The world's agricultural system stands at the shores of a technological Rubicon. On the near side, where most farmers toil today, new strains of crops are still largely the product of conventional hit-or-miss breeding. On the distant side, where the advance guard of farmers and seed companies already operates, a revolution in biotechnology awaits, in which scientists can control breeding and engineer new crops by splicing in genes from species near and far.
For some, the biotechnology revolution is a horror. Tinkering with Nature's order, detractors argue, is an illustration of mankind's ultimate arrogance and will backfire when spliced genes escape into the wild and disrupt the ecosystems on which life depends. For others, plant engineering is an inevitable and welcome step forward that will shrink the time and cost needed to develop more nutritious food products. These optimists also argue that biotechnologies can help lighten mankind's tread on the environment. More of Earth's surface is given over to farming than to any other human use; engineered crops could allow farmers to raise yields, producing more food for a growing world population on a smaller area of farmland and relieving pressure on natural prairies, forests and wetlands. Engineered crops could also make it possible to control crop diseases and pests with precision, reducing the need for traditional blanket-spraying of pesticides and herbicides. Skeptics look askance at all these claims, mindful that the same multinational companies that market most of the commercially viable engineered crop strains are also among the world's largest vendors of agricultural chemicals.
Although we side with the optimists, we are concerned that today's debate over genetically engineered food crops is drifting from reality. Cheerleaders have often pretended that engineered crops are no different from earlier agricultural innovations when, in fact, some of these differences are substantial and will require new types of regulatory oversight. Detractors have amplified hypothetical risks in a no-holds-barred assault on crop engineering. Yet the most noticeable impact of their actions has been to hobble application of the technology where its contribution to human welfare would be greatest: in publicly funded crop programs that benefit poor farmers and consumers in the developing world. Advocates for crop engineering often brand public opposition as irrational and ignorant of science. In fact, the level of public ignorance about crop engineering is not appreciably different from other areas of high technology. Reticence stems not from ignorance but, rather, from the fact that a sizeable minority of consumers finds the costs and benefits out of whack. Engineered foods on the market today were designed to allow farmers to save money by reducing the input of expensive pesticides and herbicides; in theory, those savings could be passed on to consumers, but in practice such benefits have been imperceptible at the supermarket checkout stand. Where consumers don't trust public institutions to regulate product safety they are particularly wary of ingestible innovations that are devoid of benefits, even if science declares them safe. That is especially true in Europe, where public confidence is haunted by regulatory failures such as "mad cow" disease and AIDS-tainted blood. On both sides - advocates and detractors alike - long-term strategy has been submersed by short-sighted tactical maneuvering.
Here we offer a strategy for managing this new technology. For advocates of genetic engineering technology, a coherent long-term strategy is badly needed as a guide for private investors and public policy, to ensure that today's squabbles do not derail the technology from achieving its ultimate potential. Public support for crop engineering will swell as the benefits become apparent, just as farmers have embraced engineered crops that deliver tangible benefits such as lower production costs. Indeed, the same consumers who oppose crop biotechnology have embraced biotechnology in other areas, such as in the production of synthetic insulin and other pharmaceuticals. But missteps today will make it hard open markets for these products in the future.
The need for a strategy is particularly urgent because today's impasse over engineered foods is poised to inflict severe collateral damage, specifically to the World Trade Organization and the developing countries. The WTO is becoming a battleground for different and diverging policies on food safety. As Europe tightens access to its market, the U.S. and the E.U. edge ever closer to an outright trade dispute over engineered foods. The outcome of this suicide pact should be obvious to all. Neither side can possibly "win" a formal trade dispute that would force each side to defend mutually incompatible positions. The need to avoid food conflicts at the WTO is particularly acute since freeing trade in food products is one of the most sensitive yet most critical elements of the new round of trade talks launched in Doha, Qatar, this fall.
Developing countries also stand to lose badly from the conflict over engineered foods. So far, the impasse is mainly the byproduct of diverging views in extremely wealthy societies that can afford to be indifferent about agricultural biotechnology. But a growing number of crop biologists and development experts see engineered crops as part of the next frontier for alleviating poverty, a new "green revolution" that will allow poor farmers to meet growing demand for food. From China to Kenya, field trials of crops engineered for greater nutritional content, resistance to disease, longer shelf life, and higher yield are confirming that these hopes can soon become a reality. Yet policies in the advanced industrialized nations are slowing the spread of such beneficial applications. In part, the policy problems stem simply from the shameful under-investment by the advanced industrialized countries in the traditional crop breeding and extension programs that created the first "green revolution." The scientific tools for mapping crop genomes and engineering particular traits are not omnipotent magic wands; they can work only in concert with a broader, sustained program of crop breeding and active efforts to train farmers in the proper use of new varieties and farming methods. The countries that have been most generous in the funding international agricultural research, notably those in Europe, have been least enthused to see their Euros spent on crop engineering. Yet the United States, which has embraced biotechnology, has been proportionately much stingier with funding for international agricultural research. Inappropriate policies on intellectual property - especially in the United States, the epicenter of innovation in crop biotechnology - also unwittingly impede application of this new technology in research programs that are designed to benefit the poorest farmers.
These are complex issues with few villains or white knights. The answers are not simple, so we begin our story by looking at crop engineering from different angles. We recount the science of crop breeding and engineering to reveal what is new (and what is not) about engineered food. We examine the incentives that lead private firms and public institutions to invest in engineered crops; we probe how these foods, and the conflicts they engender, move through the world trading system. Our claim is that the real benefits from engineered food will come from products that are still in laboratories; a viable strategy must therefore deflect today's controversies while promoting the next generation of engineered foods with tangible benefits to consumers. The public interest in advancing this innovation is, in places, quite different from the private interest in pushing particular innovations. Markets by themselves will not allocate resources in crop engineering to activities of greatest public benefit.
In particular, we identify four areas of needed reform. First, although some new regulatory institutions will be needed, developing countries desperately need help in implementing the good regulatory rules that they have already put on the books. Second, a new scheme is needed to provide free access to intellectual property that could benefit low-income farmers while protecting intellectual property for wealthier customers than can afford the technology. Third, industrialized and middle-income developing countries must reaffirm their investments in crop breeding and farmer extension programs. Fourth, efforts are needed - in the US and Europe especially - to contain the conflicts over engineered food and keep them from spreading through trade institutions. Such containment is needed not only in the WTO but also in ancillary institutions such as the Codex Alimentarius Commission, the UN's body for setting food safety standards.
Gene Machines in the Garden
Agriculture emerged about fourteen thousand years ago when nomadic, foraging humans gradually settled in areas rich with wild plants and animals. The earliest evidence of plant domestication dates to about 9500 BCE in the valley of the Jordan River; the first crops were probably seed grasses such as barley and wheat similar to the wild plants already part of a foraging diet. These ancient foragers-turned-farmers began selecting seeds that yielded heavier grains, greater resistance to pests and other easily recognizable beneficial properties. Ever since, humans have deliberately altered the genetic code of plants; today's domesticated plants bear little resemblance to their wild ancestors and most could no longer survive in the wild at all. Domesticated corn is radically unlike its short-stalked and scrawny-eared wild relatives in appearance; modern tomatoes, resplendently plump and same-shaped on the supermarket shelf, seem alien next to their multicolored grape-sized ancestors; sorghum, wild only in the tropics, is so transformed today that some varieties thrive even in the frigid Dakotas.
Until barely a century ago, crop improvement proceeded through the instinct and experience of farmers who, after Nature had done the breeding, eyeballed the offspring and selected the best. Each farmer was his own agricultural research station; progress with existing crops came mainly from lucky pollinating breezes and chance encounters. The discovery of crop genetics-technically by Gregor Mendel in the 1860s but only permanently when Mendel's work was "rediscovered" in 1900-made it possible to decipher the genes that caused particular traits. The new field of statistics made it possible to relate pedigrees to outcomes and to select the plants with the best genetic codes. Equipped with theory and method, scientists could now systematically develop new crop varieties. Creating a superior plant often required, for example, propagating many wild varieties as "pure lines" through self pollination, observing which were best and then selecting them for cross-breeding to produce hybrid progeny. With armies of scientists deployed in experimental fields, breeding could be controlled to a point by covering flowers with bags and clipping pollen-laden stamens to ensure that only the best pollen found a mate. Scientific breeding, although more precise than hit-or-miss crossing, was labor-intensive and clumsy. Still, it delivered impressive results.
Among the first successes was hybrid corn, invented in 1856 and applied widely in the United States starting in the 1920s by private seed companies that bred high yielding hybrids and sold them to farmers. Although many factors have contributed to higher farm productivity in the twentieth century, by 1997 average American corn yields - composed almost entirely of hybrid corn - were 8 tons per hectare compared with 1 ton per hectare in 1930. The obvious potential of hybrids and other agricultural innovations inspired Norman Borlaug at the Rockefeller Foundation to create a program that would diffuse these innovations to developing countries, initially in Mexico and then through Latin America and worldwide. The innovations, first in corn and wheat and then extended to nearly all major staple crops, allowed developing countries such as India to increase crop production so rapidly that they nourished an ever-increasing population even as they switched from being food-dependant importers to net exporters. While the Rockefeller and Ford Foundations sowed the seeds of this "green revolution," today their work is institutionalized in a network of 17 research stations, comprising the Consultative Group for International Agricultural Research (CGIAR) and funded by the World Bank and national governments.
Thus the question of intervening in Nature's genome, adopted as a rallying cry by biotechnology opponents, actually began long ago and has spread to nearly every corner of the globe. By and large, as farmers have more fully understood and manipulated crop genomes and ecology, they have served consumers better while treading more lightly on nature. In the U.S. and later in Europe and Japan, the percentage of land devoted to farming has shrunk consistently since the introduction of higher yielding varieties in the early twentieth century made it possible to grow more food on less land. In countries where yields have been growing rapidly, some croplands have even reverted to natural grasslands and forests. Paul Waggoner at the Connecticut Agricultural Experiment Station and Jesse Ausubel at Rockefeller University predict that cropland worldwide could shrink by another one-third if farmers continued to increase their yields. In practice, this will require applying ever-better modern "unnatural" varieties. Where people have tried to reverse this outcome, the shift "back to nature" has been costly. Although organic farming has revived useful methods of traditional plant husbandry, in some cases it has exposed humans to increased risks, such as toxic fungi that thrive without fungicide applications abhorred by organic advocates.
Over the past 30 years, a cluster of technologies, known broadly as "genomics" and "transgenics," have laid the foundation for a new green revolution. Genomics is the application of new statistical and computational methods to the problems of mapping plant genomes and discerning the functions of individual genes and clusters of genes. The resulting gene maps can guide the creation of new plants. "Transgenics" makes it possible to alter ("engineer") the genetic code. Traditional cross-breeding co-mingles the genomes of both parents, a much less precise procedure. Genomics allows scientists to transcribe the melodies and symphonies played by modern plants; transgenics lets them tinker with individual notes.
Genomics alone is a powerful tool because a precise genetic map makes it easier to focus traditional breeding programs. Fuller investment in genomic techniques will yield better performance for every dollar invested in conventional crop improvement programs. Even without genomic maps, scientists have made some headway with transgenic tools. All existing transgenic crops, such as herbicide resistant soybeans or a pesticide-producing corn, cotton and potatoes, are based on engineering traits coded by single genes. All of these engineering feats were accomplished before fully mapping the host genomes. Columbus managed to land successfully on American soil without a full map of the Atlantic Ocean or satellite weather photos to warn of impending storms - he charted his course without clearly knowing where he was headed, but that approach is risky and inefficient. The full benefits of genomics and transgenics are realized only with advances on both fronts in tandem.
Genetic engineering begins with the transfer of genetic material between organisms. The most common method involves a bacterium or virus that shuttles the novel DNA into target cells. Other methods include the use of a "gene gun" to shoot DNA-lathered "bullets" into the cell. Still other procedures smuggle the foreign DNA across the target cell's membrane by cloaking it inside fatty molecules. The DNA sequence inserted into the cell's genome consists not only of the novel gene itself but also "promoters" that regulate the level at which the novel gene is expressed. Because the DNA "package" is randomly incorporated into the target cell's genome, a promoter could conceivably "turn on" dormant genes in the target cell's genome, with unpredictable results. As in normal plant breeding techniques, which also occasionally yield dysfunctional and strange results, the resulting organism must be screened carefully to ensure its properties are intact.
Typically, only a small fraction of these genetic packages actually land inside a target cell's genome. Until recently, the sole method for isolating successfully-engineered cells from the large bulk of cells left unchanged by the process required adding a "marker gene" to the DNA package that would make its recipient resistant to antibiotics. Submerged in an antibiotic rich environment, only the cells that had successfully incorporated the antibiotic marker-and the rest of the "package"-could survive. One of the earliest controversies over crop engineering sprung from the fear that planting genetically-engineered organisms on a commercial scale could cause the widespread emergence of antibiotic resistant organisms. Although the real risks of antibiotic markers have been hotly debated, the European Union has required a phase-out of antibiotic markers by the year . The controversy has forced scientists to invent alternatives, and this particular reason for opposing genetic engineering is now waning.
Once isolated, genetically-engineered cells are cloned to create many identical copies of the genome and then grown into identical plants. Genetic engineering research is active mainly for organisms in which scientists can clone offspring. In general, it is much easier to clone plants than animals because many plant varieties can regenerate whole organisms from a single cell; in many animals, only special "stem cells" have this property. With plants, engineering is particularly active in the major food crops and in hardwood trees, all of which are easy to clone. Genetic engineering of softwood trees has not been pursued because there is no cost-effective way to clone conifers.
Investors at Bay
While the genetic revolution offers great promise, its actual impact on food supply has barely begun. The engineered food products that are commercially available today all involve transfers of single genes, which are easier to control and achieve than multi-gene transfers that code for complex properties. The commercial success of these single gene products has depended on their relevance to farmers. One successful cluster of genetically engineered plants have been bred to produce the bacterium bacillus thuringiensis ("Bt"), a naturally occurring pesticide. Cotton, corn, tobacco and potatoes account for nearly all plantings of Bt-engineered crops. Two-thirds of U.S. cotton and one-quarter of U.S. corn are Bt-engineered. By building in resistance to the European corn borer and other hungry insects, these transgenic crops have reduced the need for heavy applications of insecticide, making it possible to lift yields and lighten the impact of farming on the environment and on the health of farm workers. The actual impact of Bt crops on the consumption of pesticides is hotly contested. But for cotton-which accounts for more pesticide application than any other crop in most of the regions where it is grown-Bt engineering has sharply reduced the volume and frequency of insecticide applications.
The other successful cluster of genetically modified plants is engineered with a gene that confers tolerance to the herbicide glyphosate. Having sown a field with these hardy plants, farmers can spray this single herbicide instead of multiple weed-killers tailored and timed to fight the panoply of weeds that impede crop growth. This simpler, more effective weed control program has reduced costs: growing a bushel of glyphosate-tolerant soybeans can cost up to one-third less than producing the same quantity of their non-engineered cousins. In a business where profits depend on thin margins, these substantial cost reductions explain why genetically engineered soybeans have diffused into widespread use more rapidly than any other innovation in agricultural history. Farmers harvested the first commercial crop of these soybeans in 1996. Only five years later more than 60% of the U.S. soybean crop was glyphosate tolerant. In Argentina, the world's second largest grower of engineered soybeans, 90% of the crop is glyphosate tolerant. Even in Brazil, where it is still illegal to grow engineered crops commercially, perhaps one-third of the soybean crop is engineered - sown with seed smuggled from Argentina. Surveys suggest that farmers will continue to plant large quantities of these beans even though many could earn slightly higher prices if they sold soybeans certified free of genetic engineering. Similar economics explain the rapid adoption of rapeseed (an oilseed known as "canola" in the U.S.) engineered for glyphosate tolerance.
Understanding why these products have been first to succeed is key to understanding the larger predicament for genetically engineered foods and important for mapping out a strategy for the future. Industrial farming has a long value chain. The front end of this chain consists of innovators, such as DuPont, Monsanto and Syngenta, selling seeds and chemicals to farmers. Monsanto, for example, sells both glyphosate (Roundup®) and glyphosate-tolerant (Roundup-ready®) seeds. It remains the world's largest producer of glyphosate even after its American patent on the herbicide expired in . Farmers profit from reduced costs and boosted yields, exactly the properties of the products they have embraced. This marriage of powerful interests at the head of the value chain has explains why a recent study by Jose Falck-Zepeda, Greg Traxler and Robert Nelson found that more than half the value created worldwide by the innovation of glyphosate tolerant soybeans flowed to industry (mainly Monsanto) and farmers (mainly in the U.S.). Consumers gained, but they did not notice because few eat soybeans straight from the farm. Instead, they consume the product after it has been processed into a form, such as salad dressing, in which the soybeans and oilseeds account for only a tiny fraction of the final cost. Nonetheless, the benefits to farmers have been substantial and not only in the advanced industrialized world. A similar study by Falck-Zepeda and his colleagues shows that most of the benefits from reduced use of pesticides in growing Bt-Cotton in Mexico have gone to farmers themselves in the form of lower production costs and greater profits. Overall, these economists have demonstrated that to date, 99% of the world benefits have come from two gene types (Bt and glyphosate resistance) in four commercial crops in three countries.
This approach, guided by the interests of large industrial producers, will never realize the technology's full potential. First, a producer-focused approach is probably not stable because consumers are fickle. Today, although hundreds of millions of consumers eat genetically modified food, few if any do so because they want to. Rather, the technology diffuses into markets because producers are enthusiastic and consumers are mostly indifferent. Opponents have worked feverishly to brand food products unsafe and in some of the world-notably Europe-they have succeeded. (Similar efforts to brand engineered cotton as unsafe have been less successful; people do not eat cotton, although a few firms such as Patagonia based in the US have eschewed engineered cotton and require all their source to be organically grown.)
The looming danger for producers is not that consumers worldwide will oppose biotech foods en masse but that even a fraction of consumers - as few as 10% - in major markets will demand food free of engineered crops. Processors and retailers, at the middle and end of the food value chain, add most of the value that is reflected in the final price of most products on the market shelf. For them, it is cheaper to produce a single line of products that is entirely free of engineered food than it would be to produce parallel, segregated lines or to lose market share to those who certify their products to be GM free. At the bottom end of the value chain, goods-producing firms are more likely to be risk averse because their brands are exposed directly to consumers. They will drop engineered foods if they perceive consumer sentiment tipping; supermarkets and food processors in Britain dumped engineered food products when the British public, after cautiously embracing some engineered foods in the middle 1990s, became hyper-sensitive to food threats in the wake of the mad cow disease debacle. American food processors have been supportive of the innovation of engineered foods, but they too will abandon ship if the public opposition grows, even at the margin. Glimpses of discontent are already evident in the U.S., where Trader Joe's has pledged to certify that all its food products are free of food engineering by 2002.
Every study that has analyzed the long-term potential for this technology has concluded that the greatest benefits of genetic engineering will come from "output trait" crops that yield direct benefits, such as better nutrition, to consumers. To some degree, these products are marching through the pipeline already. Which of the next generation actually makes it to market will depend on the incentives for innovators to sustain the investment needed to test, approve and market the product. In probing the factors that determine those investments, it is useful to look at two markets: first, markets in the rich, industrialized countries where private firms invest in GM technologies, selling their products to well-organized farmers, food processors and retailers; and second, markets in the lowest income societies where purchasing power is low and technologies often diffuse through government training programs and word of mouth. The sources of and remedies for under-investment are quite different in the two markets.
In high-income markets, genetically-engineered technology cannot be sustained without preserving the commercial incentive for private firms, which hinges on two factors. One is the assurance that innovators will be able to protect their intellectual property. Here, all the advanced industrialized nations agree that strong intellectual property protection is essential to encouraging innovation. The other factor is generating confidence in producers that successful innovations will clear regulatory hurdles. On that score, the major industrialized countries have diverged; for the foreseeable future, its permissive and science-based regulatory system will make the U.S. the most likely first market among advanced industrialized countries for novel foods.. So we focus here on the U.S. and return, later, to the problem of closed doors in Europe.
Clearing regulatory hurdles is not an easy task, even in permissive markets such as the U.S. The products that are most likely to deliver benefits to consumers, such as vitamin-enriched "nutriceutical" foods or fruits engineered to deliver vaccines in easy-to-digest format, are most difficult for mature regulatory systems to handle precisely because of their novelty. Advanced food safety systems all operate on the principle of precaution; regulators tend to err - though to different degrees - on the side of safety and extensive testing. Moreover, even after regulatory approval, successful marketing requires firms to combine many diverse talents simultaneously: invention, regulatory approval, and end-use marketing. One of the first attempts to market a genetically modified product, Calgene's Flavr Savr® tomato, failed for precisely this reason. Calgene could not combine its substantial talents in gene engineering with adequate skills in the traditional breeding programs needed to produce varieties of the Flavr Savr® compatible with diverse growing conditions. Nor was Calgene able to build a supply chain to move its tomato from the field into the hands of consumers, despite a clear customer willingness to pay a premium for the tastier fruit. In contrast, the first generation of "producer" products-such as glyphosate tolerant soybeans and Bt corn-rapidly penetrated the market because U.S. regulators treated these products as "substantially equivalent," the products commingled and moved with existing commodities, and consumers were largely indifferent.
It will be tempting for biotechnology advocates to argue that public welfare demands a permissive regulatory system that can ensure that early products find markets and investments in the technology are not orphaned. However, in the largest market for GM foods-the United States-regulatory systems may have been too permissive in approving GM crops for market. Ironically, overly permissive regulation could make it harder to sustain public support. Without public acceptance, firms are unlikely to invest. For example, the Environmental Protection Agency approved genetically modified Starlink® corn (a Bt variety) in animal feed but rejected it for human consumption because a protein in Starlink® had characteristics that could cause allergic reactions. (Allergy science is far from exact, and thus regulators balk at products that have the look and feel of allergens even when there is no evidence that they actually cause allergic reaction.) Consumers in the US and importers of American corn overseas were outraged when Starlink® showed up in products destined for human consumption. Ultra-sensitive testing equipment made it possible to detect even minute contamination throughout the U.S. corn conveyance system, where animal feed often commingles with the human supply-as do beetles, rat excrement, and other fellow-travelers of farming. The split registration was a severe mistake.
Today, the split registration for Starlink® is viewed as an exception. Nonetheless, it caused severe harm and suggests the need for a more cautious approval system. Imagine the scandal and damage to consumer acceptance of engineered foods if "contraceptive corn" engineered to produce antibodies that attack human sperm co-mingled with the sweet corn on its way to dinner tables. (The San Diego biotech firm that invented this product claims that it will prohibit plantings near other corn fields, which is an assurance that sounds much like the one given by the inventers of Starlink corn when they sought split registration and assured the U.S. government that farmers would not commingle corn for animals with the human supply.) Even tighter control and caution will be needed in approving genetically modified animals, not least because animals are typically more mobile than plants and thus errors can propagate quickly. Innovators were lucky that the controversy over Starlink subsided after only a few months; unless the new products offer exceptional benefits, the public will tolerate few failures and opponents of the technology will ensure that every failure is widely known.
Efforts to apply biotechnology in the poorest societies-where the benefits may be largest-face different hurdles. Three sticking points, in particular, have proved to be the most daunting: financial capital, intellectual property and regulatory approval. In poor countries, funding for crop development and "extension" services that train farmers in new crop procedures have suffered from chronic under-investment. Philip Pardey and Nienke Beintema at the International Food Policy Research Institute have shown in a new study of agricultural research and development that even though total global spending on agricultural R&D has risen dramatically in the last twenty-five years, most of that growth occurred in the 1980s. The 1990s were a period of stagnation and trends to the future do not look promising. In Africa, in particular, there was essentially no growth. Today, rich industrialized countries spend nearly $600 per agricultural worker on public research, whereas average spending in developing countries is less than $10 per worker. Developing countries themselves must invest more in the public benefits of agricultural research, not least because nearly every study has shown that the social return on such investments is enormous. But industrialized countries, as well, must play a role. After peaking in the mid-1980s, the United States Agency for International Development's funding for public agricultural research in developing countries has declined in real terms by a factor of 5. The total budget for the CGIAR system has barely changed in real terms over the last 15 years.
Money alone will not unlock the potential of transgenic technologies in the developing world. Intellectual property is another barrier, and a durable solution will require a complete rethinking of the models we use for assigning ownership and sharing of intellectual property rights. At the core of this problem lies the fact that modern plant varieties combine dozens or hundreds of innovations; it is practically impossible to quantify ownership for plants with such complicated heritage. Modern wheat varieties, for example, are the accretion of dozens of crop breeding results that date back to the late 19th century. Yet the complex international legal arrangements that govern the intellectual property embodied in such plants have moved steadily toward greater claims of ownership. When beneficiaries of new plant species are able to pay, there may be no alternative to delineating the ownership of each component of modern plant varieties and requiring users to license each at a cost. But for poor farmers - and for national agricultural research centers in developing countries and the international research centers of the CGIAR - there must be a mechanism for granting free use of the genome. In their recent, comprehensive assessment of crop biotechnology in Africa, Joe DeVries and Gary Toeniessen of the Rockefeller Foundation have confirmed that these two factors - lack of investment in traditional crop breeding programs (notably investments to train farmers how to use advanced crops) and overly strict intellectual property - explain much of the difficulty in diffusing this technology into field application.
The last decade has been an uncertain period for rules that govern agricultural intellectual property. In the early 1990s, industrialized and developing countries, though animated by different visions, pushed for stronger protection of intellectual property. Developing countries saw the movement as a potential goldmine; they would be able to serve as the source of most of the raw, wild strains of crops that are protected in seed banks and used to breed improved crop varieties. Public agricultural research centers as well as private seed companies used the germplasm, which traveled free, to generate improved crops. Industrialized countries, especially the integrated seed companies, viewed stronger intellectual property protection as a way not only to reap larger rewards from traditional crop breeding programs but also to protect the engineered genes. Private companies sought outright patents for their gene engineering work, rather than the traditional, weaker method of protecting crops through "plant breeder rights," to maintain their monopoly on the benefits from their innovations. This system is now coming partially undone, but aggressive efforts are needed to loosen intellectual property rights even further. The international community has taken an important first step by adopting the International Treaty on Plant Genetic resources in Rome in November 2001. The Rome Treaty requires plant breeders to allow easy exchange of germplasm for all major staple crops (except soybeans) and to pay royalties to an international fund that will help protect the biodiversity that is the original source of raw breeding material. This approach will make it easier to conduct traditional breeding programs, but it does little to address the need for applying crop biotechnology; the innovations of genetic engineering are not included in the Treaty.
On this topic, as in so much of world politics, the behavior of the U.S. matters most. The U.S. has not accepted the Rome Treaty but plans to abide by most of its provisions. That step is a good start, but the United States must be held to its promises. But much more is needed. Private firms and research universities in the U.S., along with the U.S. government, must devise a plan to deliver crop engineering techniques to the poorest farmers while, at the same time, ensuring tight intellectual property protection for commercial uses of those same technologies. As the innovators of "golden rice" discovered when they explored how they might deliver their vitamin-enriched product to real people in developing countries, dozens of intellectual property protections can lock up even relatively simple crop innovations. More complex future products that can deliver even greater benefits to developing countries will face an even more complex patchwork of property claims. So far, these obstacles have not been severe in practice in part because the industry, reeling from public opposition to its technology, has been prone to give away its intellectual property for highly visible public research programs. Monsanto has made its sequence of the rice genome freely available to researchers. Along with other companies, it has also donated intellectual property used in the golden rice innovation. Monsanto CEO Hendrik Verfaillie announced in November 2000 a "new pledge" that expanded the firm's commitment to supplying technologies for global public benefits. Such firms would benefit by institutionalizing a mechanism for delivering technology for widespread use to benefit the poor while still protecting their right to sell at a profit in markets where farmers and consumers can afford the innovation.
Ironically, the biggest obstacle to devising such a scheme may come from the actors who have paid the least attention: American universities. Ever since the 1980 Bayh-Dole act made it easy for universities to claim the intellectual property from government-funded research, patent filings on university innovations (especially in biotechnology) have exploded although few universities have actually seen much profit from the property they have claimed. Universities stand to lose little from a smoother mechanism for diffusing crop biotechnology to low-income consumers and farmers. The biggest challenge is not the concept of pooling intellectual property for benefit to developing societies; rather, it is convening all the actors and putting the institutions in place to make this a reality. With the U.S. ever-stingier in its funding of crop breeding programs and a tight fiscal climate making it hard to envision reversing this trend, an overt effort by U.S. industry and the government to assemble such a program could be its largest contribution to developing country agriculture and would not require any on-budget expense. It would merely codify the reality today. For firms such as Monsanto, explicitly tying the output of innovation to benefits that flow to developing countries could also ameliorate the public relations nightmare that has befallen the company.
Finally, reforms are needed in the regulatory systems that will govern how these technologies are applied in the field. As in the industrialized world, the problem is a combination of hurdles that are too tight in countries where opponents of biotechnology cast their shadow and too lax where the innovative activity is most intense. As Rob Paarlberg of Wellesley College has shown in his detailed study of agricultural biotechnology in major developing countries, fear of retaliation by importers - especially in Europe - has led many developing countries to approach the new technology cautiously. At the other extreme is China, where authoritarian rule has made it possible to squelch dissent but has resulted in regulatory rules that are too lax. After the U.S., China is probably the second most active center of innovation in crop engineering; yet despite recent improvements, the Chinese system for overseeing field trials and approving novel crops is both lax and opaque. As Joel Cohen of the International Service for National Agricultural Research has argued, enhancing the use of biotechnology for the poor is not only a matter of investment in the research itself but also in the "biosafety" mechanisms needed to assure that the research does not go awry. Advocates for biotechnology in industrialized and developing countries alike have a common stake in making these investments. Shepherding genetic engineering is much like assuring public acceptance for nuclear power: a failure anywhere in the world harms the industry everywhere.
New policy initiatives are clearly needed in these three key areas: funding for crop research and extension agencies, mechanisms for managing intellectual property rights, and a less cumbersome regulatory system. However, attention must also be given to the problem of rhetoric. Much of the current debate is cast in terms of "feeding the poor," a phrase that creates a false dialogue. The world can feed itself now and for the foreseeable future without transgenic crops. What is really at stake is how people eat and how farmers grow food. Transgenics - not alone, but in tandem with conventional breeding - will achieve much better nutrition with lower levels of dangerous pesticide residues. Higher yields and more precise pest control will allow farmers to supply the necessary quantities of food from a minimal area of cropland, thus lightening the environmental impact of agriculture. As long as the debate is cast in terms of feeding the world, instead of in language describing the quality of food and the impact of farming, the benefits of transgenics will not be understood.
A Great Transformation
Some of the most difficult policy issues in managing transgenic food technologies arise in the international institutions that oversee trade, and in particular, in the World Trade Organization (WTO). Problematically, the WTO is both cause and emblem of a great transformation in world trade law. Traditionally, trading rules acted at national boundaries, dealing with tariffs and quotas that governments could directly control. Also, traditional trade law made a clear distinction between products and production methods. Governments could control trade in products so long as they did not discriminate and did not exceed agreed limits on tariffs and quotas. Trade rules that targeted production methods, however, were off limits. Both traditions may now be on the verge of extinction, but the dinosaurs are not dying quietly.
The WTO's reach now extends far beyond national borders to include "internal" policies, such as food safety standards, that affect a country's importation regulations. In creating such rules, the WTO's architects attempted to strike a careful balance between the need to avoid discriminatory or protectionist policies and the prerogative, correctly reserved to individual nations, to set and implement their own internal food safety regulations. Similar issues arise with "technical" rules such as labeling, which can impose additional costs and stigmas on products that must be labeled. Moreover, although the WTO's architects apparently did not contemplate the possibility of nations using trade restrictions as levers on other countries' production methods, recent legal disputes within the WTO have introduced that possibility. In particular, in the fall of 2001, the WTO's Appellate Body upheld an American restriction on shrimp that were caught in a manner that killed sea turtles. At least in some cases, it would seem, the WTO will allow countries to use trade barriers to enforce ideas about unacceptable production methods.
Trade disputes over genetically modified foods put these issues into sharp relief. GM producers claim that their products are the same as conventionally bred crops because both types of crop are equally safe to humans. By that logic, modified crops should not face special labeling requirements, and governments should not ban imports of modified crops. Opponents, especially in Europe, argue that the crops are different for three reasons: first, the crops might be dangerous for humans to eat; second, production of the crops might cause harm to the environment if genetic engineering experiments go awry; and third, growing modified crops on extremely large scales might cause long-term damage to the environment. This conflict is reflected in the current standoff between the U.S., the world's largest exporter of genetically modified foods, and the European Union. The EU, which had previously approved more than a dozen varieties of genetically modified crops, has halted approvals of new GM technologies for nearly three years and will soon require any product containing even the smallest quantity of the engineered genes to bear a consumer information label.
Counter-intuitively, the best remedies to the EU-US impasse lie almost entirely outside the field of trade law. If nations were to make a concerted effort to clarify the trade law they would probably fail. Current efforts focus on the Codex Alimentarius Commission, a joint body of the Food and Agriculture Organization and the World Health Organization that adopts food safety standards to be used in WTO disputes. For more than four years the Commission has attempted to clarify concepts such as the "precautionary principle," which is used especially in Europe to justify strict food safety rules. More recently, the Commission has launched a process to set detailed standards for genetically modified crops. These efforts have achieved little and are doomed to fail. Views across the Atlantic diverge too widely to find a meaningful compromise, especially one that would be codified into standards that could have binding application in trade disputes.
A better approach would begin by recognizing the enormous achievement so far: despite completely contradictory policies on genetically modified foods, the E.U. and the U.S. have not filed a single formal trade conflict. Instead, they have found ways to accommodate each other's interests. Corn growers, for example, are preparing a program to deliver segregated corn to the European market so that, in effect, U.S. exports will be unaffected by the European wariness about genetically modified corn. Soybeans, of equal importance for US exporters, have not thus far flared into a trade conflict; most soybeans exported to Europe go to animal feed and much of the soybean oil produced in Europe is re-exported. The only way to sustain this delicate dance is to keep dancing. The needed actions and measures are too complicated to write into a formal trade agreement. Moreover, neither side would be willing to acknowledge formally this sensitive and, until now, implicit game.
Launching a formal trade dispute would push the sides into opposing corners. The United States launched a trade dispute in  claiming (correctly) that Europe's ban on importing beef produced with hormones was not based on science. The U.S. won, but their victory may prove in the long run to have been Pyrrhic. Belying the relatively small amounts of trade at stake, American and EU trade negotiators have clashed repeatedly over hormones ever since. The US has retaliated against European products without Europe ever adopting a plan to comply with the terms of the original settlement. In matters involving food safety, which often arouse strong public passions, a clear decision from the WTO does not guarantee compliance. Rather, it can often redouble public convictions that international institutions are stealing their sovereignty. Such battles cannot be won. With bigger matters at stake, such as the success of a new trade round, care is needed to dance around such landmines.
There are worrying signs, however, that Europe does not understand its dance card. The latest round of rules working their way through the European legislative process might include the requirement to that meat fed with genetically modified feed, such as from U.S. soybeans, carry a label despite the fact that no trace of the genetically modified protein appears in the final meat and despite the absence of any evidence that the protein (if present at all) might be dangerous. Rather than attacking the entire EU rulemaking frontally, the US should focus pressure on this particularly egregious provision, hoping that the EU could implement it in a way that would let the dance continue.
The other part of the response to these trade threats involves addressing, individually, the genuine concerns about genetically modified foods. We have cited the three that are used most frequently. Governments could address concerns that GM foods are unsafe with trade measures, such as import bans or labeling requirements. This fear, however, is the weakest of the three. Indeed, to this day the most cited source of evidence that GM foods are dangerous to humans is a series of studies by Arpad Pusztai published in the British journal The Lancet that purported to show that rats fed genetically modified potatoes developed tumors. Those studies were so poorly conducted that they failed peer review. When their existence leaked, however, the political effect was so charged that The Lancet published them anyway, under a disclaimer stating that the article was scientifically unsound. In Europe especially, public fears are so strong that there must be labeling provisions. But the EU has a special responsibility on two fronts. One is to continue with the dance. The other is to improve its food safety system. The European public is fretting about GM foods because they are worried about general food and health safety. Their governments have failed in providing basic functions; a recent effort to restore confidence by appointing an independent advisory committee was rightly seen in Europe as inadequate. Europe needs something like the U.S. Food and Drug Administration.
Addressing the other two worries will require very different policies but offers ways for the US and Europe to cooperate more constructively. One area is in building capacity in developing countries to conduct and regulate crop engineering safely. European nations will be opposed to funding crop engineering activities, but they could find common cause with the U.S. in building up the biosafety capacities in developing countries. The other area of useful joint work is in monitoring large scale planting of GM crops. To date, much of the concern about large scale planting of engineered crops has focused on the Monarch butterfly and the dangers from Bt corn pollen. Yet the primary threat to the Monarch butterfly appears to have been the expansion of eco-tourism into its traditional winter nesting habitat in Mexico rather than the widespread planting of genetically engineered corn. Nonetheless, care must be taken to avoid unanticipated collateral impacts on non-target species when biotechnologies are used, just as is true in use of any pesticide. It is hard to implement large scale planting and monitoring activities through trade measures such as Europe's de facto ban on registering new GM foods. Cooperative programs on the ground, with the results openly published in scientific literature, undoubtedly represent a more sound approach.
Globalization and its Discontents
The furor over food engineering matters not only because it affects the future of the agricultural system but also because it is emblematic of the fits and starts of one of the most pervasive and explosive issues of the twenty-first century: globalization. Originating in the basic research of a few countries, food engineering is now spreading rapidly throughout the world, aided in part by normal channels of commerce. For example, seed companies across the developing world are lining up to sell Bt cotton, benefiting not only innovators such as Monsanto but also local farmers growing the more cost-efficient cotton and the environment, which is subjected to lesspesticide. Through global networks of scientists and research institutions, the genomic and transgenic techniques are also spreading into public research activities.
But like the debate over globalization, the relentless spread of genetic engineering ideas and technologies is, like a Rorschach inkblot, open to several interpretations. Supporters see endless opportunities to create novel products with myriad benefits. They imagine, without considering economic realities, idealized hypothetical products, pointing, time and again, to "golden rice" as the harbinger of good things to come. For biotechnology advocates, the pace of diffusion cannot be fast enough. Conversely, the severest critics of this technology welcome signs that the diffusion of the first generation of engineered crops has slowed and hope to ensure that the second generation remains stuck in field trials and laboratories. They see proponents' arguments as vaporware and public relations, rather than a real concern for the poor.
As in the globalization debate, the divergence of views is particularly sharp where it addresses the role of multinational corporations. During the 1990s, the industry of crop breeding concentrated in the hands of three major corporations: Monsanto, Dupont and Syngenta. All three base their research programs in the United States; even the European firm Syngenta relies heavily on American R&D because the European climate for crop innovation is not nearly as favorable as in America. These firms are likely to absorb their smaller rivals and perhaps even each other. Supporters see this concentration as a necessary transformation. A few consolidated R&D engines will innovate more effectively than a fragmented network of "boutique firms;" sequencing a crop genome, as Monsanto did for rice, is not a modest task. But detractors see a worrisome concentration of power and control, and farmers have long been wary of ceding control to an oligarchy of Goliaths.
As long as the greatest benefits of gene engineering have yet to be realized, advocates of genetic engineering should strive to keep the current, symbol-laden controversies from boiling over while encouraging firms and societies to invest in the generation of products that might deliver the most tangible benefits. Already farmers around the world have seen substantial gains. Field trials have demonstrated the advantages of crops engineered for resistance to disease, drought and salt or designed to deliver higher quality nutrition. In late 2001, Kenyan farmers harvested their first trial crop of sweet potatoes engineered for resistance to an aphid-borne disease that in the past has killed up to 80% of the sweet potato crop. In the words of Gordon Conway, president of the Rockefeller Foundation, a "doubly green" revolution is nearly upon us.
Even Michael Jacobson, head of the pro-organics Center for Science in the Public Interest, recently underscored that "genetic engineering has the potential to increase productivity while protecting our water, wildlife, and farmers better than conventional agriculture can .... Used properly and with adequate government oversight, genetic engineering should be a boon to farmers, the environment, and, especially in developing nations, consumers." The benefits of this technology are becoming apparent; now is the time to heed healthy skepticism while isolating those who seek a blanket ban on crop engineering. As in the larger globalization debate, skeptics are extremely well organized and influential. Given the potential benefits for the developing world, there is an urgent need for opposition with a human face.
We have argued that sustaining investment in crop engineering will require a complex array of policies. Four, in particular, stand out: First, industrialized and developing countries must work together to implement existing crop safety regulations more effectively. One focus of this regulatory effort should be careful containment of transgenic plants, especially as the routes of "gene flow" from transgenic crops are not fully understood. U.S. planting programs illustrate a safe way forward, with careful control on planting and buffer zones. But the dangers of poor regulation remain. In 2001, for example, transgenic corn was detected in Mexico, which raised fears (so far unfounded) that wild corn relatives and germplasm in major corn breeding programs could be contaminated. All major centers of transgenic crop research and planting already have good biosafety rules in place, partially a result of the adoption of the Convention on Biological Diversity. Implementation of these regulations, especially in major developing countries, remains spotty.
Second, countries must invest in traditional crop breeding and farmer extension programs, which, especially in major developing countries, have languished in the past decade. The conventional argument - that investing in agriculture will help poor farmers and societies - seems to be losing force. Despite evidence of substantial social returns on agricultural investments, external funding for public international agricultural research, such as at the CGIAR centers, has leveled off. The opportunities from genomics and transgenics, however, could generate a new wave of funding, both by making crop research more efficient and by offering tangible and widely-recognized global benefits.
Third, the patchwork of regulatory and legal intellectual property protections has impeded the timely application of crop engineering, especially in programs designed to help poor farmers in the developing world. Some innovations from gene engineering in advanced industrialized countries have "spun off" into low-income societies. But the present method of delivering technology, in which companies use philanthropy to deflect harsh public criticism, is unsustainable. We need an explicit mechanism for reducing transaction costs and facilitating access.
Fourth, countries and international organizations must take great care in managing trade disputes. New international trade rules, such as food safety laws, have extended their jurisdiction to include areas traditionally reserved to sovereign national policy. Democratic countries often find this intrusion hard to stomach. The E.U. and U.S., bruised from past disputes, have recognized the futility of fighting over popular food safety rules. Both should be eager to avoid an open conflict over engineered foods. However, we argue that they are not working hard enough; a formal dispute now looms larger than ever before.
Skeptics of such strategic maneuvering see open markets as the best and most appropriate adjudicator and are wary of any effort to shepherd the technology through the normal filters of competition and profitability. Perhaps they are right. The spectacular fallout from Starlink and the looming trade dispute between the U.S. and Europe suggest, however, just how strongly passions over perceived food safety issues can flare. These public, caustic conflicts have already destroyed much of the market value of the major biotechnology firms and have also impeded the flow of biotechnology to the countries and peoples who need it most. A conscious and deliberate strategy, rather than wistful hope for light at the end of the tunnel, is needed to carry this innovation towards its ultimate and promising future.