Biotech giant Syngenta’s fact sheet on a genetically modified corn urges farmers to “plant with confidence,” yet when China rejected this corn because the country hadn’t approved that particular product for its market, the entire U.S. corn industry suffered.
WASHINGTON — An unusual cluster of legal filings in recent weeks has capped a tumultuous year for the Swiss biotechnology giant Syngenta Corp., and highlights ongoing concerns over the inability of the United States to keep genetically modified crops separate from conventional crops.
This month, three class action proposals were filed on behalf of farmers in Illinois, Iowa and Nebraska, with the potential to include almost anyone who grew or sold corn commercially across the country over the past year. The moves came just weeks after similar lawsuits were filed by two of the country’s largest grain exporters, Cargill and Trans Coastal Supply.
All of these legal actions revolve around genetically modified corn hybrids that Syngenta began selling in 2009. While those products have been approved for general use in the U.S., they have not been approved in China, and there is no formal indication as to whether they will be.
The problem for U.S. corn farmers and exporters is that the current commodities system in this country makes it almost impossible to compartmentalize the country’s massive corn production. Instead, corn from different farmers, fields and states is all consolidated as a single product.
Last November, Chinese authorities found traces of Syngenta’s hybrid – known as MIR162, under the brand name Agrisure Viptera – in massive shipments from the U.S. So, they rejected the entire sale, and have taken similar actions since then.
It remains unclear why the Chinese government made this decision. The Beijing government has approved the cultivation of several genetically modified products, notably cotton, and has even given a preliminary nod to hybrid food staples such as rice. It also imports large amounts of genetically modified soybeans each year.
Yet analysts say there exists a distinct tension between the government’s clear desire for greater use of genetically modified agricultural crops and the public’s ongoing suspicion of these products. Last month, the Beijing government reportedly launched a public relations campaign to try to sway public opinion on the issue.
Whatever the reason for China’s refusal to green-light MIR162 products, U.S. farmers, grower associations and trade analysts say the recent rejections have hollowed out the lucrative U.S. corn trade with China. In turn, this has also depressed prices across this country.
“These class actions seek to represent nationwide and statewide classes of growers or exporters relating to the economic losses arising out of the Chinese rejection of U.S. corn as a result of Syngenta’s MIR162 presence in that corn,” Adam Levitt, a partner with Grant & Eisenhofer in Chicago and a lead attorney on the class action out of Illinois, told MintPress News.
“The complainants are asking for monetary damages and other relief for growers and others harmed as a result of what we allege is Syngenta’s improper conduct with respect to the marketing and sale of MIR162 corn seed.”
Billions in losses
MIR162 hybrids have been genetically modified to make corn seeds resistant to several pests. These seeds are currently planted on only around 3 percent of U.S. fields, according to the Illinois complaint, but their impact is being felt across the country.
Levitt’s client, Hadden Farms, says it buys only seeds that have not been genetically modified, but alleges that it has been harmed by this year’s devastated corn market – resulting, Hadden Farms says, from Syngenta’s release of its MIR162 products and the Chinese reaction.
Levitt, who is also the head of Grant & Eisenhofer’s Consumer Practice Group, says the cases are being transferred to a single court for pretrial arrangements, and he is hoping they will all go forward together following a hearing in early December.
While the monetary damages alleged to have been incurred by the plaintiffs have not yet been defined, estimates have been staggeringly high. According to analyses released by the National Grain and Feed Association (NGFA), by April of this year China’s decision had likely already resulted in $2.9 billion in losses across U.S. corn, distillers grains and soy sectors.
The association, which represents companies handling almost three-quarters of U.S. grains, further estimated that losses for the coming fiscal year could be far higher, reaching up to $3.4 billion. This is due to Syngenta’s controversial decision this summer to release a second generation of its MIR162 technology, known as Duracade.
“Following … widespread harm, Syngenta’s decision to release Duracade … again illustrates that Syngenta has acted in reckless disregard of the consequences of inflicting widespread harm to the U.S. corn market,” the Illinois complaint states.
The NGFA, which declined to comment for this story, citing the ongoing legal actions, is quick to note that it is a firm supporter of genetically modified organisms. Indeed, several of the plaintiffs in the new lawsuits are well known for their support of GMOs in industrial agriculture, with Cargill being a notable example. Yet this is also what makes the new cases unique and, for Syngenta, potentially troubling.
“The NGFA stressed that it strongly supports agricultural biotechnology and other scientific and technological innovations,” a release from the association stated when it released its analyses in April.
“However … the impacts of the trade disruptions resulting from the detection of unapproved Agrisure Viptera MIR 162 provides a ‘case study’ on the ramifications of commercializing crop biotechnology before securing import approvals from major U.S. export markets.”
For its part, Syngenta is adamant that it has fulfilled its responsibilities to regulators and farmers. It also appears to dispute the significance of the Chinese market for U.S. corn producers.
“Syngenta believes that the lawsuits are without merit and strongly upholds the right of growers to have access to approved new technologies that can increase both their productivity and their profitability,” a spokesperson for the company told MintPress in a statement.
“Syngenta commercialized the [MIR162] trait in full compliance with regulatory and legal requirements. Syngenta also obtained import approval from major corn importing countries. Syngenta has been fully transparent in commercializing the trait over the last four years.”
The spokesperson noted that since Agrisure Viptera’s approval in the U.S. in 2010, the product has demonstrated “major benefits” for farmers in preventing pest-related losses. Indeed, it is important to note that the new class actions have not been joined by major corn-grower groups.
“The plaintiffs to the lawsuit are individual farmers acting on their own behalf and are in no way representative of the position of state or national corn growers associations,” Jennifer Myers, of the National Corn Growers Association, told MintPress.
Yet the new complaints do not only accuse Syngenta of disregard for its products’ potential impact on the U.S. corn market. Instead, as Levitt, the attorney, notes, they also allege that the company has engaged in misrepresentation around the marketing of its MIR162 products.
“[A]lthough it knew that it lacked approval from Chinese authorities,” the Illinois complaint states, “Syngenta has misinformed farmers, grain elevators, grain exporters, and the general public into believing that regulatory approval of MIR162 corn from China was imminent and that the lack of Chinese approval would not impact the corn market prices.”
In part, these allegations revolve around a fact sheet that Syngenta offers on Agrisure Viptera. Critics say the document, addressed to farmers, plays down the importance of the Chinese market for U.S. corn.
Noting “the recent market noise regarding Chinese import acceptance of corn,” the fact sheet states that “The vast majority of corn produced in the U.S. is used domestically.” It also points to a “misconception that China imports more grain than it actually does from the U.S.”
Citing unreferenced figures from the analyst Informa Economics, Syngenta reports that over the past five years China has imported only around 0.5 percent of all U.S. corn.
“Given that traditional major markets are legally able to accept Agrisure Viptera grain, farmers can have confidence in planting this innovative technology for its potential to increase yield and grain quality,” the fact sheet continues. “Since very few U.S. grain outlets actually export to China, most have no reason to restrict your right to plant the latest technologies.”
Yet the complaint cites U.S. Department of Agriculture data that the U.S. exports up to a fifth of its corn production and that China has rapidly become the country’s third-largest market for this commodity. According to this analysis, Chinese imports were “on track to meet or exceed these numbers” this past fiscal year.
Still, the USDA does acknowledge that China has been a “significant source of uncertainty in world corn trade.” Neither the USDA nor the office of the U.S. Trade Representative agreed to comment for this story.
While the recent spike in legal action around Syngenta’s MIR162 products is notable, this is not the first time that GMO-related regulations in other countries have negatively impacted on U.S. agricultural exports. Last year, for instance, the European Union temporarily froze its approvals process for new genetically modified foods, and dozens of other countries have similarly moved to more tightly regulate their markets.
Meanwhile, airborne “contamination” of traditional crops by the pollen of genetically modified hybrids has been officially confirmed repeatedly in recent years. In a survey released earlier this year, a third of U.S. organic farmers reported having experienced problems in their fields due to the nearby use of genetically modified crops, and over half of those growers have had loads of grain rejected because of unwitting GMO contamination.
The USDA is currently studying whether genetically modified and traditional crops can “coexist.” But others say that conflicts such as the one around Syngenta will continue.
“The broader issue here is around biotech companies introducing products before governments and consumers have accepted them,” Ben Lilliston, the vice president of programs at the Institute for Agriculture and Trade Policy, a Minneapolis think tank, told MintPress.
“The current push for GMO labeling is related to this, too, as it’s concerned with products being pushed onto the market that haven’t adequately been through the regulatory structure that most people think is needed.”
Meanwhile, Cargill and other major grain groups, including Bunge and Archer Daniels Midland, currently refuse to accept any Agrisure Viptera corn. Lilliston says that the new legal actions, particularly by Cargill and Trans Coastal Supply, underscore a broader, though little-discussed, trend in the industry to move back toward non-GMO ingredients, particularly for food products.
“There is today fairly significant growth in the non-GMO market in the United States. Cargill and others recognize that and are trying to figure out how to set up the infrastructure needed to segregate traditional and genetically modified crops,” Lilliston said.
“More and more food companies are rebelling against GMOs because they don’t really get any benefit from using these ingredients. In a sense, they’ve been carrying water for the biotech companies for a long time, and this is now costing them a lot of money to fight the GMO-labeling campaigns. So you’re seeing a lot of fraying.”