July 9, 2008 / 12:27 AM / in 9 years

High prices nudge Europe nearer to GM food

ZURICH (Reuters) - Like many in Europe, Switzerland’s Coop supermarkets do not specify whether goods are genetically modified -- none are. But a wave of food inflation may help wash away resistance to “Frankenstein foods.”

<p>People stand in front of a shop of Switzerland's Coop supermarket chain in Zurich July 7, 2008. The advertising poster reads: "For diversity and treat". REUTERS/Arnd Wiegmann</p>

“I think there’s a lot of resistance in Switzerland,” said shopper Beatrice Hochuli, picking out a salad for dinner at a bustling supermarket outside Zurich’s main station.

“Most people in Switzerland are quite against it.”

Consumers are rarely first in line to adopt new technologies: even with food prices up more than 50 percent since May 2006, according to the United Nations Food and Agriculture Organization’s Food Price Index, relatively wealthy Europeans remain wary of foods derived from tinkering with the genetic make-up of plants.

But policy-makers and food companies are pressing the GM topic in a bid to temper aversion to biotech crops like pesticide-resistant oilseed rape and “Roundup Ready” soybeans, which tolerate dousing of herbicide.

These are already common in the United States and other major food exporters like Argentina and Brazil.

The European Commission has said it believes biotech crops can alleviate the current crisis in food supply, although it added in June that expediency should not overrule strict scientific scrutiny of the use of GMO technology.

The chairman of Nestle, the world’s biggest food group, has said it is impossible to feed the world without genetically modified organisms and the British government’s former chief adviser Sir David King said this week GM crops hold the key to solving the world’s food crisis.

“If you take the pressure of burgeoning population ... we need a third green revolution,” he told the Financial Times, referring to two waves of innovation that helped increase crop yields sharply in Asia in the past 50 years.

Climate change and increasing concern about fresh water supplies are helping to fuel interest with new GM seed varieties likely to be more resistant to drought and able to produce reasonable yields with significantly less water.

GM technology still has many opponents, who fear biotech crops can create health problems for animals and humans, wreak havoc on the environment, and will give far-reaching control over the world’s food to a few corporate masters.

Yet a European Commission-sponsored opinion poll last month showed a creep in knowledge and acceptance of the technology.

“For me it is just a matter of time before we get our head around GM,” said Jonathan Banks at market information company AC Nielsen.

“The way people will learn to live with GM is to say ‘we do it product by product and make sure everything is OK.’ At the moment we have a knee-jerk reaction which thinks of Frankenstein foods,” Banks said.

BIG OPPORTUNITY

The European Union has not approved any GM crops for a decade and the 27 member countries often clash on the issue. Outside the EU, Switzerland has a moratorium on growing GM crops, though authorities have granted permission for three GM crop trials between 2008 and 2010 for research.

The market represents a substantial opportunity for GM companies: the European seeds market is worth $7.9 billion from a global total of $32.7 billion, according to data from consultancy Cropnosis. The global GM seeds market was worth $6.9 billion in 2007 and is set to grow further.

Agrochemicals companies are riding a wave of high food prices and roaring demand for farm goods -- and Monsanto, DuPont Co and Switzerland’s Syngenta AG have all raised 2008 earnings forecasts already this year.

Although high prices are a boon for farm suppliers, much of the cost has been passed on to consumers, sparking protests in many countries including Argentina, Indonesia and Mexico.

Others also see opportunity: in June, chocolate maker Mars Inc, computer giant IBM and the U.S. Department of Agriculture said they would map the DNA of the cocoa tree to try to sweeten the crop’s $5 billion market.

In a Eurobarometer opinion poll in March, the number of EU respondents saying they lacked information on GMs fell to 26 percent, compared with 40 percent in the previous, 2005 survey.

But 58 percent were apprehensive about GM use and just 21 percent in favor -- down from 26 percent in favor in a 2006 Eurobarometer survey on biotechnology.

“People do change attitudes, just gradually, because they become used to technologies,” said Jonathan Ramsay, spokesman for Monsanto, the world’s biggest seeds company. “Consumers are looking at prices, consumers hear the stories about food production, growing population in the world, and I think people do understand that agriculture needs to be efficient.”

Friedrich Berschauer, chief executive of the world’s fourth-biggest seeds producer Bayer CropScience, believes acceptance of GM will be gradual.

“Long-term, I am certain that GMOs will be accepted. But I dare not give a forecast whether that will be in five years or in ten,” Berschauer told Reuters.

SCARING CONSUMERS

But critics charge that the technology does not bring its promised benefits.

A recent report by organic group the Soil Association concluded that yields of all major GM varieties are equivalent to or less than those from conventional crops.

“GM chemical companies constantly claim they have the answer to world hunger while selling products which have never led to overall increases in production, and which have sometimes decreased yields or even led to crop failure,” said Peter Melchett, Soil Association policy director.

Geert Ritsema, a genetic engineering campaigner at Greenpeace International, said proponents of biotech crop technology are using high prices to scare consumers that their food will become too expensive.

More awareness of the technology could also reinforce wariness, argues Jean Halloran, head of food policy initiatives at Consumers Union.

“I think that if consumers become really educated, that’s the point they’ll end up at and say ‘why should I mess around with this technology when it has no benefits to me?',” she said.

Additional reporting by Mantik Kusjanto in Monheim, Germany and Nigel Hunt in London; Editing by Sara Ledwith

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