BASF Said to Mull Genetically Modified Crop Exit in Germany

BASF SE (BAS), the world’s biggest chemical maker, may withdraw genetically modified crop research from Germany in response to growing political opposition, three people familiar with discussions said.

The maker of the Amflora scientific potato is considering the future of its research facility in rural Limburgerhof in southwestern Germany, said the people, who asked not to be identified because the plans aren’t public. A move to the U.S. is possible for the plant biotechnology operations, which employ 700, said one of the people.

Germany plans to close all 17 of its nuclear reactors by 2022, exiting atomic power after a meltdown in Japan stoked safety concerns. The move has strengthened the Green Party, which rejects nuclear energy and is now a junior coalition partner in BASF’s home state. The risks of genetically modified organisms are difficult to calculate, the Greens say.

“GMOs may be just like atomic energy,” said Ulrike Hoefken, the Green Party’s regional environment minister. “The risks are masked and big benefits are claimed. But it’s the general public who is left with the costs for any damage.”

The flight of research means Germany may lose out on the $12 billion market for genetically modified plants, which is set to grow 5 percent annually over the next five years, according to advisory firm Phillips McDougall. BASF founded the agricultural center in Limburgerhof in 1914 and now has 11,000 square meters of greenhouses and some 40 hectares of fields.

Weighing Politics

BASF, in an e-mailed response to questions, said it’s too early to comment on the future of plant biotechnology research, though the company will take regional politics into account. The company has already halted projects focusing solely on the European market, it said. The Green Party tripled its vote in Rhineland-Palatinate, home to BASF’s Ludwigshafen headquarters, on March 27.

“We are committed to green biotechnology,” Peter Eckes, head of BASF’s plant science unit, said in an e-mail. “We value the open and constructive dialogue we have had with Rhineland- Palatinate’s government in the past and want to continue this dialogue with the members of the new government. This also includes the clarification of the new government’s attitude toward green biotechnology.”

The potential setback comes a year after BASF won permission to plant its Amflora potato for use as a thickening agent for paper, overcoming 13 years of opposition from environmental groups in Germany and Sweden who cited possible damage to health and ecology.

Missing Out

Developing countries will overtake industrialized nations in planting genetically modified crops before 2015, said Clive James, founder of nonprofit International Service for the Acquisition of Agri-biotech Applications, or ISAAA.

A European Union plan to let individual member states ban the cultivation of GM crops won support this week. Legislators endorsed a draft law that would give governments an opt-out from rules making the EU a single market for goods. The aim is to accelerate approvals of applications to plant scientific seeds.

“The price countries like Germany will have to pay if they decide against biotech will be very high,” James said in an interview on June 15. “The money and the scientists would go elsewhere. That’s a long-term loss.”

James estimates 15.4 million farmers use biotech crops, 90 percent of those being “among the poorest of the poor.” The crops are an “essential element” to help reach the United Nation’s goals of cutting poverty and hunger, James said.

Monsanto’s Moves

German seed maker KWS Saat AG (KWS) carries out research and plants test fields in its home country, while commercial planting takes place in the U.S. because of regulatory hurdles in Europe, according to spokeswoman Sabine Michalek. Bayer, based in Leverkusen, Germany, located its plant biotechnology research in Belgium.

Monsanto Co. (MON), the world’s largest seed company, has pared plant development in Germany to a sole project with two test fields because the country’s “basic framework doesn’t lend itself to further products,” company spokesman Andreas Thierfelder said.

“We’re keeping the minimum required to retain our accreditation,” Thierfelder said by telephone on June 22. “It’s just enough to keep our foot in the door.” Monsanto does most of its research in Missouri, where the company is based.

China may be spending the most on researching crops engineered for specific traits or resistance to pests, ISAAA’s James estimates, with Brazil and India also investing heavily.

“China sees it as a strategic issue, a question of independence and of food security,” he said.

To contact the reporters on this story: Sheenagh Matthews at smatthews6@bloomberg.net; Richard Weiss in Frankfurt at rweiss5@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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