European Commission Considers Proposal on Biotech Crop Growing Approval

The European Union plans to change the approval process for growing genetically modified crops in the 27-nation grouping, easing a system that blocked all but one application in more than a decade.

The proposal by Health and Consumer Affairs Commissioner John Dalli may be announced July 13, commission spokesman Roger Waite said by phone from Brussels today. It would allow member states to opt out of cultivating approved crops, he said.

The EU’s approval process has hindered companies including Germany’s BASF SE and U.S.-based Monsanto Co. from expanding the European market for biotech crops. The commission in March approved a modified potato developed by BASF, the first such move in a decade, after an approval process that began in 2003.

“You could be looking at a fairly significant increase in crop yields in five to 10 years,” Laurence Alexander, an analyst at Jefferies & Co. in New York, said by phone.

The commission said March 2 it planned to come up with a proposal “by the summer” that would allow EU members more choice on whether to allow growing of genetically modified crops. Waite said governments have been “dragging their feet” under current rules to delay approvals.

“Our hope is that this might accelerate the approval procedure for GMOs for cultivation,” Waite said. “All authorization will still take place on a European-wide basis. A member can then choose for this opt-out clause.”

Animal Feed

The proposals only cover growing biotech crops, not their use in food and animal feed, according to Waite.

Biotech foods range from corn to oilseeds whose genetic material has been altered to add beneficial traits such as resistance to herbicides or toxicity to insects. Since ending a six-year moratorium on new gene-modified products in 2004, the EU has let them be imported for food and feed uses.

The EU approved only two genetically modified crops for cultivation, compared with about 150 being planted worldwide, Jefferies’ Alexander said in a report today.

EU biotech plantings fell 12 percent to 94,750 hectares last year as Germany abandoned insect-resistant corn, the International Service for the Acquisition of Agri-Biotech Applications said in a report in February. Six EU nations planted engineered corn, with Spain accounting for 80 percent of the region’s total, the industry group said.

“We view this as incrementally positive for Monsanto and, to a lesser extent, DuPont, but we note that the proposal could lead to years of wrangling within the EU without a clear-cut resolution,” Alexander wrote in the report.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

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