November 2006

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Phill Jones

On August 18, Agriculture Secretary Mike Johanns announced that commercial long grain rice contained trace amounts of an unapproved, genetically engineered (GE) rice called LL601. The government became aware of the contamination after Bayer CropScience notified the US Department of Agriculture and the US Food and Drug Administration in July.

Federal agencies characterized the contamination as minor – equivalent to six rice grains out of 10,000 – and one that posed no health risk. Yet US rice growers, who export half of their rice, watched overseas customers quickly raise trade barriers. Bayer soon found itself a defendant in three class action lawsuits filed on behalf of rice growers in Arkansas, California, Louisiana, Mississippi, Missouri, and Texas.

Fallout from the LL601 contamination appeared before the end of August. During September, the LL601 controversy gained steam.

LL601 Makes Serial Appearances
Aventis CropScience, a company bought by Bayer in 2002, developed GE plants that synthesize the phosphinothricin-N-acetyltransferase (PAT) protein. The PAT protein confers tolerance to glufosinate-ammonium herbicide. LLRICE62 and LLRICE06, two lines of PAT-producing GE rice, have been deregulated in the US; they have been deemed safe for use in food and safe in the environment. These lines have not been commercialized.

Under USDA permits, farmers and researchers performed field trials of Aventis’ LL601 rice between 1998 and 2001. Development ceased in 2001. The LL601 story should have ended then.

In July 2006, Bayer notified the USDA and FDA about the reappearance of LL601. USDA officials reported in August that LL601 had been found in samples taken from storage bins in Arkansas and Missouri. By the time that Johanns made his August 18 announcement, the FDA had concluded that the presence of LL601 in the food and feed supply poses no safety concerns, while the USDA’s Animal and Plant Health Inspection Service had decided that the GE rice should not create a threat to the environment.

These assurances did not help US rice farmers. Officials in Japan and Norway immediately suspended imports of US long grain rice. The European Union, one of US rice growers’ biggest customers, quickly adopted a costly screening procedure. Now, an accredited laboratory would have to certify a US shipment of long grain rice as free of LL601 before it could enter the market. The EU Commission also required Member States to randomly test products already on the market.

Dr. Andrew Wadge, the United Kingdom’s Food Standards Agency Director of Food Safety, explained that "The presence of this GM material in rice on sale in the UK is illegal under European health law, even at extremely low levels. This is why we are taking steps to test American long grain rice and ensure future imports are GM free."

According to the UK Food Standards Agency, screening procedures would remain in place for at least six months. This measure would add to the cost of all long grain rice varieties at a time when the market price of US rice dropped about ten percent.

Trade relations between the European Union and the United States felt the strain. The US stressed that trace amounts of LL601 posed no health risk. EU officials complained that the US took more than two weeks to warn Europe of the contamination after Bayer informed federal authorities. Europe needed to set up protective measures to prevent an illegal incursion of unapproved GE rice. Tension escalated with the finding that LL601 had already entered the European Union, where no GE rice is allowed to be grown, sold, or marketed.

In mid-September, Greenpeace International reported trace amounts of LL601 in US parboiled long grain rice sold at Aldi Nord, one of Germany’s leading supermarket chains. The German Agriculture Ministry later confirmed the presence of LL601 rice. The European Federation of Rice Millers found that 33 of 162 rice samples tested positive for LL601. By the end of September, random checks performed by national authorities in food and retail supply chains uncovered the presence of LL601 in at least nine EU countries.

A sense of control over the LL601 spread must have suffered with the discovery that some contamination had avoided detection. In August, two barge loads had passed through a Rotterdam port after testing negative for LL601. Spot checks, later performed by Dutch officials, contradicted those results.

The false negative results spurred the European Commission to announce that it intends to take further action to strengthen the testing of US long grain rice imports for LL601. In early October, the Commission stated that it hoped to negotiate with US authorities a common testing protocol for US rice exports. These efforts failed. On October 24, Member State experts endorsed a draft Commission Decision to impose new mandatory testing. According to the draft Decision, in addition to the certification requirement, all consignments of US long grain rice must be sampled and tested at the point of entry to the European Union by Member State authorities.

A Sticky Rice Dilemma
US agencies had company in finding that LL601 rice does not pose a threat. The UK Food Standard Agency, the Canadian Food Inspection Agency, and Dutch authorities confirmed the food safety of the rice. The European Food Safety Authority announced that the consumption of long grain rice containing trace levels of LL601 "is not likely to pose an imminent safety concern to humans or animals." However, the agency accompanied this evaluation with a disclaimer that it had insufficient data to provide a full risk assessment.

If trace amounts of GE rice do not pose a food safety threat, its presence in the food supply does raise the question about LL601’s escape. In late September, Bayer announced that the company could not explain how LL601 came to be present in commercial rice supplies. The storage bins that contained the originally-discovered LL601 held rice from a 2005 crop originating from several states.

From 1999 to 2001, the Agricultural Center of the Louisiana State University conducted field research on LL601 in collaboration with Aventis. Analyses of the research station’s rice revealed LL601 contamination in a 2003 sample of Cheniere long grain rice. The affected Cheniere rice plot had been used to grow foundation stock distributed to seed-producing farmers. Cheniere foundation seed grown in 2005 appeared to be free of LL601. Thirteen other varieties, currently in the LSU AgCenter’s foundation seed program, also received a clean bill of health.

How did the Cheniere contamination occur? Some have suggested that LL601 plants fertilized Cheniere plants to create a modified form of Cheniere plant with the PAT gene. Since rice self-pollinates, the chance of crossbreeding seems unlikely, however. Steve Linscombe, LSU AgCenter rice breeder and regional director, said that research protocols with LL601 exceeded the USDA’s requirements for isolating the GE plant from conventional rice plants. Others speculate that grains of LL601 mixed accidentally with Cheniere grains, and that future plantings of this stock produced both plants. Can this explain the LL601 contamination of only 0.06% reported by the USDA?

The role of the Cheniere contamination, if any, in contributing to the trace amounts of LL601 reported by Bayer CropScience has yet to be determined. The cause of the LL601 contamination remains unknown. The only certainty is that LL601’s surprise reappearance has cast doubt over whether the agbiotech industry can control its engineered products.

Selected Sources

European Food Safety Authority (2006) EFSA’s GMO Panel provides reply to European Commission request on GM rice LLRICE601. (September 15, 2006). Available:

European Union (2006) GM rice: Standing Committee backs Commission Decision on strict counter testing of US rice imports. (October 24, 2006). Available:

Food Standards Agency (2006) Testing to be carried out for illegal GM rice. (September 1, 2006). Available:

LSU AgCenter (2006) Liberty Link 601 found in LSU AgCenter foundation seed rice. (August 31, 2006). Available:

USDA (2006) Statement by Agriculture Secretary Mike Johanns regarding genetically engineered rice. (August 18, 2006). Available:

Vogel, G (2006) Tracing the transatlantic spread of GM rice. Science, 1714 (September 22, 2006).

Weiss, R (2006) A slight taint of biotech rice puts farmers’ overseas sales in peril. The Washington Post, D01 (September 21, 2006).

Phill Jones


EPA is seeking public comments by November 28, 2006 on " ... a draft Pesticide Registration Notice (PRN) entitled 'Guidance on Small-Scale Field Testing and Low-level Intermittent Presence in Food of Plant-Incorporated Protectants (PIPs).'

PRNs are issued by the Office of Pesticide Programs (OPP) to inform pesticide registrants and other interested persons about important policies, procedures, and registration related decisions, and serve to provide guidance to pesticide registrants and OPP personnel. This particular draft PRN provides guidance to the registrant concerning clarification on the process by which EPA reviews and ensures the safety of low-level intermittently-present residues of plant-incorporated protectants (PIPs) in food or feed, and the conditions under which a tolerance or exemption from the requirement of a tolerance would be required for field tests for biotechnology-derived food and feed crop plants containing plant-incorporated protectants.

Publicly available documents are to be posted in EPA Docket Identification Number EPA-HQ-OPP-2006-0291 at

Patricia Moe
Biopesticides and Pollution Prevention Division
703 305 0744; fax: 703 308 7026;


EPA September 29 Federal Register:

Louise VT Shepherd & Howard V Davies

GE risk assessment in the European Union
Prior to market approval in Europe, genetically engineered (GE) crops and products undergo a rigorous risk safety assessment based on a comparative approach. That approach assesses differences between the GEO and its derived products and their non-GE counterparts, the counterparts having a history of safe use.1,2 The risk assessment focuses on a range of parameters, which are described in the European Food Safety Authority (EFSA) guidance document.2 Compositional analysis is one of these parameters and the OECD (Organization for Economic Co-operation and Development) is providing guidance on which compounds should be targeted for analysis on a crop by crop basis. The analysis takes into account the crop-specific profile of compounds with nutritional or anti-nutritional characteristics. Significant intentional or unintentional changes in such compounds are likely to drive the need for more detailed risk assessment.3,4 If a trait or traits are introduced with the intention of modifying composition significantly, and where the degree of equivalence cannot be considered substantial, then the safety assessment of characteristics other than those derived from the introduced trait(s) becomes of greater importance. Whilst the potential for using modern transcriptomic, proteomic, and metabolomic approaches to assess the potential for detecting unintended effects is under evaluation (e.g., the EU "SAFEFOODS" project []), the targeted analysis of key nutrients and anti-nutrients remains the cornerstone of the compositional evaluations.1

GE potato as a case study for compositional analysis
Potatoes are the world’s fourth most important food crop and have long been used as a model crop for studies on gene function using Agrobacterium-mediated transformations. The cultivated potato has complex genetics (it is tetraploid), and genetic engineering approaches that add value to existing varieties with a strong pedigree in other characteristics remain attractive scientifically. The Scottish Crop Research Institute ( has a history of producing a range of GE potatoes for experimental purposes; this has afforded opportunities to develop projects on the use of metabolomics to assess the potential for unintended effects.

We feel it is important, however, to use existing OECD guidelines to establish the baseline against which data on metabolomics can be compared. In its 2002 "Consensus Document on Compositional Considerations for New Varieties of Potatoes: Key Food and Feed Nutrients, Anti-nutrients and Toxicants," the OECD5 considers that if the analyses of specific compositional parameters listed in their document indicate that a novel variety falls within the ranges found in the literature (apart from intentional modifications resulting from transgenic approaches) then the variety can be considered equivalent with respect to its overall composition. In our experiment, metabolite analysis included soluble carbohydrates, glycoalkaloids, vitamin C, total nitrogen, and fatty acids. Trypsin inhibitor activity was also assayed. These are the major compounds recommended by the OECD in its 2002 consensus document.

Range of GE potatoes included
Using (primarily) the potato variety Desirée, the study included transgenic modifications to a range of metabolic and development processes, including primary carbohydrate metabolism, polyamine biosynthesis, and glycoprotein processing. The lines included some with extreme phenotypes, e.g., those with a modified glycoprotein processing protein (Fig. 1 [see ref. 6]), which produces stunted plants with poor tuber yield and modified leaf anatomy. Other lines overexpressed a gene that encodes S-adenosylmethionine decarboxylase (modified polyamine metabolism) and showed significant increases in tuber number (Fig. 2 [see ref. 7]), whilst yet another group of transgenics contained starch with amylose levels reduced by 90% (unpublished). All experiments included appropriate controls consisting of a) wild type non-GE tubers, b) non-GE tubers produced from plants regenerated through tissue culture (including a callus phase), and c) GE tubers derived from transformation with an ‘empty vector’, i.e., no specific target gene included (with the exception of the kanamycin resistance gene as a selectable marker).

What unintended effects were observed?
In general the targeted compositional analysis revealed no consistent differences between GE lines and respective controls. No construct specifically induced unintended effects. Statistically significant differences between wild type controls and specific GE lines did occur but appeared to be random and not associated with any specific genetic construct. Indeed such significant differences were also found between wild types and both non-GE, tissue culture derived, and GE tubers derived from transformation with the empty vector. More specifically, the study revealed a consistent and significant increase in vitamin C and a decrease in glycoalkaloids across many of the GE lines examined, but also in the "control" GE empty vector lines and in non-GE lines developed through tissue culture. Somaclonal variation may therefore underpin many of the compositional changes and may provide a mechanism by which "unintended" changes in plant composition might occur independently of the process of transformation and gene insertion itself. More extensive studies on the impact of tissue culture on compositional variation are ongoing at the SCRI.

Given the range of phenotypes used in this study, it is perhaps surprising that chemical composition is not affected more significantly. This indicates that visible, morphological phenotype is not necessarily a good guide to likely compositional changes. Similarly, compositional changes may not give rise to an agronomic phenotype. This is why a holistic and case-by-case analysis of specific GE lines is required to generate any opinion on potential risk.

In our study the values for specific potato components that we analyzed (and suggested by the OECD) fall well within published ranges for potato. It is therefore unlikely that any of the changes observed would raise issues with regard to food safety or nutritional value. However, several of these GE lines would not be considered substantially equivalent to the parent due to phenotypic perturbations.


1. OECD (1993) Safety evaluation of foods derived by modern biotechnology: concept and principles. (,2546,en_2649_34385_1946122_119666_1_1_1,00.html)

2. EFSA [European Food Safety Authority] (2004) Guidance document of the GMO Panel for the risk assessment of genetically modified plants and derived food and feed. (

3. Kuiper HA and Kleter GA (2003) The scientific basis for risk assessment and regulation of genetically modified foods. Trends Food Sci and Tech 14, 277-293

4. Howlett J et al. (2003) The safety assessment of novel foods and concepts to determine their safety in use. Int J Food Sci Nutr 54 (Supplement), S1-S32

5. OECD (2002) Consensus Document on Compositional Considerations for New Varieties of Potatoes: Key Food and Feed Nutrients, Anti-Nutrients and Toxicants.,2340,en_2649_34385_1812041_1_1_1_1,00.html

6. Taylor MA et al. (2000) A potato alpha-glucosidase gene encodes a glycoprotein-processing alpha-glucosidase II-like activity. Demonstration of enzyme activity and effects of down-regulation in transgenic plants. Plant J 24, 305-316

7. Pedros AR et al. (1999) Manipulation of S-adenosylmethionine decarboxylase activity in potato tubers. Planta 209, 153-160

8. Cellini F et al. (2004) Unintended effects and their detection in genetically modified crops. Food Chem Toxicol 42, 1089-1125

Dr Louise VT Shepherd
Post-doctoral Researcher
Quality, Health & Nutrition Programme
Scottish Crop Research Institute

Prof Howard V Davies
Director of Science Co-ordination
Scottish Crop Research Institute

Janaki Krishna

Pearl millet (Pennisetum glaucum), also commonly known as cumbu, bajra, and cattail millet, is an important grain, forage, and stover crop, accounting for approximately 50% of the total world production of millet. Pearl millet is grown on more than 29 million ha. in arid, semi-arid, subtropical, and tropical regions of Asia, Africa, and Latin America, where it is often a basic staple among the poorest people. Increasingly, pearl millet is grown in non-traditional areas in temperate, developed countries, where diseases have a larger impact. The major diseases that account for severe crop damage in pearl millet are downy mildew (Sclerospora graminicola), smut (Moesziomyces penicillariae), ergot (Claviceps fusiformis), and rust (Puccinia substriata).

Due to substantial annual yield losses, disease resistance has become a high priority for pearl millet breeders. In addition to conventional methods, genetic engineering techniques are used to enhance disease resistance. Antifungal proteins and polypeptides have been isolated from diverse groups of organisms, including plants, fungi, bacteria, insects, and animals (both vertebrates and invertebrates). The mechanisms of action of these proteins are as varied as their sources and include fungal cell wall polymer degradation, membrane channels and pore formation, damage to cellular ribosomes, inhibition of DNA synthesis, and inhibition of cell cycle. Genes encoding cell wall degrading enzymes, e.g., chitinases, antimicrobial peptides, and antifungal proteins, are currently used to create genetically engineered plants with increased fungal resistance in the field. However, whether these transgenic crops gain acceptance in the marketplace remains to be seen.

Expression of antifungal proteins in transgenic plants has improved fungal resistance experimentally in wheat and rice. Researchers from University of Hamburg, Germany, University of Wales, UK, and Australian Centre for Plant Functional Genomics, Australia, recently demonstrated enhanced fungal resistance in pearl millet to two economically important diseases, rust and downy mildew, through stable integration of an antifungal gene (afp) from Aspergillus giganteus. They used two pearl millet genotypes, Manga Nara from the Savannah African Research Institute (SARI), Ghana, and 7042 from the International Crop Research Institute for Semi-Arid Tropics (ICRISAT), India. The biolistic transformation of immature zygotic embryos was carried out using two plant expression vectors: vector p35SacS, which carries the phosphinothricin acetyltransferase (pat) gene from Streptomyces viridochromogenes and confers tolerance to herbicide ‘BASTA’; and vector pubi2afp, which contains cDNA encoding the antifungal protein (afp).

Immature zygotic embryos of Manga Nara and 7042 were co-bombarded with the afp and pat gene vectors at 1550 psi. Two-week-old plants were selected for further studies on gene integration and expression. Transgenic plants M1, from the genotype Manga Nara, and 701, from genotype 7042, had transformation rates of 0.15% and 0.13%, respectively. These plants displayed normal growth, seed set, and fertility. The presence of BASTA and afp genes in T0, T1, and T2 plants was confirmed by molecular studies, including Southern blot analysis. A 3:1 segregation ratio was found for BASTA tolerant to sensitive plants in the T1 generation. Integration of afp gene was confirmed by RT-PCR analysis in the T1 and T2 generations of both M1 and 701 transgenic lines.

In vitro inoculation of afp expressing plants with Puccinia substriata revealed that rust infection of detached leaf segments from the transformed lines M1 and 701 was significantly reduced when compared to their control wild type genotypes. When compared with controls, M1 and 701 transgenic lines of pearl millet showed 11.2% and 8.6% disease severity, respectively, thus demonstrating up to 90% enhancement in disease resistance of transgenic plants.

In all inoculated transgenic plants, pustule formation was delayed in comparison to the control, and the size of P. substriata pustules on wild type plants was bigger. The in vitro leaf segment inoculation results were further verified by comparing them with the in vivo inoculation results conducted on whole transgenic homozygous T2 progeny and wild type progeny. The transgenic plants from M1 and 701 lines showed a high resistance when compared with corresponding wild types, and only 6 of 52 (13.3%) inoculated M1 plants and 7 of 44 (18.8%) inoculated 701 plants showed rust pustules formation, whereas 37 of 41 (85.7%) and 21 of 25 (79.7%) were infected among wild type plants of Manga Nara and 7042, respectively.

Likewise in vivo inoculation of homozygous T2 from transgenic lines M1 and 701 with Sclerospora graminicola showed an efficient enhancement in downy mildew resistance compared to the corresponding wild types. Out of 166 inoculated MI transgenic plants, only 2 (1.2%) showed disease incidence compared to wild type, whereas 95 of 151 (63%) Manga Nara plants were infected. In the 701 transgenic line, 2 of 237 (0.8 %) inoculated plants showed infection symptoms compared to 96.9% infected wild type plants (132 of 136).

In summary, the researchers report the first demonstration of significant fungal resistance in which the afp gene from Aspergillus giganteus was stably integrated in two pearl millet genotypes by particle bombardment of immature zygotic embryos. In vitro and in vivo studies of pearl millet transgenic lines revealed enhanced resistance to the deadly diseases of rust and downy mildew. The expression of the afp gene in the two pearl millet cultivars Manga Nara and 7042 confirms the potential of afp for the improvement of disease resistance and offers great promise in plant protection strategies through genetic engineering. The expression of the afp gene in two cultivars representing different genetic backgrounds validates its potential for disease resistance strategies.


Girgi M, Breese WA, Lörz H and Oldach KH. (2006) Rust and downy mildew resistance in pearl millet (Pennisetum glaucum) mediated by heterologous expression of the afp gene from Aspergillus giganteus. Transgenic Research 15: 313-324

P S Janaki Krishna
Institute of Public Enterprise
Osmania University Campus, Hyderabad, India

Tracy Sayler

Personalized nutrition based on individual genetics, pharmaceuticals from alfalfa, drought-tolerant plants, and improved bioenergy sources are among the next generation of applications that can be expected from agricultural biotechnology.

Next-generation agbiotech applications in North America were discussed in a symposium held recently in St. Paul, Minn., coordinated by the Minnesota Agri-Growth Council, the University of Minnesota, BIOTECanada, and the Canadian Consulate General. Highlights from the conference:

Nutrigenomics – applying genetic science toward human nutrition and health – can be expected to become more prominent, says Chuck Muscoplat, a U of M College of Medicine faculty member and former Dean of the College of Agriculture. As more is becoming known about how genes and chemicals in food affect the genes and chemicals in the human body, more individualized nutrition for better health can be prescribed.

"The hypothesis is that compounds from food can be studied and developed as modulators of gene expression rather than as simple nutrients for basic nutrition," he says. For example, Muscoplat points out that the addition of folate in the diet of pregnant women is, in essence, altering gene expression in a positive way.

Another example of positively altering gene expression through nutrition is genistein, an isoflavone compound in soybeans. Isoflavones act as antioxidants, and studies show that soy genistein has anti-cancer effects. "Genistein is becoming ‘the rage’ now among nutritionists; I take the supplement myself," Muscoplat says. "If I’m a soybean breeder, today I’m breeding for yield and protein, but what about breeding soybean varieties for genistein content? It’s going to happen, not tomorrow, but it’s going to happen."

Medicago ( of Ste-Foy, Quebec, is one company that is already in the process of developing biopharmaceuticals from plants. Medicago has four products under early stage development, including vaccines against avian influenza (namely Hemagglutinin and Neuraminidase) and a product that has shown positive results in animal studies for reducing cholesterol levels. The company is developing its biopharmaceuticals using alfalfa plants grown in high-tech greenhouses. Michele Martel is team leader for biomass production at Medicago, responsible for greenhouse production of plants expressing pharmaceutical proteins.

Why Alfalfa? It’s a highly-efficient protein production system, she explains, a perennial plant that does not die after harvesting but grows back to maturity in five weeks, without flowering, sexual crossing, or producing seeds. All new leaves are identical, perfectly natural clones of the ones they replace. Alfalfa can be harvested at least ten times a year for ten years or more, providing 10g of recombinant protein for every square meter of greenhouse space. Greenhouse production ensures a controlled, contained growing environment, says Martel.

Performance Plants ( is another Canadian biotech company, focusing on developing traits for improved stress tolerance. David Dennis is president and CEO of Performance Plants, headquartered in Kingston, Ontario, with a Crop Development Center in Saskatoon, Saskatchewan. The company has conducted four years of successful field trials that demonstrate its Yield Protection Technology™ to be highly effective in preserving yields under conditions of drought stress. The technology protects crops exposed to drought conditions by stimulating early closure of leaf stomata prior to wilting. Just recently, Syngenta entered into a licensing agreement with Performance Plants for development of drought tolerant corn and soybeans using Performance Plants’ Yield Protection Technology.

In a prime example of the evolving marriage of agriculture and energy – or as Pioneer marketing director Russ Sanders puts it, "linking the seed to the energy need" – DuPont-owned Pioneer Hi-Bred International Inc is partnering with BP to develop, produce, and market biofuels. The first product to market from this union will be biobutanol, which is targeted for introduction in 2007 in the United Kingdom as a gasoline bio-component.

Biobutanol is produced from the same agricultural feedstock as ethanol (i.e., corn, wheat, sugar beet, sorghum, cassava, and sugarcane) with similar environmental benefits. It can be easily added to conventional gasoline, due to its low vapor pressure, has an energy content closer to that of gasoline, can be blended with ethanol, and can be blended at higher concentrations than ethanol for use in standard vehicle engines.

Further, unlike existing biofuels, biobutanol is expected to be potentially suitable for pipeline transport; as a result, biobutanol has the potential to be introduced into gasoline quickly, while avoiding the need for additional large-scale supply infrastructure. Existing ethanol capacity can be cost-effectively retrofitted to biobutanol production with minor changes in fermentation and distillation.

A backgrounder on biobutanol can be found online at

Tracy Sayler
Agricultural writer and ISB correspondent
Fargo, N.D.

Tracy Sayler

A new study released by North Dakota State University, "Marketing Mechanisms to Facilitate Co-existence of GM and Non-GM Crops"1 analyzes data collected from a survey of grain elevators in the Upper Midwest, looking at the practices, time requirements, and costs of segregating genetically-modified grain from non-GM grain. Authors are Benjamin Henry, William Wilson, and Bruce Dahl of the NDSU Department of Agricultural Economics. They say that the development of GM and specialty crops has had a great impact on the grain handling industry during recent years, and that added costs associated with handling these crops have become an important issue for grain handlers.

Some key points from their summary:
Grain segregation practices are already being used at most country elevators, and additional segregation or testing practices for handling GM/non-GM grain content, for example, should not be too difficult to implement at these facilities, i.e., the costs associated with these practices should not be too high.

Results revealed that the cost of modifying systems to handle GM is of major importance, and that the cost of modification is a major constraint to actual segregation. The average per bushel cost of segregation is 8 cents/bu, assuming no modification, and 22 cents/bu if some modifications have to be done.

The volume of grain handled and tested also impacts the total segregation cost per bushel, and it seems it is easier for large elevators to segregate than for elevators of smaller size. The estimated cost of segregation for small elevators is 12 cents/bu and only 6 cents/bu for large elevators.

Still, these estimated costs of segregation are substantially lower than what is found in the literature. Miranowski et al.2 obtained a cost equal to 31 to 34 cents/bu. Maltsbarger and Kalaitzandonakes3 estimated the cost of segregation between 13.4 and 36.6 cents/bu.

Gross elevator margin and the premium for quality seem to be large enough to offset the increase in handling costs due to these new segregation practices. Failure or success of segregation and testing systems is dependent upon the ability of elevators to implement such systems at the lowest costs. However important these costs are, they will always be considered as additional costs of production for the elevator. Unless premiums attributed for grain quality are high enough to offset these extra expenses, very few elevators will decide to segregate and test, even though it is clear that for most elevators, implementing segregation and testing would not be very costly.

The entire report can be found online as a PDF at


1. Henry B, Wilson WW, Dahl BL. (2006) Marketing Mechanisms to Facilitate Co-existence of GM and Non-GM Crops. Agribusiness & Applied Economics Reports, No. 593, September 2006,

2. Miranowski J et al. (2004) Product Differentiation and Segregation in Agricultural Systems: Non-Genetically Modified and Specialty Corn and Soybean Crops in Iowa. Staff General Research Papers 11433, Iowa State University, Department of Economics.

3. Maltsbarger R and Kalaitzandokes N. (2000) Direct and hidden costs in identity preserved supply chains. AgBioForum 3(4), 236-242. Available:

Tracy Sayler
Agricultural writer and ISB correspondent
Fargo, N.D.

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