For Immediate Release:
February 21, 2002.
Contact: Ben Lilliston, 612-870-3416
Charles Benbrook, 208-263-5236
Minneapolis
– A new report released today found that farmers are helping to finance a large
share of the biotech industry’s research, development, and legal costs through
the approximate 35 percent price premium they pay for genetically engineered Bt
corn, compared to conventional corn seed prices.
The
report found that corn seed expenditures grew at $1.34 per acre annually
between 1995-1999 as Bt corn was being introduced, compared to just $.30 per
year in the previous five years. The impact of the Bt corn premium on seed
industry profits has been remarkable, according to the report. The Bt corn
premium boosted earnings for Pioneer Hi-Bred by 7.3 percent, Monsanto by 9
percent, and Syngenta by over 18 percent between 1998-2000.
“The Bt Premium Price: What Does it Buy? The Impact of Extra
Bt Corn Seed Costs on Farmer Earnings and Corporate Finances” is by Dr. Charles
Benbrook of Benbrook Consulting Services. Dr. Benbrook previously served as the
Executive Director of the National Academy of Science’s Board of Agriculture.
The report is part of a series being published by the Institute for Agriculture
and Trade Policy and Genetically Engineered Food Alert on economic and legal
issues related to genetically engineered crops.
The
commercialization of corn genetically engineered to resist feeding damage by
the European Corn Borer (ECB) and Southwestern Corn Borer (SWCB) has taken off
in the last part of the 1990s. Introduced in 1996, this technology now accounts
for about 20 percent of the acres planted to corn each year in the U.S. Farmers
have spent about $659 million on Bt corn price premiums since 1996, an
investment that has only delivered some $567 million in benefits, as shown in
the November 2001 report – When Does It Pay To Plant Bt Corn?”
“Based
on current seed pesticide industry pricing policies and financial performance
goals, it is likely that the purchase of technologies like Bt corn will
transfer another slice of farm income from growers to the seed-biotechnology
industry,” says report author Dr. Benbrook.
Other key findings of the report include:
·
Every
acre planted to Bt corn has increased farmer seed expenditures an average of
$9.80 per acre, about a 35 percent jump.
·
Farmers’
net income per acre from corn production has declined sharply from a profit of
$40 per acre in 1975, to a loss of $26 per acre in 1985, and a loss of $35 per
acre in 1997.
·
The
biggest jump in seed and pesticide costs occurred between 1994 and 1996, when
Bt corn was introduced. These two production inputs now account for over $.40
in expenses for each bushel produced – between one-fifth and one-quarter of
gross income. Just over a decade earlier, these expenses accounted for less
than 10 percent of gross income.
“This
report clearly shows that farmers are heavily subsidizing the big increase in
research and development costs associated with the commercialization of GMO
corn varieties, triggering further erosion to farm income,” says Kristin
Dawkins, of the Institute for Agriculture and Trade Policy – a member of
Genetically Engineered Food Alert. “At a time when USDA estimates that corn
farmers are losing almost $1.00 on every bushel they produce, this transfer of
net income from farmers to biotech companies could not come at a worse time.”
The report is part of a
series being published by the Institute for Agriculture and Trade Policy and
Genetically Engineered Food Alert on economic and legal issues related to
genetically engineered crops. The first three reports of this series can be
downloaded at: www.gefoodalert.org
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