10 April 2002

U.S. Resolved to Harness Full Biotech Potential

A means to alleviate world hunger, State's Larson says

The United States is committed to gaining world acceptance of agricultural biotechnology products as a means of promoting development and feeding the world, says Under Secretary of State Alan Larson.

In an April 10 address to the Commodity Club of Washington D.C. he said that developing countries, including China, the Philippines, South Africa and Kenya, increasingly understand the benefits of agricultural biotechnology such as increased crop yields, reduced need for water and chemical materials and higher resistance to crop stress, pests and diseases.

But Larson said that the biotechnology's potential to alleviate hunger and spur economic growth is threatened by a major public policy challenge in the Europe. Actions of the European Union (EU), he said, not only create barriers to biotech products at EU borders, but also threaten to stop biotech innovation and world trade in these products.

Larson said that a regime proposed in EU legislation on "genetically modified food and feed" would be "onerous, discriminatory, and not likely to offer consumer choice."

And it would affect the agricultural sectors in developing countries most of all, he added.

Larson said that because the United States has the most productive and technologically advanced agricultural sector in the world, the Bush administration is determined to work aggressively to open markets for U.S. agricultural products and resolve related trade disputes.

Recently, he said, the administration has made progress on that front having China to agree to suspend regulations that would seriously disrupt U.S. agricultural exports. It also signed a protocol with Russia that officials expect will lead to the lifting of Russia's ban on U.S. poultry, Larson added.

Following is the text of Larson's remarks as prepared for delivery:

Under Secretary Of State Alan Larson
Agriculture and Biotechnology in U.S. Foreign Policy

Commodity Club Of Washington, D.C.

April 10, 2002

Thank you for your invitation to address the Commodity Club of Washington, D.C., on agricultural trade issues.

Agriculture occupies a place of high importance in our foreign policy. The U.S. has the most productive, technologically advanced agricultural sector in the world. As I tell my friends in Europe, agriculture in America is a high-tech business.

Our high productivity results from market driven investment supported by cutting-edge R&D [research and development], and highly developed infrastructure, including university supported extension services. The U.S. agricultural sector is the biggest exporter of agricultural goods in the world -- $57 billion in projected exports in 2002.

The Administration's foreign policy team is ready to do heavy lifting to resolve agricultural trade disputes.

The President, Secretaries Powell, Veneman, Evans and other members of the Cabinet have recently focused attention on Russia's recent ban on U.S. poultry. The Administration launched a diplomatic effort leading to the signing of a protocol on March 31 that we still expect will lead to the lifting of the ban soon.

The President, during both of his recent trips to China, raised with President Jiang and Premier Zhu our concerns with China's recent approach on regulating agricultural biotechnology.

Together with the work of Secretary [of State Colin] Powell, Secretary [of Agriculture Ann] Veneman, and [U.S. Trade Representative] Ambassador [Robert] Zoellick, the President's intervention led China to implement interim regulations last month specifically designed to address our concerns that their approach would seriously disrupt U.S. agricultural exports. We will now work to ensure that the underlying regulations are as minimally disruptive to trade as possible.

U.S. foreign policy is also devoted to a longer-term struggle to gain world acceptance of agricultural biotechnology products.

Nothing embodies the dynamism and potential of U.S. agriculture more than biotechnology. And nothing would appear to have a brighter future than agricultural biotech products:

• Since 1996, when biotech crops were first commercialized, acreage devoted to biotech crops has grown to over 100 million acres worldwide. Biotech's commercial success is indeed astounding. USDA [U.S. Department of Agriculture] predicts 79 million acres of biotech crops will be planted in the U.S. alone this year, up 13 percent. USDA predicts that 74 percent of soybeans and 32 percent of corn will be planted in biotech varieties in the U.S. this year.

• Biotech corn, soybean and cotton biotech varieties and byproducts (feeds and oils), and related processed foods, are a significant and growing part of our foreign trade.

• Agricultural biotech has demonstrated potential to enhance sustainable development and food security by increasing crop yields, reducing the need for chemical and water inputs and increasing resistance to crop stress such as drought.

• It can also cut losses from spoilage, pests, and crop diseases, extend product shelf life, and deliver life-saving medicines and vaccines more affordably and accessibly to large populations. This new technology will be especially useful for developing countries with growing populations, food shortages, and land, water and other resource constraints.

• The science is also progressing by leaps and bounds, with some of the most promising developments and applications coming from developing countries.

• Last Thursday scientists in China and California announced that they had created the first comprehensive genetic maps of two varieties of rice. These maps are being made freely available to the International Rice Research Institute in the Philippines.

• Scientists like Francis Collins of the National Human Genome Research Institute in Bethesda have hailed the achievement as a "milestone for genetics and biology and, maybe ultimately for preventing world hunger."

There are encouraging signs that developing countries increasingly understand the role agricultural biotechnology can play in their poverty alleviation and overall economic growth strategies.

India recently announced its decision to approve the application of Monsanto and its Indian partner Mahyco for commercialization of Bt cotton. The decision comes after an exhaustive scientific evaluation and mounting pressure from cotton farmers.

The U.S. has for some time urged India to support the responsible use of agricultural biotechnology using a science-based regulatory approach that minimizes risk while offering scope for the development and application of the technology.

Although India has more land under cotton cultivation than any other country in the world, it yields only 655 pounds per hectare, compared to the global average of about 1,430 pounds and 1,690 pounds in the U.S. Thirty percent of India's cotton crop is lost to pests and disease, and approximately $250 million is spent every year in India on pesticides to control the bollworm disease.

Biotech cotton will reduce drastically farmers' costs, boost yields and, consequently, profitability without the attendant adverse environmental and health effects.

China is developing the largest plant biotechnology capacity outside of North America.

The Chinese government funds almost all of its plant biotechnology research and is accelerating its investments in agricultural biotechnology research. It is focusing on commodities that have been mostly ignored in the laboratories of industrialized countries: rice, wheat, potatoes, and peanuts.

Poor farmers in China are cultivating more area of genetically modified plants than are small farmers in any other developing country.

From only 2,000 hectares in 1997, Biotech cotton's sown area grew to around 700,000 hectares by 2000 -- roughly 20 percent of China's cotton acreage. Currently, Bt cotton in China is the world's most widespread transgenic crop program for small farmers.

There have also been breakthroughs in government support for agricultural biotechnology in the Philippines.

The government recently announced commercialization guidelines that can serve as an enlightened model for other countries such as Brazil. In Sub-Saharan Africa both South Africa and Kenya have for several years been in the forefront of biotech crop development, focusing on Bt cotton and sweet potatoes respectively.

European regulatory laws undermine the agricultural trading system and stifle development in poor countries.

In spite of the scientific, commercial and developmental arguments for biotechnology, biotechnology faces a major public policy challenge in the Europe. In the European Union (EU), food safety concerns unrelated to biotechnology are being exploited by politically powerful interest groups which are erecting barriers to biotech products and producing policy gridlock.

EU actions threaten to cast a pall over the development of this technology far beyond its own borders.

The EU's illegal moratorium on approvals of biotechnology applications imposed in 1998 has begun to influence the decisions U.S. farmers make regarding the crops they intend to plant. This in turn dampens the speed and eagerness with which industry develops new applications and brings them to market.

The EU draft legislation on traceability and labeling and on "genetically modified food and feed", in its present form, could halt world trade in biotech products, thereby stifling development of the technology. The regime the EU is proposing would be onerous, discriminatory, and, would not be likely to offer consumer choice. The Europeans are saying, "yes, there's no scientific or health basis for imposing this system, but consumer choice requires that we do it."

U.S. farmers have lost $200 million per year in corn sales since the moratorium went into effect. The EU draft legislation puts $4 billion in current U.S. grain sales, e.g. soybeans/meal, at risk, but the threat is much broader. The impact would be global. The most serious impact would be on the agricultural sectors in developing countries, which would be denied a potentially important tool for eliminating hunger, achieving food security, and spurring economic growth.

At the World Food Summit in Rome, the United States will focus attention on the role of technology and trade in raising agricultural productivity in poor countries and alleviating hunger.

Five years ago, at the World Food Summit, we and the rest of the world committed to a target of cutting in half the number of people in extreme poverty by 2015. This translates to reductions of 22 million per year. Sadly, current data indicate the number of undernourished is falling at an average rate of only 6 million each year, far below our targets.

Raising agricultural productivity in developing countries is the key to the eradication of hunger, which afflicts disproportionately rural populations.

This summer in Rome, when leaders take stock of progress since 1996 and outline a strategy for accelerating the pace toward achieving the Summit's hunger goal, they must agree to harness the full potential of recent advances in science and technology, including biotechnology, in the pursuit of food security.

One area of focus will be on expanding capacity building programs in developing countries that facilitate the introduction and dissemination of biotechnology. USAID, USDA and other federal agencies already have active biotech outreach programs, which include research and development, technical training of scientists, capacity building in biosafety regulatory policy, intellectual property rights and technology transfer, and public and media outreach to promote understanding of biotechnology.

These new programs will be implemented in most cases through public-private partnerships by U.S. universities and industry through collaborative projects undertaken in partnership with developing country institutions.

Trade is an important means of financing sustainable development and raising agricultural productivity.

Developing countries exported close to $2 trillion in goods and services last year. These are real earnings that can be plowed back into real investments to generate future growth. Full liberalization of trade in agriculture could dramatically increase developing countries' exports, with direct benefits for rural poor and our war on global hunger.

Now let me give you some food for thought.

In the 1990's the trading community promoted an information technology [IT] agreement in countries responsible for some 85 percent of the trade in specified key IT products and agreed to move to free trade in those specific products. They agreed to this unprecedented step because they all saw benefit in being part of an efficient global IT market.

If it is important to have free trade and globally efficient production and consumption patterns for semiconductors, wouldn't it also be important to have free trade and globally efficient production and consumption patterns for the staple foods on which all human life depends? Shouldn't WTO countries seriously consider moving quickly toward an open food system? Wouldn't it be a good thing if WTO members greatly reduced tariffs and quotas on staple food products and drastically reduced trade- and production-distorting subsidies for those same products?

Terminating Application of Jackson-Vanik to Russia

While I am on the subject of trade liberalization, let me urge my friends here to support terminating the application of Jackson-Vanik to Russia and extending Permanent Normal Trading Relations.

The Administration believes this would be an important step in recognizing the tremendous progress that Russia has made in allowing free emigration. It is consistent with our democratic values and belief in free trade and an open, market economy. Our foreign policy and economic interests coincide in terminating Jackson-Vanik and extending Permanent Normal Trading Relations.

Conclusion

There are important foreign policy challenges facing U.S. agriculture and agricultural biotechnology. We need to continue to work to maintain and expand market access for U.S. agricultural products, not least for promising new technologies.

We need to foster economic growth and development by raising agricultural productivity in developing countries.

As the world's wealthiest economy, we need to ensure food security for developing countries and work to eliminate hunger.

Meeting those challenges successfully is in the interest of our farm economy.

The United States has resolved to exert new leadership in the agriculture sector and to harness the full potential of recent advances in science and technology for the purposes of improving food and environmental security.

In Monterrey last month, we looked at how to finance development in developing countries. In Rome we will see what needs to be done to improve our track record on eliminating world hunger. And when we gather in South Africa for the World Summit on Sustainable Development we will attempt to pull it all together in an environmentally sound agenda.

Our challenge will be to turn the results of those meetings into tangible actions and accomplishments so that in future meetings we can say "we made a difference."

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