lunes, julio 14, 2008

The Agrofuels Trojan Horse: Biotechnology and the Corporate Domination of Agriculture

Policy Brief No. 14
by Annie Shattuck
April 2008

For copies, contact Food First Books
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About the Author
Annie Shattuck holds a degree in Environmental Studies concentrated in Plant Biology from the University of California, Santa Cruz. She is an intern at Food First.

The author would like to thank Eric Holt-Gimenez and the staff of Food First for their creativity and collaboration. This would not have been possible without their support.

Background: The Birth of an Oligopoly 1
Consumer Rejection Threatens Markets 2
Corn Ethanol: Harbinger of the New Ag-Economy 3
Second Generation Energy Crops: Power and Profit Painted Green 4
The Cellulosic Halo 6
If the Horse Enters the Gates... 7
The Food Bait and Switch Crisis 7
Notes 8

Biotechnology is poised to strike at our agricultural system on a scale never before imagined. Ten years after the launch of biotech in agriculture, the debate rages on. Consumers, farmer's organizations, social movements and environmental advocates all fiercely oppose biotechnology in agriculture, while the industry has continued to expand its presence in the developing world, often through undemocratic means. But resistance, and effectively all public debate on biotech, may well be put to rest for good by the world's growing dependence on agrofuels. The sunny glow of alternative fuels helps lend biotech the public credibility it has lacked since its market debut. While new traits for agrofuels are already helping corporations amass unprecedented market power, a pipeline of new fuel crops stands waiting in the wings. The new pipeline will have much the same effect as previous biotech offerings: contamination of public genetic resources and even further industry consolidation. Agrofuels are the perfect Trojan Horse, promising not only whole new markets for biotech products, but the irreversible entrenchment of genetically modified crops throughout the world.


Corn Ethanol: Harbinger of the New Ag-Economy

With the signing of the 2007 Energy Bill, President Bush committed the nation to a Renewable Fuels Standard which will, according to Republican Senator Pete Dominici, “use ethanol and a new generation of advanced biofuels to displace oil.”xxi The standard pushes an already growing market for liquid biofuels, to 36 billion gallons a year by 2022. While 36 billion gallons represents only a fraction of the U. S.'s total fuel consumption, it opens a bonanza of investment and even further consolidation in the agricultural industry, what many have dubbed the “Agrofuels Boom.” The Renewable Fuels Standards in Europe and the U.S. mandate the use of more corn ethanol than is physically possible for either region to produce, driving the transformation of corn for food to GM “dedicated energy crops.” While language in both RFS suggest an eventual move to alternate feedstocks, the biotech industry's foray into fuel corn gives us a picture of what future markets for agro-fuel feedstocks might look like.

Both Monsanto and Syngenta have recently come out with genetically modified varieties specifically for processing into ethanol. According to industry, increased processing efficiency and higher yield of ethanol per bushel for these varieties will benefit both the ethanol refiners and farmers. However, farmer's marketing options are much more limited with these newly-patented energy crops. In an indication of what is to come, Monsanto and agribusiness giant Cargill have recently launched a joint venture called Renessen, a whole new corporation with an initial investment of $450 million dollars. Renessen is the sole provider of the first commercially available GM dedicated energy crop, “Mavera High-Value Corn.” Mavera corn is stacked with foreign genetic material coding for increased oil content and production of the amino acid lysine, along with Monsanto's standard Bt pesticide and its Roundup Ready gene. The genius of this operation, and the danger to farmers, is that farmers must sell their crop of Mavera corn to a Renessen-owned processing plant to recoup the “higher value” of the crop (for which they paid a premium on the seed). Cargill's agricultural processing division has created a plant that only processes their brand of corn. Further, due to the genetically engineered presence of lysine, an amino acid lacking in the standard feedlot diet, they can sell the waste stream as a high priced cattle feed. Renessen has achieved for Monsanto and Cargill nearly perfect vertical integration. Renessen sets the price of seed, Monsanto sells the chemical inputs, Renessen sets the price at which to buy back the finished crop, Renessen sells the fuel, and farmers are left to absorb the risk. This system robs small farmers of choices and market power, while ensuring maximum monopoly profits for Renessen/Monsanto/Cargill.

Resistance to corn ethanol however, is strong among farmer's movements and environmental groups. Even in official policy circles corn ethanol is seen as a temporary step towards “second generation” fuel crops. U.S. federal subsidies to corn ethanol are politically unsustainable, and numerous studies have questioned its energy efficiency, claiming ethanol yields less energy than it eats up in production.xxii xxiii xxiv Civil society groups have also accused ethanol of robbing food from the mouths of the poor. This food vs. fuel debate has been the most damaging for the image of agrofuels. Agrofuels were blamed as one of the reasons the price of tortillas in Mexico shot up 400%, leading to widespread protests and an eventual government cap on prices. The recent spike in global food prices has sparked food revolts in Italy, Morocco, Mauritania, Senegal, Indonesia, Burkina Faso, Cameroon, and Yemen. In Egypt and Haiti over a dozen protesters were killed in food-related protests. While the ethanol industry’s champions proudly claim “We drink the best and drive the rest!”xxvi for many people burning food in a world with 824 million hungry people is clearly immoral.

While sales of GM corn and soy for agrofuels climb steadily, these crops do little to solve the biotech industry's PR problem. Advanced energy crops, like cellulosic ethanol, promise to open new markets for biotech products and put to bed the issue of consumer rejection once and for all.

Second Generation Energy Crops: Power and Profit Painted Green

The biotech industry promises to develop a “second generation” of new cellulose-based energy crops that can grow on land unusable for modern agriculture, eliminating the food vs. fuel debate currently plaguing the agrofuels industry. They promise to use environmentally friendly native plants like switchgrass, to produce carbon-neutral fuels, and to reduce chemical inputs on these new green energy plantations by engineering plants to grow in resource poor areas. Greater efficiency, opportunities for small farmers, and nothing less than the complete revitalization of rural economies are all supposed to come down the magic biotechnology pipeline in the form of cellulosic energy crops. Cellulosics are inedible but little understood, making all the mythology surrounding them easier for the public to swallow. Perhaps best of all for the biotech industry, second generation ethanol, like cellulosic, promises to open brand new proprietary markets for the biotechnology products being rejected by consumers worldwide.

Cellulosic energy crops can conceivably be produced from any plant material: corn stalks, trees, sugar cane biomass, or grasses. One might ask, with so many possibilities for feedstock, why biotechnology stands to play such a large role. Biotechnology addresses two key factors: processing efficiency and yield. For example, “Energycane,” a new product in the pipeline at Ceres, Inc., in which Monsanto is a key equity shareholder, is merely sugarcane with genetic coding for increased biomass and decreased sugar content, i.e. a higher yield of cellulose. Other biotech traits aim at faster growth, shorter time until maturity, increased oil content, and frost or drought tolerance, all traits that attempt to conform nature to an industrial model.

Like first generation biotech traits, many of the energy traits being developed are designed for opening and dominating markets. In fact, many of these traits will create markets from scratch, augment the already lucrative markets for chemical inputs, and deliver the full control of these markets to the tightly packed corporations of the biotech industry. What do these new traits look like?

Range expansion, drought/freeze tolerance, growth on marginal land – Some of the most highly advertised traits being developed allow a plant to escape its own physiological limitations to grow on poor soils, in water scarce regions, and to withstand freezing temperatures. In other words, these traits aim to make industrial monocrops grow where they otherwise could not. Expanding the range of energy crops will expand the acreage under industrial agriculture worldwide, and with it, a dramatic expansion in the market for seed, fertilizers, pesticides, and other inputs, conveniently sold by the same group developing this technology. Mendel Biotechnology, a privately controlled firm with heavy investments by Monsanto and British Petroleum, has already identified and isolated genes for these new traits.

Increased biomass and faster growth – The biotech industry is working on code for faster growing plants that put more energy into producing biomass, or overall material, than specific products like sugars, nuts, oils, and tubers. What fast growing really means, though, is high nitrogen consuming. Nitrogen, in the form of nitrates and ammonium, is the primary limiting factor in plant growth. Plants that are good at using nitrogen and can use a lot of it quickly, will grow faster, and produce more biomass. This is all well, except that in industrial agriculture the pressure of high-density, high-nitrogen using plants rapidly depletes soil nutrients, making the system more dependent on chemical fertilizers. Increased biomass is also a physiological trade-off. Plants like the GE sorghum being developed by Ceres Incorporated (a small biotech firm with significant equity investment from Monsanto), trade their ability to produce a food product for increased biomass. Farmers growing this crop in the future will have to accept the price offered by the nearest ethanol refinery, instead of having diverse local and international food markets to fall back on when commodity prices inevitably fluctuate.

Reduced lignin content in trees – Lignin is the woody compound in the cell wall that gives trees both their structural integrity and their resistance to pests. Lignin is also what makes it difficult to pulp trees into paper and unlock cellulose in wood to produce ethanol. ArborGen, a biotechnology firm with heavy investments from the industrial forestry industry, is developing trees with 20% reduced lignin content. This development could necessitate the use of pesticides in plantation forests, because some of the natural pest resistance will have been engineered out of the trees. Because genetic modification of tree species is a relatively new field, only a few companies have invested in GM trees. This means that competition in the field will be next to nothing, ensuring a global monopoly. The CEO of Rubicon, an industrial forestry company and one of three owners of ArborGen, notes “the annual unit sales of forestry seedlings are well into the billions, recur every year, and span the globe. ...there are no global competitors to ArborGen.”xxvii

Proprietary GM Enzymes, Bacteria and Catalysts – Processing cellulose into sugars is the largest hurdle in making cellulosic ethanol practical. At its current stage, processing is vastly inefficient. Much disagreement exists as to when and if cellulosic processing will be efficient. Some reports say it will arrive within the next two years, others claim it will never come. Regardless of doubts about the technology, the engineering of new enzymes and bacteria that can break down cellulose is a multi-million dollar race. Large ag-biotech corporations and oil companies are partnering with smaller start up biotech firms to control the keys to unlocking the potential of cellulosic ethanol. Codexis, one of the leading developers of GE enzymes is partnering with Syngenta and Shell Oil Corporation for its research and development, while Iogen Corporation is funded by the major venture-capital firm Goldman-Sachs as well as Shell. Some enzyme biotechnology firms also own ethanol processing plants, like the Kholsa Ventures funded company, Range Fuels. Patents on this technology will essentially put a stranglehold on the cellulosic ethanol market. Whoever controls the most efficient catalysts will have a virtual monopoly on processing fuel, meaning that feedstock prices paid at the farm gate will be set by the processor, robbing farmers of market power yet again.

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