Preventing Liability for Genetically Engineered Crops

Thomas Parker Redick

This article addresses liability prevention for "genetically improved" crops defined to include those produced using the "gene-splicing" recombinant DNA process (rDNA process) and briefly reviews the Starlink™ recall and liability prevention measures in agricultural biotechnology.

Economic Impacts and Liability
With over 50% of soybeans and over 25% of the corn in the U.S. being planted in genetically improved varieties, agricultural biotechnology is here to stay, in the U.S., at least.

Genetically Improved "Feed, not Food" Corn: The Starlink™ Recall
The recall of the Starlink™ variety of corn (sold by Aventis Crop Science) illustrates the risk of selling new genetically improved varieties without adequate segregation to prevent recall liability. After the corn was commingled with food products, Aventis stepped forward to manage a massive recall. Growers allegedly were not adequately informed of the need to segregate the Starlink™ harvest from food supplies. Aventis tracked down eight million bushels of corn, with the EPA imposing a "zero tolerance" standard.

Aventis will pay from $100 million to over $1 billion under a recent settlement with 17 attorneys general, under a four-year agreement. Aventis will pay farmers up to 25 cents per bushel for corn commingled with Starlink™ corn after allegedly failing to inform all growers of segregation requirements, http://dailynews.yahoo.com.

The National Corn Growers Association urged grower members to (1) demand that corn seed companies verify all hybrids by testing for the Cry9C protein found in Starlink™ ("Verify before you buy"); and (2) rotate crops to avoid growing "volunteer" Starlink™ from last year's crop. See http://www.ncga.com.

Segregating Unapproved-in-EU Varieties
For the past three years, approximately $200 million in annual corn exports to the EU were lost, due to commingling of corn varieties not approved for export to the EU. Litigation recently filed in Illinois asserts that these diversions from the export market caused farmers economic losses. As a result, steps are being taken to protect corn, rice, and soybeans from export bans.

With the exception of Monsanto’s decision to market Roundup Ready corn, major seed companies are shelving new varieties of corn that lack approval in major overseas markets. Most seed companies heeded the pleas from major grain exporters (e.g., Archer Daniels Midland and A.E. Staley) and trade associations concerned with grain exports (e.g., the American Soybean Association (ASA), et al.). Monsanto plans to "channel" Roundup Ready corn using "stewardship" programs to maintain segregation. Some industry critics see seed company growers’ agreements as tools that shift the risk of segregation failures firmly onto farmers, by risk shifting clauses in growers’ license agreements (sometimes using a triple threat of indemnity, liability limitations, and disclaimers of liability).

The U.S. rice marketplace has stated a firm "not yet" to genetically improved rice varieties that lack "worldwide" regulatory approval. California just passed a law that empowers the California Rice Commission to begin requiring permits for new varieties. Aventis, the company with the first genetically improved rice variety (Liberty Link™) approved in the U.S., wisely chose not to oppose the California bill. Aventis also decided not to launch its Liberty Link™ rice variety anywhere in the United States, pending resolution of issues relating to overseas approval and segregation methodologies.

The soy marketplace provides an alternative model for export protection – the exhortation, negotiation, and threat of litigation model. Because soybeans are the largest grain export from the U.S., they have received the most careful strategic planning to prevent billion dollar liabilities from arising. At the urging of the ASA, Aventis made a commendable, cautious decision in 1998 to avoid marketing the Liberty Link™ soybean, ensuring that billions of dollars in soybean trade could flow into the EU. Dupont followed ASA’s lead on its high oleic program, satisfying EU demands for total segregation ("zero tolerance") – and with mad cow disease mandating alternative feed for cattle, the U.S. is ready to increase soy exports (including genetically improved varieties approved in the EU).

Preventing Environmental Liabilities
Genetically improved crops are not likely to create "superweeds" that plague agriculture for millennia to come, or cause adverse environmental impacts from pollen drift to rare plants ("genetic pollution"), as many activists have feared. A long-term study proved that rDNA soybeans, oilseed rape, potatoes, corn, and sugar beets survive no better than their conventional cousins, easing fears that "superweeds" would arise and render natural species extinct. See <http://library.northernlight.com>. In parallel research, the "Green Revolution" stands accused of drastically reducing wild and indigenous varieties of crops, the economic value of which could prove invaluable in the future. Pollen drift among related species could hybridize some rare plant species to extinction.

The economic value of DNA is probably greatly enhanced by our newfound ability to splice DNA using the rDNA process. Genetic resources might be deemed so unique and valuable to future genetic engineers that the damages assessed could be much higher than replacement value or cost. See, e.g., Marie Louise Larson, The Law of Environmental Damage (1999).

As a result, the current negotiations involving "GMO liability" in the EU and the Convention on Biological Diversity are sadly ironic. The rDNA process, which is a tool that could enhance the value of genetic resources – particularly for the developing countries harboring rich reservoirs of untapped species – would be subject to discriminatory liability standards that could dry up any innovation or trade to nations taking part in such a liability scheme.

In contrast to traditional plant breeding methodologies, rDNA changes are easily traced (regulators may require disclosure of the DNA sequences, or "primers" necessary to find the DNA for traceability purposes). Hence, rDNA crops may be the primary target for damage to related wild relatives. The future of liability prevention in agricultural biotechnology will depend largely upon development of standards for segregation, and tolerances for traces of rDNA content, so that both economic and environmental liability risks are more manageable.

Thomas P. Redick is co-chair of the ABA Section of Environment, Energy, and Resources’ Biotechnology Roundtable in cooperation with CAST, AALA, and ACPA.