Agricultural Biotechnology: Overview and Selected Issues

Order Code IB10131

CRS Issue Brief for Congress

Received through the CRS Web

Agricultural Biotechnology:

Overview and Selected Issues

Updated December 8, 2004

Barbara A. Johnson

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

CONTENTS

SUMMARY

MOST RECENT DEVELOPMENTS

BACKGROUND AND ANALYSIS

Adoption of Biotechnology in Agriculture

Current Applications

U.S. Food Products Containing GE Crops

Future GE Applications

“Input” Traits

“Output” Traits

Regulation and Oversight

Coordinated Framework for Regulation of Biotechnology

USDA’s Animal and Plant Health Inspection Service (APHIS)

Food and Drug Administration (FDA)

Environmental Protection Agency (EPA)

Assessments of Current Policy

Global Trade Concerns

Biotech Wheat

U.S.-EU Dispute

The Biosafety Protocol

GMOs in the Developing World

Other Selected Issues

Food Safety and Labeling

Environmental Concerns

Plant-Based Pharmaceuticals from Biotechnology

In Congress

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Agricultural Biotechnology: Overview and Selected Issues

SUMMARY

Since the first genetically engineered

(GE) crops (also known as GM (genetically

modified) crops, or GMOs, genetically modified organisms) became commercially available in the mid-1990s, U.S. soybean, cotton,

and corn farmers have rapidly adopted them.

As adoption has spread, the policy debate over

costs and benefits has intensified.

Issues include the impacts of GE crops

on the environment and food safety, and whether GE foods should be specially labeled.

Underlying these issues is the question of

whether U.S. regulation and oversight of

biotechnology — with responsibilities spread

primarily among the U.S. Department of

Agriculture (USDA), the Food and Drug

Administration (FDA), and the Environmental

Protection Agency (EPA) — remain appropriate, particularly as newer applications (e.g.,

biopharmaceuticals — drugs manufactured

with the use of GE crops or animals) emerge

that did not exist when the current regulatory

regime was established. Relatedly, USDA’s

Animal and Plant Health Inspection Service

(APHIS) published a notice of intent January

23, 2004, to prepare an environmental impact

statement evaluating its rules.

Some U.S. agricultural export markets,

notably the European Union (EU), have taken

a more restrictive approach to regulating

agricultural biotechnology than the United

States, presenting obstacles for U.S. farm

exports. Now before the World Trade Organization (WTO) is a U.S. complaint regarding

the EU’s de facto moratorium, in place since

1998, on approvals of new GE crops. Even

though the EU says it has ended its morato-

rium (by approving in May a GE variety of

canned sweet corn for import), U.S. agricultural interests are concerned that new, stricter

EU rules for labeling and tracing GE products,

now taking effect, will continue to discriminate against U.S. exports. Also, there is

debate over whether agricultural biotechnology will improve (according to proponents) or

undermine (according to opponents) food

security in developing countries.

In the 108th Congress, interest continued

in the trade impacts and regulation of agricultural biotechnology. For example, the conference report to accompany the Consolidated

Appropriations Act for FY2005 (H.Rept. 108792; H.R. 4818) provides $3.3 million to

USDA for “cross-cutting trade negotiations

and biotechnology resources.” After the U.S.

filed its complaint against the EU moratorium,

the Senate passed a resolution in support

(S.Res. 154), on May 23, 2003. A similar

House measure (H.Res. 252) passed on June

10, 2003. Introduced legislation included

H.R. 2447, H.R. 3472, and H.R. 4651 to

create an interagency task force to promote

agricultural biotechnology; H.R. 2916, H.R.

2917, H.R. 2918, H.R. 2919, H.R. 2920, and

H.R. 2921 to broaden regulatory oversight of

GE foods; and S. 2546, requiring the Food and

Drug Administration to review all GE animals

and plants that may enter the food supply for

environmental and safety issues. None of

these bills was enacted.

The 109th Congress may continue to be

interested in trade impacts and U.S. regulation, particularly the result of APHIS’ evaluation of its rules.

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MOST RECENT DEVELOPMENTS

The biotechnology industry and those in U.S. agriculture who support it continue to face

challenges in winning global acceptance of genetically modified organisms (GMOs). For

example, U.S. officials are challenging in the World Trade Organization (WTO) a longstanding European Union (EU) moratorium on approvals of new GMO crops — even though

EU authorities now claim that the moratorium has ended with their approval, in May 2004,

of a GM variety of canned sweet corn imports. The EU also approved imports of one GM

corn variety for use in food in October 2004, but deadlocked on a decision on a second

variety in November 2004. (The US WTO challenge is still pending.) U.S. agricultural

groups also are urging the Administration to bring a separate WTO case against the EU for

what they say are its equally unfair and unworkable new rules for segregating and labeling

GM foods, feeds, and crops. (At this writing, the Administration has not brought such a

case.) Many EU consumers remain wary of GM products, and market resistance may have

contributed to a May 2004 decision by Monsanto to discontinue efforts to win regulatory

approval of a genetically modified wheat variety.

However, other countries such as Canada, Brazil, Argentina, China, and South Africa

have been generally supportive of agricultural biotechnology, and the Food and Agriculture

Organization (FAO) of the United Nations has given qualified support to agricultural

biotechnology. FAO said in a May 2004 report that it can benefit the poor if farmers in

developing countries could gain more access to it to complement other needed agricultural

improvements.

At home, USDA’s Animal and Plant Health Inspection Service (APHIS) is reviewing

public comments it received on its January 23, 2004, Federal Register notice of intent to

prepare an environmental impact statement (EIS) evaluating its biotechnology oversight

regulations. Observers expect that the agency could propose a number of potentially major

rule changes. APHIS intends to publish a draft EIS by the end of 2004, though it is unclear

whether they will meet that deadline. In November 2004, the Food and Drug Administration

(FDA) published draft guidance for firms to seek a food safety evaluation of proteins they

are using in the early stages of GM crop development.

Also, the Institute of Medicine and the National Research Council released a report on

the safety of genetically engineered foods in July 2004. The report concluded that federal

agencies should assess any genetically altered food — regardless of whether it is developed

through GE or conventional cross-breeding — on a case-by-case basis to determine whether

the newly altered food is different enough (in terms of new compounds or levels of

substances) to warrant further evaluation.

Congress continues to monitor closely all of these activities, and has passed resolutions

supporting U.S. international efforts on agricultural biotechnology. Congress has also

provided significant funding for U.S. biotechnology regulation. In the FY2005 USDA

appropriation (H.R. 4818), Congress funded USDA’s Biotechnology Regulatory Services

(BRS) office at $9.5 million, almost twice the FY2004 enacted level of $5.4 million.

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BACKGROUND AND ANALYSIS

Adoption of Biotechnology in Agriculture1

Farmers have always modified plants and animals to improve growth rates and yields,

create varieties resistant to pests and diseases, and infuse special nutritional or handling

characteristics. Such modifications have been achieved by crossbreeding plants and animals

with desirable traits, through hybridization and other methods. Now, using recombinant

DNA techniques, scientists can genetically modify plants and animals by selecting individual

genes that carry the desirable trait (e.g., resistance to a pest or disease) from one organism,

and inserting them into another, sometimes very different, organism, that can be raised for

food, fiber, pharmaceutical, or industrial uses.

Since genetically engineered (GE, sometimes called genetically modified or GM) crop

varieties first became commercially available in the mid-1990s, U.S. soybean, cotton, and

corn farmers have been rapidly adopting them in order to lower production costs and raise

crop yields. Proponents point to a so-called second generation of GE commodities that could

shift the focus of biotechnology from the “input” side (i.e., farm production benefits) to the

“output” side (i.e., consumer benefits), including products offering enhanced nutritional and

processing qualities, and industrial and pharmaceutical uses. Future products could be

livestock as well as crop-based. Critics, meanwhile, complain that biotechnology companies

generally have not yet delivered the consumer benefits they have been promising for years.

Nonetheless, the growth of biotechnology has spawned a number of public policy

questions. What are the environmental and food safety impacts of GE crops and animals?

What challenges and opportunities are exporters of GE crops finding in an increasingly

global marketplace? Is the current U.S. regulatory framework, which is based primarily upon

statutory authorities enacted before the rise of agricultural biotechnology, still adequate?

Current Applications

In 2003, the most recent year for which figures are available, GE crops were planted on

an estimated 167 million acres worldwide. The total number of countries growing such crops

had reached 18 by 2003, but most of the acreage was highly concentrated among four crops

(soybeans, corn, cotton, and canola) and five countries. The United States had 63% of global

acreage, Argentina 21%, and Canada (6%), Brazil (4%), and China (4%) most of the rest.2

In the United States, over 60 GE versions of 13 different plants were approved by

APHIS for commercial use through late 2004, although most of the crops are not widely

1

Unless noted, sources for this issue brief include various materials by USDA’s Economic Research

Service and Animal and Plant Health Inspection Service, the Pew Initiative on Food and Biotechnology, the Food Chemical News trade report, and the Biotechnology Industry Organization (BIO).

2

International Service for the Acquisition of Agri-biotech Applications (ISAAA), Global Status of

Commercialized Transgenic Crops: 2003. For information on developments in Brazil, where GM

crops were planted illegally prior to 2003, see CRS Report RS21558, Genetically Engineered

Soybeans: Acceptance and Intellectual Property Rights Issues in South America.

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planted.3 Three crops dominate: soybeans, cotton, and corn. Eighty-six percent of all U.S.

soybean, 76% of all upland cotton, and 46% of all corn acres were planted with GE seed

varieties in 2004, according to USDA’s National Agricultural Statistics Service (NASS; see

Table 1). Almost all commercial applications benefit the production side of agriculture:

weed and insect control are by far the most widespread uses of GE crops here and abroad.

Herbicide-tolerant (HT) crops are engineered to tolerate herbicides that would

otherwise kill them along with the targeted weeds. These include so-called “Roundup

Ready” or HT soybeans, HT upland cotton, and to a lesser extent, HT corn.

Insect-resistant crops effectively have the pesticide inserted into the plants themselves

to control insect pests for the life of the crop. Crops relying on Bt (Bacillus thuringiensis,

a soil bacterium) predominate. These insect-resistant varieties are most prevalent in upland

cotton to control tobacco budworm, bollworm, and pink bollworm; and corn to control

earworm and several types of corn borers.

Table 1. U.S. Acreage in Major GE Crops, 1996 and 2004

(prospective, acres in millions)

Soybeans

Upland Cotton (UC)

Corn

Acres

% of all soy

acres

Acres

% of all UC

acres

Acres

% of all

corn acres

1996

4.2m

7%

2.2m

17%

2.9m

4%

2004

64.9m

86%

10.8m

76%

36.3m

46%

Source: USDA-NASS, Prospective Plantings, various issues.

Other crops approved for commercialization include varieties of flax, papaya, potatoes,

radicchio, rapeseed, rice, squash, sugar beets, tobacco, and tomatoes. However, these are

either not on the market or not widely planted. In addition, several non-crop products are

available, notably in dairy production. Chymosin, a biotechnology-produced enzyme, is used

widely in cheese production. Bovine somatotropin (BST; also known as bovine growth

hormone) is a naturally occurring protein that can be produced in greater quantities through

genetic engineering. The GE version of BST was first approved by the U.S. Food and Drug

Administration (FDA) in 1993. More than 30% of all U.S. dairy cows are administered BST

to boost milk production (by an estimated 10%-15%).

U.S. Food Products Containing GE Crops4

Even though only 13 different GE plants have been approved for commercial use in the

United States, at least 60% of all U.S. foods likely contain some GE material. That is largely

because two such plants (corn and soybeans, where farmers have widely adopted GE

varieties) are used in many different processed foods. U.S. biotechnology rules do not require

3

Source: Information Systems for Biotechnology at Virginia Tech. Its website links to both U.S.

and international databases for field tests and approved GMOs; see [http://www.isb.vt.edu/].

4

Sources include Cornell University, Genetically Engineered Organisms Public Issues Education

Project (GEO-PIE), website at [http://www.geo-pie.cornell.edu/]; and Colorado State University’s

Transgenic Crops: An Introduction and Resource Guide, at [http://www.colostate.edu/programs/

lifesciences/TransgenicCrops/index.html].

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segregation and labeling of GE crops and foods, so long as they are substantially equivalent

to those produced by more conventional methods (see “Regulation and Oversight,” below).

Soy-based ingredients include oil, flour, lecithin and protein extracts; corn-based

ingredients include corn meal and corn syrups, used in many processed products. Canola oil

(mostly imported from Canada, where GE-canola is grown) and cottonseed oil are used in

cooking oils, salad dressings, snack foods, and other supermarket items. No GE-produced

animals are yet approved for human consumption, although cheeses may contain chymosin,

and dairy products may have been produced from milk containing GE-BST.

Because most other government-approved GE crops are not being grown commercially,

few other GE-derived foods are reaching consumers. Possible exceptions are some zucchini

and yellow squash varieties, which few farmers are growing, and Hawaiian papayas, although

most U.S. papayas are non-GE imports from Brazil, Mexico, and the Caribbean. Calgene’s

FlavrSavr tomato, first marketed to consumers from 1995 to 1997, was withdrawn after

Calgene determined that the varieties being grown were not of consistently high quality. GE

potato varieties may have peaked several years ago at 2%-3% of the market, but were

discontinued by the seed developer in 2001 mainly after several fast food and snack food

companies declined to buy them. GE sugar beets, rice, flax, and radicchio have received

government approval but have not been commercially marketed, presumably due largely to

perceived producer or consumer unease with them.

Analysts say some farmers are wary of planting GE crop varieties because their

customers may be worried about their safety. Biotechnology supporters contend that such

concerns are unfounded because scientific evidence has found that GE crop varieties are safe,

and that foreign governments are simply using such concerns to maintain barriers to imports.

Future GE Applications5

“Input” Traits. For farmers, insect-resistant and herbicide-tolerant GE varieties are

under development for other crops, including wheat (see below), alfalfa, peanuts, sunflowers,

forestry products, sugarcane, apples, bananas, lettuce, strawberries, and eventually other

fruits and vegetables. Other traits being developed through genetic engineering include

drought and frost tolerance, enhanced photosynthesis, and more efficient use of nitrogen.

Tomatoes that can be grown in salty soils, and recreational turf grasses that are herbicide

tolerant, pest resistant, and/or more heat and drought tolerant also are under development.

“Output” Traits. For processors and consumers, a range of GE products may be on

the horizon, such as oilseeds low in saturated fats; tomatoes with anti-cancer agents; grains

with optimal levels of amino acids; rice with elevated iron levels; and rice with betacarotene, a precursor of Vitamin A (“golden” rice). Other future products could include

“low-calorie” sugar beets; strawberries and corn with higher sugar to improve flavor; colored

cotton; improved cotton fiber; delayed-ripening melons, strawberries, raspberries, and other

produce (such tomatoes already are approved); and naturally decaffeinated coffee. Critics

point out that biotechnology advocates have been forecasting the adoption of various

“output” traits for some time, but few are actually reaching the marketplace.

5

Sources: ERS, Economic Issues in Agricultural Biotechnology (AIB-762), February 2001 (table,

p. 19), at [http://www.ers.usda.gov/publications/aib762/]; BIO; and Colorado State University.

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Plants being developed but not yet commercialized could become “factories” for

pharmaceutical compounds, to be extracted and purified for human and animal health uses

(among concerns are whether they could “contaminate” food crops; see “Plant-Based

Pharmaceuticals from Biotechnology” later in this report). Future transgenic livestock also

might yield pharmaceuticals and/or human organ and tissue replacements. Other transgenic

livestock traits might include more rapid growth, less fat, disease resistance, and longer

useful lives. Awaiting government approval for food use are GE salmon that require as little

as half the usual time to grow to market size; other such fish could follow later.6

Regulation and Oversight

Coordinated Framework for Regulation of Biotechnology

The basic federal guidance for regulating biotechnology products is the Coordinated

Framework for Regulation of Biotechnology (51 Fed. Reg. 23302), published in 1986 by the

White House Office of Science and Technology Policy (OSTP). A key principle is that

genetically engineered products should continue to be regulated according to their

characteristics and unique features, not their production method — that is, whether or not

they were created through biotechnology. The framework provides a regulatory approach

intended to ensure the safety of biotechnology research and products, using existing statutory

authority and previous agency experience with traditional breeding techniques. The three

lead agencies are USDA’s Animal and Plant Health Inspection Service (APHIS), the Food

and Drug Administration (FDA), and the Environmental Protection Agency (EPA).

USDA’s Animal and Plant Health Inspection Service (APHIS). APHIS

regulates the importation, interstate movement, and field testing of GE plants and organisms

that are or might be plant pests under the Plant Protection Act (PPA; 7 U.S.C. §7701 et seq.).

APHIS regulates animal biologics (i.e., viruses, serums, toxins for animal vaccines) under

the Virus, Serum, and Toxins Act (21 U.S.C. 151 et seq.). Specifically, GE plants that are

or might be plant pests are considered “regulated articles” under APHIS regulations (7 CFR

340-340.9). APHIS authorization must be obtained prior to import, interstate movement, or

environmental release, including field testing.

More specifically, a “regulated” plant cannot be introduced into the environment —

even field tested — unless its developer obtains APHIS authorization through either the (1)

permit process or (2) notification process. Permits impose restrictions on movement and

planting to prevent escape of plant material that may post a pest risk. Sponsors follow

APHIS guidance on testing and movements to ensure that the plant will not damage

agriculture, human health, or the environment. Plant-based pharmaceuticals virtually always

must be developed under the permit process. However, most other GE crops have been

developed under the notification option, an expedited procedure that is less rigorous than

permitting. Notification can be used in lieu of permitting when the plant species is not

considered a noxious weed (or weed in the release area) and other APHIS standards are met.

6

So far only one GE fish, the “Glofish,” has been marketed in the United States. It is an aquarium

fish that is not approved for consumption. For more on genetically engineered fish, see CRS Report

RS21996, Genetically Engineered Fish and Seafood.

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Regardless of the process chosen, after testing is completed, a developer next seeks

“non-regulated status” from APHIS, the typical route to full commercialization and no

further formal oversight. The developer must provide APHIS with extensive information on

plant biology and genetics, and potential environmental and plant pest impacts that may

result from the modification. APHIS conducts a formal environmental assessment (EA) and

has public comment periods before deciding whether to approve the developer’s request for

“non-regulated status.”

Food and Drug Administration (FDA). FDA regulates food, animal feed additives,

and human and animal drugs, including those from biotechnology, primarily to ensure that

they pose no human health risks, mainly under the Federal Food, Drug and Cosmetic Act

(FFDCA; 21 U.S.C. §301 et seq.) and the Public Health Service Act (42 U.S.C. §201 et seq.).

Under the FFDCA, all food and feed manufacturers must ensure that the domestic and

imported products they market are safe and properly labeled. All domestic and imported

foods and feeds, whether or not they are derived from GE crops, must meet the same

standards. Any food additive, including any introduced through biotechnology, cannot be

marketed before it receives FDA approval. However, additives that have been determined

to be “generally recognized as safe” (GRAS) do not need such preapproval.

To help sponsors of foods and feeds derived from GE crops comply, FDA encourages

them to participate in its voluntary consultation process. All GE-derived products now on the

U.S. market have undergone this process. With one exception, none of these foods and feeds

were considered to contain a food additive, so they did not require approval prior to

marketing. However, a May 1992 FDA policy statement still in force notes that GE foods

must undergo a special review under certain conditions, such as if the gene transfer produces

unexpected genetic effects, changes nutrients or toxicant levels from the food’s traditional

variety, might contain an allergen from another crop, or would be used to host an industrial

or pharmaceutical substance, for example.7 In November 2004, FDA published draft

guidance under which developers can choose to provide FDA with any information about

new proteins they are using in the early stages of crop development. FDA can then perform

an “early food safety evaluation” to deem whether the proteins would be safe for human

consumption if low levels of it crossed into the food supply. FDA believes that any potential

risk from the low-level presence of such material in the food supply would be limited to the

possibility of it containing or consisting of a new protein that might be an allergen or toxin.8

FDA is accepting comments on the draft guidance through January 24, 2005.

Environmental Protection Agency (EPA). EPA must approve the use of all

pesticides, including those genetically engineered into plants, which it terms “plantincorporated protectants” (PIPs). EPA essentially determines a PIP’s environmental safety

through its authority under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA;

7 U.S.C. §136 et seq.). Also, under the FFDCA, the EPA establishes tolerances (i.e., safe

7

See the FDA biotechnology website at [http://www.cfsan.fda.gov/~lrd/biocon.html#policy]; and

CRS Report RL30198, Food Biotechnology in the United States: Science, Regulation, and Issues.

8

Allison A. Freeman, “FDA Proposes Safety Approval Program for Field Trials,” Greenwire,

November 24, 2004; FDA, “FDA Proposes Draft Guidance for Industry for New Plant Varieties

Intended for Food Use,” FDA Talk Paper, November 19, 2004, accessed at [http://www.fda.gov/bbs/

topics/ANSWERS/2004/ANS01327.html] on December 8, 2004.

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levels) for pesticides in foods. Pre-commercial regulation is through a system of

notifications for small-scale field tests or Experimental Use Permits for larger field tests. As

for any pesticide, EPA requires the manufacturer of a PIP to obtain a registration through a

regulatory process intended to ensure its safe use environmentally.

In practice, all three agencies have more detailed procedures than those described above

for monitoring and approving the development and commercialization of GE crops and

foods, particularly if they are for new uses (e.g., pharmaceuticals). However, the fundamental

policy assumption since 1986 has been that the biotechnology process poses no unique or

special risks; therefore it demands no new laws beyond those that already govern the health,

safety, efficacy, and environmental impacts of more traditional production methods.

Assessments of Current Policy

The biotechnology industry, leading U.S. agricultural groups, and many scientific

authorities continue to subscribe to this longstanding U.S. policy approach. They cite various

studies in asserting that there is no evidence that current GE crops have harmed the

environment or human health. These studies include the Institute of Medicine/National

Research Council 2004 report Safety of Genetically Engineered Foods: Approaches to

Assessing Unintended Health Effects; the National Academy of Sciences / National Research

Council (NAS/NRC) 2002 report Environmental Effects of Transgenic Plants: The Scope

and Adequacy of Regulation; the NAS/NRC 2000 report Genetically Modified PestProtected Plants: Science and Regulation; the Council for Agricultural Science and

Technology (CAST) 2001 report Evaluation of the U.S. Regulatory Process for Crops

Developed Through Biotechnology; and the CAST 2002 report Comparative Environmental

Impacts of Biotechnology-derived and Traditional Soybean, Corn, and Cotton Crops.

These reports generally conclude that current GE crops likely pose no greater risks than

conventional varieties, and that the current U.S. regulatory framework is adequate. However,

the reports have suggested a number of administrative or regulatory changes that might be

adopted to improve oversight. Critics have gone further, raising questions about whether the

current laws themselves remain adequate to protect human health and the environment,

particularly as emerging GE applications — such as plant-based pharmaceuticals and

industrial compounds, and transgenic animals, including insects — increasingly challenge

the agencies’ regulatory capabilities. They see gaps in the existing pre-market approval

processes, and in post-market oversight of GE crops, that they contend may expose humans

and the environment to unwarranted risks. These critics believe that only new legislation can

clarify agency roles and strengthen their regulatory authority, particularly over future novel

GE applications. Most recently, these critics have cited a September 2004 EPA study

showing that seed from genetically modified bentgrass pollinated its wild relatives up to 13

miles away, much further than previous studies would have indicated.9 (For additional

discussion, see “Food Safety and Labeling” and “Environmental Concerns,” below.)

A number of agricultural organizations, while not necessarily clamoring for new laws,

have expressed wariness about some new biotechnology products now awaiting approval.

9

Proceedings of the National Academy of Sciences, “Evidence for landscape-level, pollen-mediaded

gene flow from genetically modified creeping bentgrass with CP4 EPSPS as a marker,” Watrud et

al., accessed on September 29, 2004, at [http://www.pnas.org/cgi/doi/10.1073/pnas.0405154101].

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Among other concerns, they worry about consumer acceptance, potential difficulties

exporting these varieties to countries demanding the segregation and labeling of GMOs (or

their outright prohibition), and the potential for inadvertently mixing GE with non-GE crops.

One related question is the definition of “mixing” and the question of whether there should

be a threshold de minimis amount of GE material permissible in non-GE material. A second

related question is how to assess liability if such mixing does occur, or if GE plants prove

harmful to the environment. For example, to what extent if any should biotechnology

companies share liability with producers and others who use their products?

All sides of the debate appear to agree that whatever policy course is pursued in the

future, it should provide for a clear, predictable, trusted regulatory process.10 Utilizing its

current legislative authorities, APHIS has taken a number of actions over the past several

years intended to improve regulatory oversight. These have included consolidation of its

activities under a new Biotechnology Regulatory Services (BRS) office; development of a

compliance and enforcement unit to ensure GE developers’ adherence to the rules, and, in

2003, the publication of more stringent permit conditions for GE-derived plants for

pharmaceuticals and industrials (see “Plant-Based Pharmaceuticals from Biotechnology,”

below). Congress also increased USDA’s oversight budget for FY2005 to $9.5 million (from

$5.4 million in FY2004).

More recently, APHIS announced that it is considering whether to overhaul its existing

biotechnology regulations. In the January 23, 2004, Federal Register, the agency published

a notice of its intent to prepare an environmental impact statement (EIS) evaluating these

regulations, and requesting public comments (accepted through April 13, 2004) on a number

of possible changes. These include whether to broaden APHIS’s regulatory scope to cover

GE plants that may pose a noxious weed risk or may be used as biological control agents;

whether to establish new categories for field testing that delineate requirements based upon

relative levels of potential risk; and whether to change (e.g., strengthen) its environmental

reviews and permit conditions for GE plants for pharmaceuticals and industrials, and

differentiate between food and non-food crops for these products. APHIS also solicited

comments on ways that it might ease its requirements for lower-risk products. The agency

has received over 3,000 comments on its proposal.11 Although APHIS has stated its intention

to finish the EIS by the end of December 2004, it is unclear whether that goal will be met.

Global Trade Concerns

The U.S. approach to agricultural biotechnology regulation contrasts with that of many

major trading partners. For example, the European Union (EU), Japan, South Korea, New

Zealand, and Australia either have or are establishing separate mandatory labeling

requirements for products containing genetically modified ingredients; in many of these

countries, consumer and official attitudes toward GE foods are more skeptical. Differing

regulatory approaches have arisen at least partly because widely accepted international

10

The various arguments are explored at length in an April 2004 Pew Initiative report, Issues in the

Regulation of Genetically Engineered Plants and Animals. See [http://pewagbiotech.org/].

11

Personal communication with APHIS Legislative and Public Affairs Office, August 2, 2004.

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standards are still evolving. Meanwhile, some U.S. exports have been disrupted and trade

tensions have grown, as discussed below.12

Biotech Wheat

Such concerns have been crystalized by the voluntary withdrawal of a GE herbicidetolerant wheat from public markets. Monsanto had asked the U.S. and Canadian

governments for their approval, and other GE wheat varieties had been under development.

Some producers wanted to plant the wheat as soon as it became available; others feared

rejection by foreign customers of not only GE wheat, but all U.S. and Canadian wheat, out

of concern that even non-GE shipments might unintentionally contain some GE grain. The

latter group wanted developers and regulators to wait for more market acceptance before

releasing GE wheat varieties.

This resistance likely contributed to a decision by St. Louis-based Monsanto to

discontinue its efforts to win regulatory approval of a genetically modified wheat variety.

Monsanto announced its decision on May 10, 2004, noting that after a portfolio review and

“dialogue with wheat industry leaders, we recognize the business opportunities with

Roundup Ready spring wheat are less attractive relative to Monsanto’s other commercial

priorities.” Although Monsanto withdrew its applications for regulatory approval from EPA

and APHIS, it did not withdraw its FDA application. FDA subsequently approved the

application in July 2004. However, FDA approval alone is not sufficient to bring the GM

wheat to market.

In early 2003, a group of U.S. wheat producers had petitioned the Administration to

conduct a more thorough assessment of the environmental impacts of the Monsanto request;

27 farm, religious, and consumer advocacy organizations endorsed the petition in early 2004.

Underlining these concerns, Japanese consumer groups in March 2004 reportedly told U.S.

officials in wheat-dependent North Dakota that their country would not import any U.S.

wheat products if the Monsanto application was approved.13

U.S.-EU Dispute

Another controversial trade case is the U.S. complaint against the EU’s former de facto

moratorium on approvals of new GE crops. In May 2003, the United States, Canada, and

12

See also CRS Report RL31970, U.S. Agricultural Biotechnology in Global Markets: An

Introduction. This issue brief does not discuss the trade challenges encountered by the

biotechnology companies themselves. Among other problems, besides foreign resistance to

agricultural biotechnology in general, these companies also face often divergent laws on

international property rights (IPR), where their patent or plant breeding rights in one country may

be nonexistent in another. In the developing world in particular, the policy challenge is to find a

balance between companies’ IPR and the ability to use the new technologies. For details, see

International Food Policy Research Institute, Biotechnology and Genetic Resource Policies, Briefs

1-6, January 2003; CRS Report RL31568, Plants, Patents, and Seed Innovation in the Agricultural

Industry; and CRS Report RL31132, Multinational Patent Acquisition and Enforcement: Public

Policy Challenges and Opportunities for Innovative Firms.

13

Sources include Food Chemical News, various issues; Cornell University GEO-PIE; and several

news wire service reports.

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Argentina initiated a case before the World Trade Organization (WTO). U.S. agricultural

interests contend that the moratorium not only has blocked exports such as corn and other

products to the EU, but also has fueled unwarranted concerns about the safety of agricultural

biotechnology throughout the world. The United States and its allies argue that the EU

moratorium violates WTO rules stating that a country’s actions to protect health and the

environment must be scientifically based, and approval procedures must be operated without

undue delay. The WTO named a panel on March 4, 2004, to consider the case; their decision

is expected in March 2005.14

EU officials have told the United States that their cautious approach to regulating

agricultural biotechnology is necessary to restore confidence among European consumers,

who have become much more wary of changes in how their food is produced, particularly

after a series of major food safety crises that were not related to GE crops. At the same time,

EU officials assert that they have shown good faith in moving as quickly as possible to restart

the approval process. On January 28, the European Commission, the EU executive body,

took steps it said soon would lead to the approval of the first new GM products. Later, in

May 2004, the Commission approved a GE variety of canned sweet corn for import. In July,

the EU also approved the importation of a second GE corn variety for animal feed, and

approved imports of the same variety for use in food in October 2004. However, the EU

deadlocked on whether to allow imports of a different variety of corn in November 2004, and

some of its member countries have passed bans on certain EU-approved GM products. At

least one EU country, Germany, has addressed the issue of potential liability from GM crops

— passing a law in November 2004 that holds farmers who plant GM crops liable for

damages to nearby non-GM fields (even if the GM farmers adhered to planting instructions

and regulations). Some U.S. interests countered that the moratorium will not effectively end

until the EU clears several more of some 30 GE food and agricultural products still awaiting

regulatory approval — and EU member states actually implement the approvals.

Also, the current WTO case does not involve the EU’s new regulations, also now taking

effect, to require most food, feed, and processed products from GMOs to be labeled, even

if they no longer contain detectable traces of GM material (meat and livestock products

generally are exempt). GE-based products also must be segregated from non-GE products,

with documentation. U.S. agricultural interests argue that, even if and when the moratorium

is lifted, the new labeling and traceability rules are themselves unworkable and unnecessary,

and can mislead consumers by wrongly implying that GM-derived products are inherently

different than non-GM foods or pose safety concerns.15

The Biosafety Protocol

The Cartagena Biosafety Protocol, an outgrowth of the 1992 Convention on Biological

Diversity (CBD), was adopted in January 2000 and took effect in 2003. The United States

is not a party to the 1992 CBD, and therefore cannot be a party to the protocol. However,

because its shipments to ratifying countries will be affected, it has actively participated in the

negotiations over the protocol text and in countries’ preparations for implementation.

14

Ag Biotech Reporter, “WTO Meeting Summary,” Volume 21, Issue 9, September 30, 2004.

15

See CRS Report RS21556, Agricultural Biotechnology: The U.S.-EU Dispute.

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The protocol, which nearly 90 countries have ratified, permits a country to require

formal prior notifications from countries exporting biotech seeds and living modified

organisms (LMOs) intended for introduction into the environment. The protocol requires

that shipments of products that may contain LMOs, such as bulk grains, be appropriately

labeled and documented, and provides for an international clearinghouse for the exchange

of LMO information, among other provisions. The United States objects to implementing

measures, approved during an international conference in Kuala Lumpur in February 2004,

that would mandate what it says are overly detailed documentation requirements and that

would potentially expose exporters to unwarranted liability damages if imported GMOs harm

the environment or human health. These and other rules could disrupt U.S. exports, U.S.

government and industry officials believe.16

GMOs in the Developing World

In 2002, the United Nations (UN) World Food Program (WFP) announced an appeal

for food aid to meet the needs of some 14 million food-short people in six southern African

countries, Lesotho, Malawi, Mozambique, Swaziland, Zambia, and Zimbabwe. However,

a debate over the presence of genetically modified corn in U.S. food aid shipments made the

provision of food aid more difficult and costly. Some of the countries expressed reluctance

to accept unmilled GE corn on account of perceived environmental and commercial risks

associated with potential introduction of GE seeds into southern African agriculture. Zambia

refused all shipments of food aid with GE corn out of health concerns as well. In late March

2004, Angola said it too would ban imports of GE food aid, including thousands of tons of

U.S. corn, despite a need to feed approximately 2 million food-short people there.

The United States has blamed EU policies for southern African countries’ views on

food aid containing GE products. President Bush, for example, has stated that EU

governments, because of their policies on GE products, are hindering the cause of ending

hunger in Africa. The United States maintains that genetically modified crops are safe to eat

and that there is little likelihood of GE corn entering the food supply of African countries for

several reasons, including the fact that bioengineered varieties of corn are not well adapted

to African growing conditions.

Also, there is debate over the potential contribution of biotechnology to food security

and agricultural development in developing countries. Critics of biotechnology argue that

the benefits of biotechnology in developing countries have not been established and that the

technology poses unacceptable risks or problems for developing countries’ agriculture.

Critics suggest that intellectual property rights (IPR) protection impedes development and

dissemination of GE crops in developing countries and also gives multinational companies

control over developing country farmers. Proponents, however, say that the development of

GE technology appears to hold great promise, with the potential to complement other, more

traditional research methods, as the new driving force for sustained agricultural productivity

in the 21st century. They maintain that IPR difficulties have been exaggerated.

16

Sources include CRS Report RL30954, Biosafety Protocol for Genetically Modified Organisms:

Overview; and various USDA and U.S. State Department background materials on the protocol.

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The UN’s Food and Agriculture Organization (FAO) recently gave a qualified

endorsement of agricultural biotechnology in The State of Food and Agriculture 2003-2004.

FAO said that biotechnology including genetic engineering “can benefit the poor when

appropriate innovations are developed and when poor farmers in poor countries have access

to them on profitable terms. Thus far, these conditions are only being met in a handful of

developing countries.” Biotechnology research and development should complement other

agricultural improvements that give priority to the problems of the poor, and the public sector

should direct more resources to such improvements, FAO said, adding: “Regulatory

procedures should be strengthened and rationalized to ensure that the environment and public

health are protected and that the process is transparent, predictable and science-based.”

Other Selected Issues

Food Safety and Labeling

Many consumers may be wary of GE foods out of fear that introduced genes could

prove allergenic, introduce increased toxicity, or otherwise be harmful to human health.

Some critics express concern that FDA is placing all the responsibility on manufacturers to

generate safety data, as it does normally under its pre-market approval system, and is

reviewing only the conclusions of industry-sponsored studies, rather than conducting its own

tests. They also believe that the process lacks transparency and adequate public scrutiny of

data. Others defend the current system. They counter that additional testing and oversight

are unnecessary because all foods must meet the same rigorous federal safety standards

regardless of whether or not they are genetically engineered.

In July 2004, the Institute of Medicine and the National Research Council (IOM/NRC)

of the National Academies of Science released a report generally supporting the proponents’

view. The IOM/NRC found that food safety should be assessed based on the composition

of the altered food (e.g. whether it contains new compounds, unusually high levels of

nutrients, or other significant traits) rather than how the food was produced (by genetic

engineering or conventional methods). However, the IOM/NRC determined that the safety

of modified foods should be assessed on a case-by-case basis and cautioned that scientists’

current ability to predict adverse consequences of genetic changes is limited.17

U.S. policy also does not require GE-derived foods to be so labeled as long as they are

substantially the same as their more conventional counterparts. Nonetheless, some consumer

groups continue to seek mandatory labeling of all GE foods. These groups argue that U.S.

consumers, like their EU counterparts, should have an opportunity to see all relevant

information on a label so that they can make food choices based on their own views about

its perceived quality or safety. The food industry generally opposes compulsory biotech

labeling. One of its concerns is that consumers might interpret GE labels as “warning labels”

implying that the foods are less safe or nutritious than conventional foods, even though the

preponderance of science indicates otherwise. The industry also has pointed out that

17

Press release, “Composition of Altered Food Products, Not Method Used to Create Them, Should

Be Basis for Federal Safety Assessment,” The National Academies, July 27, 2004. Accessed at

[http://www4.nationalacademies.org/news.nsf/isbn/0309092094?OpenDocument] on August 2,

2004.

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mandatory labeling would require development of a costly and possibly unattainable system

to ensure that GE and non-GE foods remain segregated from the farm to the store, with no

added benefit to the consumer. The industry has asserted that if consumers want to purchase

GE-free products, the market will support a voluntary system, as exists for organic foods

(where rules already prohibit GE foods to carry the “organic” label).

In the House Appropriations Committee report on H.R. 4766, the FY2005 agriculture

appropriations bill, the committee called on the FDA to finalize guidance for manufacturers

who wish to label their products as containing (or not containing) ingredients developed

through biotechnology.18 The Senate report for S. 2803 did not comment on this issue.

A closely related issue is the so-called adventitious presence (AP) of GE material in

non-GE crops. In general terms, AP refers to any incidental appearance of very small

amounts of foreign material in a commodity, which can occur at any time during production,

harvesting, storage, or marketing. In the grain business, even shipments of the highest grades

are permitted to contain some specified low levels of unwanted material, such as weeds,

damaged kernels, and/or stems and leaves. Corn graded No. 1, for example, may contain up

to 2% foreign material. As more crops and acreage are devoted to GE varieties, it becomes

increasingly difficult, if not impossible, to avoid their trace presence in non-GE varieties.

Moreover, no internationally recognized standards exist for what amounts, if any, of AP

GE material should be permitted in a non-GE crop, especially if that crop or a food derived

from it will be labeled as non-GE. In the absence of such standards, individual countries are

establishing their own, often varying, thresholds. The lack of consistent, scientifically sound

standards is confusing consumers and disrupting trade, the biotech industry has asserted. For

example, the new EU regulation sets a tolerance level for non-GM foods, feeds, and

processed products at 0.9%. All products with more than 0.9% must be labeled as GM. U.S.

agricultural interests consider the EU regulation in particular to be unworkable and

discriminatory. EU officials counter that their standards not only are reasonable but also are

being demanded by consumers. (See also “U.S.-EU Dispute,” above.)

In its January 23 notice, APHIS asked for comments on if, and how, its regulations

should address the AP question for GE plant material. Questions include whether such

presence should be exempt from regulation, what thresholds (levels) of AP might be

acceptable, and under what conditions. Major grain and biotechnology industry

organizations responded by urging the FDA, EPA and APHIS to establish a policy

governing AP.

Environmental Concerns

Supporters of biotechnology claim that GE crops offer environmental advantages over

conventionally produced organisms. They note that the technology is more precise than

traditional methods like crossbreeding. The latter methods transfer unwanted and

unanticipated characteristics along with the desired new traits from one organism to another.

Biotechnology also has made it possible to apply fewer and less toxic chemical herbicides

18

H.Rept. 108-584, July 7, 2004, p. 87.

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and insecticides and to reduce soil tillage (thereby decreasing erosion and improving soil

fertility), supporters of the technology assert.

Critics counter that genetic engineering is not like traditional breeding. It creates crop

and animal varieties that would not otherwise occur in nature, posing unpredictable risks to

the environment (and to human health), they point out. Because they are living organisms,

GE crops are difficult to control, greatly increasing the potential for escaping into the

environment, crossbreeding with and overtaking wild species, and generally disrupting the

natural ecosystem, critics believe. For example, GE, herbicide-tolerant seeds or pollen could

inadvertently create “superweeds” that out-compete cultivated or wild plants, critics argue.

A 2002 NAS/NRC report stated that it could find no new distinctions between the types

of environmental risks posed by GE plants and those posed by more conventionally bred

crops (and that, in fact, there is a need to re-evaluate the potential environmental effects of

the latter). The study concluded that the current APHIS regulatory system for biotechnology

has improved substantially since it was first initiated and is more rigorous than the

environmental oversight for other agricultural products and practices. The study did find

areas of concern, including the need for greater transparency and public input into the

regulatory process, and for more ecological monitoring after GE plants are approved and

enter the marketplace.

A more recent NAS/NRC report cited studies to conclude that some GE organisms are

viable in natural ecosystems and can breed with wild relatives. The report urged developers

of GE organisms to consider biological techniques such as induced sterility in order to

prevent transgenic plants and animals from escaping into the environment. “Because no

single bioconfinement method is likely to be 100% effective,” and because few are welldeveloped, such developers should create a redundant system by using more than one method

of containment. The report called for more research to improve both containment methods

and public confidence in regulation.19 In May 2004, a separate report by University of

Arizona and Texas A&M University researchers confirmed the spread of GE corn into a

nearby field of non-GE corn.20 In September 2004, a team of researchers from the

Environmental Protection Agency confirmed the spread of GE grass pollen to non-GE grass

up to 13 miles away.21

19

NAS/NRC, respectively, Environmental Effects of Transgenic Plants: The Scope and Adequacy

of Regulation, 2002; and Biological Confinement of Genetically Engineered Organisms, 2004.

Among numerous other studies that examine environmental impacts and the adequacy of regulation

are Council for Agricultural Science and Technology, Comparative Environmental Impacts of

Biotechnology-derived and Traditional Soybean, Corn, and Cotton Crops, June 2002; and Pew

Initiative on Food and Biotechnology, Post-Market Oversight of Biotech Foods — Is the System

Prepared? (prepared for Pew by Resources for the Future), April 2003.

20

“Contamination of refuges by Bacillus thuringiensis toxin genes from transgenic maize,” Charles

F. Chilcutt and Bruce E. Tabashnik, Proceedings of the National Academy of Sciences, May 18,

2004, 752-7529.

21

See footnote 9.

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Plant-Based Pharmaceuticals from Biotechnology

Worldwide, hundreds of GE plants are under development for use as “factories” for

pharmaceuticals (and other industrial compounds). GE pharmaceuticals might include, for

example, vaccines or medicines for forms of cancer, infectious diseases, cardiovascular and

nervous system diseases, metabolic disorders, and agents of biowarfare. Proponents believe

plant-based pharmaceuticals will provide a far more cost-effective alternative to conventional

pharmaceutical production, which now requires major investments both in large volumes of

purified culture mediums and in manufacturing plants. Plant-based pharmaceuticals, on the

other hand, could be easily incorporated into the existing agricultural infrastructure,

providing a significant new source of farm income, they believe.22

However, critics are concerned about impacts on the food supply if food crops like corn

(the most widely planted U.S. crop, an intensively researched plant for biotechnology, and

also an airborne pollinator) are “pharmed.” In 2002, for example, material from GE-altered

corn plants that had been test-planted in a prior growing season in Nebraska for

pharmaceutical use (for ProdiGene, Inc.) was inadvertently mixed with some 500,000

bushels of soybeans, which had to be quarantined by USDA to keep them out of the food

supply. USDA officials observed that the soybeans never reached the food or feed supply,

evidence that current regulatory oversight is effective.

Nonetheless, concerns persist among both consumer groups and the food manufacturing

industry about producing GE plant-made pharmaceuticals in food crops. Some want 100%

prevention systems in place before the first product is commercialized. Some of these groups

suggest that only non-food crops should be used for GE plant-made pharmaceuticals, or that,

at a minimum, pharmaceutical crops should be banned from agricultural areas where food

and feed crops are produced. Other potential issues include whether manufacturers of plantbased pharmaceuticals will be able to maintain consistency in dosages and overall quality,

and unanticipated environmental problems (e.g., threatening endangered species).23

Responding to such concerns, APHIS published in the March 10, 2003, Federal

Register a notice tightening permit conditions for its 2003 field tests of GE plants with

pharmaceutical and industrial traits. The changes included (1) doubling the minimum

distance allowed between traditional corn fields and test sites of pharmaceutical or industrial

corn; (2) for all pharmaceutical crops (corn and other), doubling fallow zones around test

sites; (3) restricting what can be grown on a test site and fallow zone in the next growing

season; (4) using dedicated machinery (e.g., harvesters, planters) and storage facilities only

for pharmaceutical production — adequate cleaning for other uses is no longer acceptable;

(5) submitting for APHIS approval equipment cleaning and seed cleaning and drying

procedures; (6) increasing APHIS field site inspections from one per season to five per

season plus two visits the following year to look for any volunteer plants; (7) more record-

22

Also see CRS Report RS21418, Regulation of Plant-Based Pharmaceuticals.

23

The 2004 NAS/NRC report observed that an organism widely used for food “probably would be

a poor choice as a precursor for an industrial compound” unless it were strictly confined. Alternative

nonfood host organisms should be sought, the report concluded.

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keeping and training requirements. APHIS issued a letter on January 14, 2004, aimed at

clarifying and updating its previous guidance on permits.24

In Congress

In the 107th Congress, lawmakers included both in the 2002 farm law (P.L. 107-171) and

in trade promotion legislation (P.L. 107-210) provisions aimed at supporting use of GE farm

products, including new programs to challenge foreign barriers to U.S. exports of such

products and to educate the public on GE-based foods. In the 108th Congress, the conference

report to accompany the Consolidated Appropriations Act for FY2004 (H.Rept. 108-401;

P.L. 108-199) notes that $3.3 million is provided to USDA for “cross-cutting trade

negotiations and biotechnology resources.” The measure also includes approximately $5

million for APHIS’s office of Biotechnology Regulatory Services (BRS). H.R. 4818, the

Consolidated Appropriations Act for FY2005, provides level funding for the trade

negotiations and provides $9.5 million for BRS. The increase funds additional inspections,

particularly of trials for plant-produced pharmaceutical and industrial compounds; upgraded

permitting and tracking systems; a new BRS Office of Science; and other improvements.25

After the Administration launched its formal challenge of the EU GM moratorium, the

Senate on May 23, 2003, passed by unanimous consent a resolution (S.Res. 154) in support

of the action. A similar House measure (H.Res. 252) was passed on June 10, 2003, by a

suspension vote of 339-80. In the 108th Congress, Representative Nick Smith introduced

bills (H.R. 2447, H.R. 3472, H.R. 4651) to create an interagency task force to promote the

benefits of agricultural biotechnology. Both bills were referred to the House Agriculture

Committee, but no subsequent action has been taken on them. Representative Kucinich

introduced a series of bills (H.R. 2916, H.R. 2917, H.R. 2918, H.R. 2919, H.R. 2920, H.R.

2921) that would have prescribed a variety of legislative changes intended to mandate

labeling of GE-based foods, broaden FDA oversight, protect producers from any potential

legal and environmental risks from agricultural biotechnology, prohibit unapproved U.S.

exports of GE plants and animals, and tighten rules for producing and handling GE

pharmaceutical and industrial crops, among other things. These bills have been referred to

various House committees, but no further action has been taken on them. Also Senator

Durbin introduced a bill, S. 2546, to require premarket consultation and approval for GE

foods at the FDA. The bill was referred to the Senate Agriculture Committee, but no further

action was taken on it.

A hearing on biotechnology was held on June 23, 2004, before a subcommittee of the

House Agriculture Committee. The hearing focused on the use of biotechnology in

agriculture and products currently under research. The Committee also held a hearing on

March 26 regarding trade barriers for agricultural biotechnology products. Issues for the

109th Congress may include continued interest in the export markets for U.S. GM foods,

particularly the EU, and U.S. regulatory mechanisms for approving biotech foods.

24

This guidance is available at [http://www.aphis.usda.gov/brs/pdf/011404.pdf].

25

USDA FY2005 Budget Justification, pp. 15-52 and 15-53.

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