From: Rural Advancement Foundation Intl [rafi@rafi.org] Sent: Thursday, December 21, 2000 8:37 AM Subject: RAFI Genotypes: GM Seed 2000 Summary RAFI Rural Advancement Foundation International www.rafi.org | rafi@rafi.org (please visit RAFI's web site for full text version with graphics) Geno-Types - 21 December 2000 Speed Bump or Blow-Out for GM Seeds? Stalling Markets, Taco Debacle & Biotech Bail Outs One week after "biocrats," CSOs and scientists gathered in Montpellier to hammer out rules for regulating biosafety, a handful of Gene Giants are fretting over flattening GM (genetically modified) seed sales. Never before have so many gathered to discuss biosafety for so few. In essence, the $2.5 billion GM seed market is dominated by a single corporation that sells GM seeds for four major crop commodities (soybeans, maize, cotton, canola) in three countries (the United States, Argentina and Canada). The GM seed market represents about 10% of the commercial seed market worldwide. Today, RAFI releases its annual update on seed industry consolidation. "Seed Industry Giants: Who Owns Whom?" is now available on RAFI's web site, www.rafi.org (PDF version only) In addition, RAFI offers the following year-end summary on GM seeds: The area sown to GM seeds increased spectacularly from1996-2000, but weaker growth from 1999-2000 indicates that momentum is slowing. Industry analysts predict that GM seed sales have reached a plateau - and could be flat for the next few years - a trajectory that is considered potentially fatal for a new technology. Facing an infectious lack of consumer confidence in GM foods, the ongoing "taco debacle" (StarLink maize illegally entering the food supply) and Aventis' recent decision to jettison its agbio assets, it's no wonder industry has the GM jitters. Is it a speed bump or blow-out for GM seeds? Clive James, International Service for the Acquisition of Agri-Biotech Applications (ISAAA) is RAFI's source for year 2000 provisional estimates on GM crop area and location.(1) Information on company market share is gleaned from industry analysts, company websites and telephone interviews. The Big Picture: According to ISAAA's early estimates, during the 5-year period 1996 to 2000 the global area of transgenic (genetically modified) crops increased more than 25-fold, from 1.7 million hectares in 1996 to an estimated 43 million hectares in 2000. But the area devoted to GM crops increased at a much slower rate -- an estimated 8% - from 39.9 million hectares in 1999 to 43 million hectares in 2000, compared to a 44% increase from 1998 to 1999. Who sells GM seeds? In a word: Monsanto. The market for GM seeds is overwhelmingly dominated by Monsanto (now owned by Pharmacia). In 1999, Monsanto's GM seeds were planted on 34.8 million hectares (86 million acres) worldwide - approximately 87% of the total area devoted to GM crops in 1999. Global area devoted to Monsanto's biotechnology traits increased a whopping 48% - from 23.5 million hectares in 1998 to 34.8 million hectares in 1999.(2) Wood Mackenzie, agrochemical industry analysts based in London, estimates that Monsanto held an 80% market share for agbiotech in 1999. In RAFI's opinion, Monsanto's true market share for GM seeds is larger; Wood Mackenzie's estimate includes biotech seeds that are not genetically modified.1 (Agbiotech market share includes some herbicide tolerant seeds that are not genetically modified.(3) AgBiotech Market Share, 1999 Monsanto, 80% Aventis - 7% Syngenta - 5% BASF - 5% DuPont - 3% Source: Wood Mackenzie Where are GM crops grown? Just 3 countries, the US, Canada and Argentina account for approximately 98% of the area planted in GM seeds in 2000. China accounted for one percent of the total crop area, and eight other countries account for the remaining 1%.. >From 1996-2000, the number of countries growing transgenic crops doubled, increasing from six in 1996 to twelve countries in 2000. But only three countries, the US, Canada and Argentina, account for 98% of the total GM crop area worldwide. Global GM Crop Projections 2000 - Country and Area (Million Hectares) Change From 1999? United States 30 + 1.6 million Argentina 9 + 2.1 million Canada 3 - 1 million China 0.5 +0.2 million South Africa +0.1 n/a Australia +0.1 n/a Mexico n/a n/a Romania n/a n/a Ukraine n/a n/a Spain n/a n/a Germany n/a n/a France n/a n/a TOTAL 43 + 3.1 million (Based on ISAAA's provisional estimates) What GM crops are being grown? Four crops: soybeans, maize, cotton, and canola (edible rape) account for virtually 100% of the GM seeds planted in 2000. Almost three-quarters (73%) of the transgenic area in 2000 was modified for herbicide tolerance; 22% was modified for insect resistance and 5% of the area was devoted to "stacked" traits of herbicide tolerance and insect resistance. Of the total global crop area (273 million hectares) devoted to four crops (soybeans, maize, cotton, canola), ISAAA projects that 16% of the total- or 43 million hectares – are transgenic. GM crops account for 16% of the world’s total crop area for four major crops: Year 2000 GM soybeans accounted for 58% of the area sown to transgenic crops. GM maize accounted for 12% of the area sown to transgenic crops. GM cotton accounted for 12% of all transgenic crops. GM canola accounted for 7% of the area devoted to GM crops. According to ISAAA's preliminary estimates, GM crops account for: * 34% of the 72 million hectares of soybean planted globally * 16% of the 34 million hectares of cotton * 11% of the 25 million hectares of canola * 7% of the 140 million hectares of maize Future Prospects: Life Industry Doomed or Dormant? Farmers in North America, where over three-quarters of all GM seeds were sown in 2000, are now making decisions about what seeds to plant next year. Their decisions will undoubtedly be influenced by the "Taco Debacle"-- the GM maize that illegally entered the food supply and is now disrupting grain markets and causing prices to fall on the international market. The US government did not approve SarLink maize for human consumption because it could trigger allergic reactions in some people. Lewis Batchelder of Archer Daniels Midland recently told the New York Times, "StarLink has definitely set back the biotech industry, maybe five years."(4) Farmers are wary, consumers are skeptical, and some segments of the food industry are retreating from the biotech bandwagon. As a result, most market analysts conclude that the GM seed market has peaked in 2000 - and we will see little or negative growth during the next few years. Industry analyst Sano Shimoda told Chemical & Engineering News that that market for GM seeds "could bottom in 2001, maybe at the latest in 2002, as the world sets up rules" in the legal and regulatory arenas. (5) Wood MacKenzie analysts based in the UK present three scenarios: 1. Existing GM seed markets valued at $2.5 billion today could grow about 6% per year to just over $3 billion by 2003. 2. If anti-GM sentiments gain momentum, the market will fall to about $2 billion by 2003. 3. If key markets open up in Brazil, India and China, the market will grow an average 10% per year to nearly $3.5 billion in three years. For a detailed analysis on the future of biotech and what's in the GM pipeline, please see RAFI's November/December 2000 Communique entitled, "Biotech's Generation 3," available on RAFI's web site: www.rafi.org Now available on RAFI's web site: www.rafi.org The Seed Giants: Who Owns Whom? December, 2000 Update ___________________________ NOTES: 1 Clive James, International Service for the Acquisition of Agri-Biotech Applications. Provisional estimates were taken from a presentation made by Clive James at the World Food Prize Symposium in Des Moines, Iowa, October 12, 2000. For more information: www.isaaa.org 2 Source: Monsanto Press Release, "Monsanto Reports 1999 Fourth-Quarter And Full-Year Results," St. Louis, Feb.10, 2000. 3 Personal communication with Richard Leech, Wood Mackenzie, December 18, 2000. Wood Mackenzie will release a global review and forecast on GM seeds in January 2001 entitled, "Seeding Growth." For more information: www.woodmac.com 4 Barboza, David, "Gene-Altered Corn Changes Dynamics of Grain Industry," New York Times, December 11, 2000, p. 20. 5 Thayer, A. "Accepting Biotech," Chemical & Engineering News, October 2, 2000, p. 25. RAFI (the Rural Advancement Foundation International) is an international civil society organization based in Canada. RAFI is dedicated to the conservation and sustainable use of biodiversity, and to the socially responsible development of technologies useful to rural societies. RAFI is concerned about the loss of agricultural biodiversity, and the impact of intellectual property on farmers and food security.