In addition to meeting the needs for food, feed and fiber, biotechnology allows us to provide raw materials for industrial uses. Currently, the majority of consumer goods are made from hydrocarbons produced by the petrochemical industry. Hydrocarbons form crops, trees and agricultural wastes can replace petroleum in a wide range of everyday consumer goods, such as plastics, paints and adhesives. The utilization of renewable resources will help to cut costs, decrease our reliance on oil imports, reduce greenhouse gas emissions, increase recycling opportunities and create new, world-class industries in the United States. Biotechnology will be critical to this effort, as it will allow the manipulation of plant constituents and enzyme extraction systems that will provide desirable feedstocks.

MARKETABILITY OF BIOTECH CORN

To compete in the global market, U.S. producers must continually strive for economy and efficiency - to maximize yield and combat serious threats from disease, pests, and climate changes - without harming the environment. Genomics research and the application of modern biotechnology hold the key to achieving this goal.

Corn farmers have rapidly adopted genetically enhanced seed technology. This is the fourth year of commercial production of biotech corn, and U.S. farmers planted one third of the corn acres with biotech seed. While farmers recognize the safety, benefits and future potential of biotechnology, we also recognize that this technology has become the target of activist organizations. This exposure has clouded the acceptance of the products of technology worldwide and has created uncertainty for the entire corn industry, from input providers to farmers to food manufacturers here and abroad. The challenges and uncertainty extend to the storage and transportation industry and everyone who markets and handles grain.

This year, 11 different versions of biotech corn were produced commercially in the United States on almost 26 million acres. With one exception, these products have received all the necessary approvals from the Environmental Protection Agency, the Food and Drug Administration, and USDA's Animal and Plant Health Inspection Service.

Unfortunately, not all of our foreign customers accept the U.S. approval process.

We support the right of importing countries to regulate biotech products and expect product registrants who commercialize seed here to fully comply with the registration requirements of our trading partners. As long as countries or trading blocs conduct timely, science-based reviews, we are confident that trade will not be disrupted. But when science is subverted by politics and socio-economic concerns, U.S. farmers don't stand a chance.

Last year, we faced intolerable delays in the approval of biotech corn in the EU. Three registrations were repeatedly delayed, first as the European Commission referred the products for further scientific review, then as votes were delayed to accommodate political schedules, and finally as France delayed the final referral back to the Commission for more than three months. These delays reduced U.S. corn exports to the European Union to less than three million bushels during the 1997/98 marketing year, compared to almost 70 million bushels the previous year.

This year less than four million acres were planted with seed that has not been approved for export to the European Union. Prior to planting, NCGA worked closely with the seed industry to advise producers to select seed that was appropriate for their anticipated use. Through our "Know Before You Grow" campaign, we advised growers who chose EU-unapproved corn to identify a domestic feed use. Growers who did not have a convenient feed use were counseled to choose an approved biotech variety or to plant conventional seed.

This fall we face the first real test of the acceptance of biotechnology in the countryside. This is the third harvest that NCGA has worked with technology providers to "channel" EU-unapproved grain to appropriate domestic feed mills. Through our "Know Where to Go" effort, we have helped producers locate elevators that can use EU-unapproved corn. To reassure our largest customers - the domestic feeding industry - that all U.S. corn can be fed with complete confidence, we have asked hard questions of the biotech providers about feed efficiency and asked for solid information from feeding trials.

Channeling was intended to handle a small percentage of the corn crop - that grain that has not been approved for export to the European Union. The call from some grain processors and exporters to segregate all biotech corn is much more problematic. Obviously, segregation requires additional handling, and not every farmer and elevator will be able to segregate the products during the busy harvest season. At a minimum, producers must isolate the conventional corn from biotech corn production to avoid inadvertent cross pollination. They also must assure that harvest equipment and storage facilities are cleaned to avoid unintended commingling.

Users who prefer the conventional product must be prepared to compensate growers and handlers for the additional time and management to segregate corn production. The premium for conventional corn will depend on the supply available, the standard or tolerance applied and the ultimate demand for conventional corn. Although food safety is not the issue, NCGA policy supports consumer choice through standards for goods that do not contain products of biotechnology. We believe that voluntary labels are preferable to mandatory labels for all commingled products. However, we note that the EU, Japan, South Korea, Australia and New Zealand have all enacted some form of mandatory food labeling. If there is a market for food products that are manufactured without the benefit of modern biotechnology, then growers should expect premiums for conventional corn

Many growers will respond to a premium opportunity to maximize profitability. However, if they did not plan to preserve the identity of their conventional grain, they will have to carefully consider whether they can provide the assurance that their grain meets the specifications associated with the premium. There is no available quick test to detect the presence of biotech product in a load of conventional corn. Growers will be asked to certify that the seed they planted was not sold as a biotech variety and that they handled the grain in an identity-preserved manner. Growers should avoid stating that the grain delivered is free of all biotech material. Later testing may detect the presence of biotech germplasm in even the most carefully handled corn. If either bulk commodity or processed product is sold as containing less than a specified level of biotech product, then testing procedures will have to be validated. Testing and certification will add to the cost of the end product. It is not clear who will bear that cost. The uncertainties come at a time when commodity prices and farm income are low and producers are least able to withstand market disruption.

The decisions growers make for next year's crop will reflect the market situation this fall as well as the expectations about future demand for conventional corn. NCGA will continue our ongoing efforts to ensure that growers have the best possible and most current information as they make their planting decisions. This information is routinely updated on our web site at www.ncga.com.

Technology providers must accept the responsibility of providing accurate information and must assure that their best hybrids are available to all of their farmer customers. Growers who want to meet the demand for conventional corn deserve to have the best hybrids available as conventional seed. Other growers will choose biotech hybrids for the production advantages, but only after carefully weighing the risk of potential marketing difficulties.

INSECTS

One of the most successful products of biotechnology is "Bt corn" or corn that contains a protein from the bacterium Bacillus thuringiensis. This naturally occurring soil insecticide is toxic to the corn borer family of insects, which cause an estimated one billion dollars worth of damage to the U.S. corn crop each year. Incorporating the Bt gene into corn seed controls the corn borer without application of chemical pesticides that might also harm beneficial insects.

As a corn grower, I can assure you that I want to use this technology in a manner that preserves its future efficacy by providing sufficient refuge for non-resistant insects. NCGA has worked with seed companies and product registrants to develop a uniform plan for managing Bt-hybrids. We believe that a consistent message of insect resistance management will address the interests of corn growers, consumers and regulators by providing a practical program, consistent across the industry. This will ensure environmental stewardship and Bt product integrity for years to come.

We want to briefly address the issue of toxicity to non-target species. Last spring the journal Nature published the results of a laboratory experiment that demonstrated that Bt corn pollen is toxic to the larvae of Monarch butterflies. Without considering whether Bt corn poses a serious threat to the Monarch, activist organizations have seized on the Monarch butterfly as a fundraising specie. These purported environmental organizations have never taken the time to evaluate the environmental benefits of biotechnology. We welcome scientific scrutiny, but we resent hasty, unfounded conclusions. Farmers will be receptive to a rational approach, but very skeptical of efforts to condemn the technology.

CONCLUSION

I have laid out for you three of corn growers' current priorities in biotechnology: the potential through genomic research, the current issues affecting marketability of biotech products, and insect resistance management strategies.

As we develop future policies governing biotechnology, we will have to address a number of key issues, including:

· the potential impacts of the industry consolidation that is being spurred by biotechnology;

· the regulatory aspects of grain handling and inspection;

· contracts and alliances between growers and industry;

· infrastructure needs for handling, processing and transporting genetically enhanced and conventional grain;

· unique risk management concerns raised by biotech grain, including pollen drift, the availability of crop insurance products and price discovery; and

· most importantly, consumer acceptance of the final products that result from biotechnology.

Real challenges lie ahead of us as we seek to address these concerns. We need to work together to realize the societal and environmental benefits of biotechnology, and we need to ensure that the additional value resulting from biotechnology is shared throughout the value chain - by industry, farmers and consumers alike.

I appreciate the opportunity to present the views of the National Corn Growers Association - especially given how important biotechnology is to all of us. I would be happy to answer any questions.