1. NDSU Extension The Marketing of Biotechnology Products Phil McClean Department of Plant Science North Dakota State University Biology 600 Biotechnology: Principles and Products Delivered Live and via Videoconference June 1-2, 2005

2. NDSU Extension Major Commercially Grown Biotech Crops In US 2000 1994 1997 1995

3. NDSU Extension Monsanto Worked To Be Seen As Producer Friendly Regulatory process requires field testing Field testing was performed in the US farm belt Monsanto invited farm and community leaders to field days Showed the benefits of GMO crops to local producers When crops first approved in 1995 producer familiar with the new genetics Early adoption seen as a result of pro-active policy of showing the benefits of the technology

4. NDSU Extension Identical to conventional except for one trait Alleviate fear of something new Distinct from other products Focus on the uniqueness regardless of technology Helps to distinguish the product for export markets Marketing Approaches for Biotech Crops

5. NDSU Extension Delivers unsurpassed weed control of both grasses and broadleaf weeds. Provides proven crop safety and performance with patented Roundup WeatherMAX containing TranSorb® II Technology. Excellent flexibility due to a wide window of application. Delivered a 5.5-bushel yield advantage over conventional corn herbicide programs Source: http://www.monsanto.com/monsanto/us_ag/layout/biotech_traits/rr_corn/default.asphttp://www.monsanto.com/monsanto/us_ag/layout/biotech_traits/rr_corn/default.asp (May 31, 2003) Monsanto’s Promotion of Roundup Ready Corn

6. NDSU Extension Transgenic Crops Increasing In the US a Crop (% total acreage) Soybean b Corn c Canola d YearUSNDSDUSNDSDUSNDSD 200054223625-46--- 200168498026-4775 - 200274618932-6680 - 200381749140-75na 200485829545-79na a Source: NASS Planting Reports, 2001, 2002, 2003, 2004

7. NDSU Extension Promotional Points For Biotechnology Crops Economic Benefit to Producer Farm Income Society Benefit to Hungry Planet Farm Production Environmental Benefit to Challenged Ecosystem Pesticide Usage

8. NDSU Extension Source: http://www.novakbirch.com/cbi/update06-11-02/ Benefits of Biotechnology Crops Plant Biotechnology: Current and Potential Impact For Improving Pest Management In U.S. Agriculture: An Analysis of 40 Case Studies http://www.ncfap.org/40CaseStudies.

9. NDSU Extension Benefits of Biotechnology Crops Crops Analyzed Eight cultivars had a significant impact Insect-resistant corn and cotton Herbicide-tolerant canola, corn, soybean, and cotton Virus-resistant squash and papaya

10. NDSU Extension Benefits of Biotechnology Crops Summary for 2001 Grown Crops Farm Income Impact $1.5 billion increase Food Production Increase 3.7 billion pounds increase Production Costs $1.2 billion decrease Reduced Pesticide 46 million pounds decrease

11. NDSU Extension Benefits of Biotechnology Crops Projected Effect For Other Crops Diverse Crops Considered Apples, barley, eggplant, lettuce, and wheat New Traits for Other Crops Corn and cotton

12. NDSU Extension Benefits of Biotechnology Crops Project Impact for 2001 Farm Income Impact $260 million increase Food Production Increase 10.7 billion pounds increase Production Costs $400 million decrease Reduced Pesticide 127 million pounds decrease

13. NDSU Extension Benefits of Biotechnology Crops Projected Total Impact for 2001 Farm Income Impact $2.5 billion increase Food Production Increase 14.5 billion pounds increase Production Costs $1.6 billion decrease Reduced Pesticide 163 million pounds decrease

14. NDSU Extension Other Features of The Report Every state in the US would benefit CA would realize $206 million in net value ND would realize >$100 million in net value Significant pesticide in major crop-producing states CA: 66 million lb reduction New crops would realize benefits Raspberry, grape, apple, sunflower, barley and wheat

15. NDSU Extension Effects of Adoption of Biotech Crops In North Dakota Corn (Insect and Herbicide Tolerant) 24.2 million lb reduction in pesticide use Barley (Fungal Resistance; Scab) 1.4 million lb increase in production Sugar Beet (Herbicide Tolerant) 953,00 lb increase in pesticide use

16. NDSU Extension Mandatory Labeling Requirements ImplementedThreshold Level Australia/NZ 1% China None EU 1% Japan 5% Korea 3% Norway 2% Proposed Brazil 4% Saudi Arabia None Taiwan 5% Thailand 3% (corn) 5% (soybeans)

17. NDSU Extension Types of Labels Australia/NZ “Genetically modified” “Not from a GM source” “May contain a GM food due to supply variation Japan “GM” “Non-GM” Norway “Genetically modified X (corn, soybean)”

18. NDSU Extension Problems With Labeling Multiple markets Identity preservation required Not completely feasible Elevators are not ready IP owners not necessarily interested in this approach Lost markets $12 billion (through 2001)

19. NDSU Extension Economic Impact of Biotech Crops Non-industry View of Bt-Corn Profitable in 1996, 1997, 2001 ex. 2001 Added value: $93 million Increased value of harvest: $231 million Added seed cost: $138 million Net value 1996-2001 Net loss: $92 million Increased value of harvest: $567 million Added seed cost: $659 million From: C.M. Benbrook. 2001. When Does It Pay To Plant Bt Corn http://www.gefoodalert.org

20. NDSU Extension Events Important to US/EU Biotechnology Trade Issues 1990 EU approval process implemented 1995 US approves first biotech crops 1994-1998 EU approves nine biotech crops 1996Mad Cow Disease (BSE) and human death linked 1997GMO applications can be submitted to a single country, but other countries can provide comment; labeling becomes an option for traits that can be detected

21. NDSU Extension 1997-2000 Individual countries override EU approvals; Austria, France, Germany, Greece, Luxembourg; EU doesn’t react 1998Last biotech crop approved (carnation); 14 in all approved 1999 Moratorium on new approvals implemented 2000Cartagena Protocol on Biosafety adopted by 130 countries 2000Liability added as a condition for approval of new regulations 2000Starlink, a corn animal feed GMO, found in taco shells

22. NDSU Extension 2001New approvals halted until new regulations are in effect 2002Requirement that all products derived from GMO ingredients be labeled is approved 2003US files complaint calling approval moratorium illegal under WTO policies 2003New labeling and traceability regulations proposed

23. NDSU Extension Labeling Regulations Labeling required for: GMO seeds Raw products (corn meal) derived from GMO seeds Refined products (syrup, oil) derived from GMO seeds (new) Foods made from raw or refined GMO seeds (new) Animal feed derived from GMO seeds (new) Allowed contamination (“unintended prescence”) level: 0.9% Label This product contains genetically modified organisms. Or The product produced from genetically modified (name species).

24. NDSU Extension Traceability Regulations All businesses along the route must trace the product Grower, storage units, transporters, processes Tracing required from farm to fork Businesses must keep track from whom they received the product and to whom they sold it Records must be kept for five years

25. NDSU Extension Economic Effects of Industry Policy McDonald’s and Egg Production McDonald’s is the largest purchaser of eggs Most eggs are produced in large chicken farms Chickens in caged in very crowded conditions Conditions generally considered “inhumane” McDonald’s is requiring 72 inches per chicken Suppliers had to comply by Jan 2003 or lose contract

26. NDSU Extension Largest purchaser of potatoes in the world Originally purchased insect resistant GM potatoes Changed policy over potential consumer objections Monsanto discontinued production of insect resistant GM potatoes (NewLeaf Potato) McDonald’s and GE Potato Industry Policy Dictates Product Acceptability