STATEMENT OF L. DAN THOMPSON

CHAIRMAN, CORN REFINERS ASSOCIATION, INC.

SENATE COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY

OCTOBER 7, 1999

Mr. Chairman and Members of the Committee: I am Dan Thompson, president and chief executive officer of Minnesota Corn Processors, and chairman of the Board of Directors of Corn Refiners Association, Inc. Minnesota Corn Processors is a farmer owned cooperative based in Marshall, Minnesota, which processes corn into corn syrup, high fructose corn syrup, corn starch and ethanol. We operate plants in Marshall and Columbus, Nebraska, and count as our members 5,400 corn farmer stockholders. I am also the current chairman of the Corn Refiners Association, which represents the corn wet milling industry, and I appear before you today on their behalf.

In 1998, the U.S. corn wet milling industry processed 1.4 billion bushels of the U.S. corn crop into 26 billion pounds of sweeteners, 6 billion pounds of starch, over 800 million gallons of ethanol and 24 billion pounds of co-products. A list of Association members is appended to my statement.

I would like to share with you some of the basic principles with which our industry approaches the issues of agricultural biotechnology and comment on some of the current trends we see developing in the market.

As a company, and as an industry, we strongly support the development of agricultural biotechnology. Corn refiners believe that biotechnology will, among other things, hasten the development of grain that produces new and healthier food, crops with reduced levels of mycotoxins and crops that help our animal feeding industry reduce environmental problems from animal waste and allow more efficient feed use. We view this technology, as with any other technology, as a tool to be used where appropriate to improve our food and agriculture system. The United States had led the way in regulation of biotechnology for agriculture and pharmaceutical purposes. No other country examined the issues involved in regulating biotechnology the way the U.S. did in the mid-1980s. We believe the regulatory processes established by U.S. agencies in response to the coordinated regulatory framework developed then have been scientifically sound and thorough. The end result is the assurance of users and consumers that products on the market are safe for consumption and safe for environmental release.

Biotech crops can help lower farm production costs by decreasing the use of chemicals and pesticides, creating a large side-benefit for our environment in addition to higher yields of some crops. These benefits are weighed by farm producers against the higher costs of biotech seeds and the potential for increased production and stocks.

Today, some of our industry's customers, primarily in foreign markets, are demanding products that are not produced from biotech crops. They want a choice, but that choice comes with significant costs that the market must rationalize.

There are two possible ways to provide these customers with the products they seek.

One is establishing an identity-preserved market for non-biotech products, channeling biotech products into separate markets, as has already been done for products not approved for import by the E.U. This would entail additional costs across the food chain and would require clear thresholds for non-biotech content from foreign customers. Even with such clear marketing conditions, our food system cannot deliver multi-million ton supplies of food or feed guaranteed to be produced entirely from non-biotech crops or materials.

A second response would be to accept the demands of groups who seek a total ban of agricultural biotechnology. This would provide no choice, but would take away valuable tools from farmers and derail the research needed to expand this technology into the area of nutritious foods for developed countries and expanded production for developing countries. This is an unacceptable option. We cannot forego the technological advantages of these products due to the cries of over-zealous or uninformed groups. And, even if agricultural biotechnology were abandoned today, it would take many years to work existing supplies out of the system, making absolute guarantees that food were produced without biotech input impossible.

We believe there must be a choice for all participants in the food chain - including farmers, processors and consumers. Consumers may wish to seek out foods produced without the aid of biotechnology. This is their prerogative, and if there is indeed a strong enough demand, the market will make this choice available. At the same time, we need to respect the rights of farmers to select products based on their judgment of effectiveness and marketability. Each of our member processors has different abilities regarding grain supply and processing facilities. Depending on their abilities, they will respond to genuine market demands.

This situation will be resolved through the market. However, we do believe there are several important roles for government.

In recent months, misleading and erroneous information about the U.S. regulatory system for agricultural biotechnology has been repeated in many publications. We believe all our government agencies have the responsibility to insure the public is aware that the systems they operate on behalf of food and environmental safety are fully in place and operable. They are performing as they have been designed to protect the public they serve.

Agricultural biotechnology has also been involved in a number of specific trade interruptions and disputes. We appreciate the efforts of the various trade agencies of the government to resolve these disruptions. We also believe these efforts must be continued and strengthened, and that there be increased coordination between these agencies in order to make their actions most effective.

Thank you and I will be pleased to answer your questions.