A Storm Is Breaking Down On The Farm

Sometime next year, the advance party of the long-delayed agricultural biotech revolution will march into grocery stores. It will arrive in wooden carts packed with tomatoes, each bearing a sticker proclaiming "MacGregor--Grown from Flavr Savr seeds." The product of eight years and $20 million in research by Calgene Inc. in Davis, Calif., MacGregor tomatoes have been genetically engineered to retard rotting: They can be picked riper and should be redder and better-tasting than the pale, picked-green, and artificially ripened tomatoes stores carry except at harvest- time. If all goes well, predicts CEO Roger H. Salquist, Calgene will be selling $500 million worth of MacGregors by the late 1990s. By then, they may have cleared a path for a dozen or so other new foods.

If all goes well is the tricky part. For one thing, MacGregors will cost perhaps twice what their natural cousins do in some markets now. But more than that, the Flavr Savr is touching off the most vigorous food fight since the one John Belushi started in the movie Animal House. Some consumer and environmental activists, plus some growers and restaurateurs, view the tomato as a flagship they must sink, primarily by suggesting that its biotech origins make it inherently unsafe. There is no evidence of any health or safety threat from the Flavr Savr. But well-known ag biotech foe Jeremy Rifkin nonetheless vows to "pursue this product until it's dead in the water."

A WINDFALL? Such talk alarms the industry, whose future is riding on those tomato carts, too. Since 1986, the Agriculture Dept. has issued more than 300 permits for field tests on genetically engineered plants. All told, Monsanto, Ciba-Geigy, and Du Pont, plus such startups as Calgene, DNA Plant Technology, and Agritope, have invested more than $1 billion in products that have yet to turn a penny of profit. On the list are a cornucopia of fruits and vegetables, from raspberries to peas, with improved shelf and shipping lives; modified crops--such as corn, cotton, and soybeans--that resist pests and disease; and oils that may be cheaper and more nutritious and versatile than those now on the market.

If consumers like the Flavr Savr, the momentum it generates could lead to a windfall: perhaps $10 billion in annual sales of such products by 2000, analysts say, vs. the $200 million worth of nonfood ag products, such as biopesticides, that are on sale today. If the tomato bombs, the industry may wilt. "People are holding their breath," says Samuel Dryden, former CEO of Agrigenetics Co. and now an industry consultant.

Investors top that list. When biotech ignited in the 1970s, ag markets were seen as potentially rich as medical ones. Gene-splicers hoped to create new foods, improve the taste and nutrition of staples, and fight world hunger. James McCamant, editor of Ag Biotech Stock Letter, estimates that investors bankrolled ag startups with $500 million, and such giants as Monsanto, DuPont, and Ciba-Geigy have invested at least that muchin R&D.

Progress has been slow, however. It's harder to genetically manipulate plants and still create a food that's safe than it is to find novel, natural chemicals in the body to use as drugs. Federal funding of ag research lags behind medical spending, so companies had to finance more basic science. And ag biotech products aren't all blockbusters: The U.S. tomato-seed market is $20 million, for instance, while fresh tomatoes command $4 billion at retail. One solution for ag biotech companies is to contract with growers, then sell the fresh produce, as Calgene is doing. But that requires distribution and marketing savvy, which takes time to build. To these hurdles add public concern. Usually, "there's no question about acceptance" of a new drug, says Edward E. Debus, director of regulatory affairs at Monsanto Co.'s Agricultural Plant Sciences Div. "But in food, acceptance is going to take time." Until recently, in fact, Washington has kept a tight rein on ag biotech experiments.

In no small part, that reflects the efforts of Rifkin, 47, president of the Foundation on Economic Trends in Washington, D.C. An activist by trade, he opposes ag biotech on philosophical, religious, and scientific grounds. He has hounded the industry, filing lawsuits, lobbying Congress for stricter regulations, and castigating biotech companies as profit-seekers risking environmental mayhem.

LOST GROUND. Rifkin has been most successful in creating confusion about biotech. Rather than address the merits of individual products, for example, he tars theindustry with worst-case scenarios. Asked about Flavr Savr, he segues to a warning that splicing animal genes into plants, as some companies are trying, violates natural law, could offend vegetarians and Jews who eat kosher, and could transfer lethal allergens to new foods. Since the Flavr Savr has no animal genes, this infuriates Salquist, who calls Rifkin "a slimebag." Responds Rifkin: "I'm honest, aboveboard, and correct. Personal attacks benefit no one."

Rifkin has recently lost ground with regulators. In May, the Food & Drug Administration said that it would henceforth treat genetically engineered foods like all other foods and not require special testing or labeling--unless major modifications have been made or foreign genes have been inserted in plants. Then in October, the Agriculture Dept. said it would require only notification, not permits, for most field trials, since the hundreds so far haven't turned up environmental threats.

Rifkin is still a potent force, however. In the 1980s, he teamed with small dairy farmers to beat back BST, a gene-spliced hormone designed by Monsanto, Ciba-Geigy, and others to make cows give more milk. The farmers feared that BST would cause milk surpluses, leading to a shakeout that only large dairies could weather. When Rifkin offered to advance their agenda, they lent voice to his safety objections. Some large grocers boycotted milk from BST-injected cattle, and three states temporarily banned it. BST is still on ice at the FDA, and its prospects look grim. In late October, in fact, Monsanto took a write-down of the undisclosed value of its BST inventories. In the wake of all this, says Robert T. Fraley, Monsanto's vice-president for plant science, "we're prepared for war" over genetically altered foods.

A BOYCOTT. Rifkin's strategy against Flavr Savr seems to promise that. The tomato has passed all safety tests and is expected to get a special FDA endorsement Calgene requested even though it isn't required. Even so, Rifkin's "Pure Food Campaign" is urging farmers, retailers, shippers, and restaurants to boycott the product, based on a simple argument: Americans have plenty of good food available, so why take chances? Even after the product goes on sale, he vows to keep up his attacks.

For now, he has enlisted in his campaign 1,500 U.S. chefs from such posh eateries as New York's 21 Club and Water Club and Los Angeles' Spago. "The greatest fear a restaurateur has besides a bad review is somebody getting sick," says Joyce Goldstein, owner and executive chef at San Francisco's Square One. If scientists are wrong about safety, she says, "we're in big trouble." California tomato grower Joe Esformes sees a related risk: Consumers who don't trust biotech will quit buying tomatoes, period, unless gene-spliced ones are clearly labeled. "My family has been in this business for 65 years, and I'm not about to crawl in a test tube with scientists," he says.

Even Calgene's partner on the Flavr Savr, Campbell Soup Co., is ultracautious. Campbell funded original research on the tomato. The company still retains marketing rights for fresh tomatoes outside the U.S. and processed tomatoes worldwide. But James R. Kirk, senior vice-president for R&D, says Campbell won't use Flavr Savrs unless they're first popular with consumers. "We are not jeopardizing this business," Kirk adds. "We clearly have to show ourselves and the consumer what the benefits are to justify moving forward."

No wonder Salquist, 51, is running flat out. He has made more than 30 trips to Washington in the past year to meet with regulators, environmentalists, and the media. "The strategy from day one was to be open with everything," he says. Salquist has pleased regulators, competitors, and even a few activist groups, notably the Environmental Defense Fund, by doing extensive safety tests and publishing the results. Says Robert Serenbetz, CEO of DNA Plant Technology Corp.: "Calgene's approach has led to definitive, reasonable guidelines from the FDA and USDA."

Calgene's true test lies with consumers, however. Most of them rank tomatoes last in any list of satisfactory produce. Mother Nature's tomatoes have "no legs"--don't ship well--says Beth Barnes, produce manager for King Soopers, a chain of 68 Colorado groceries. So, they're picked green--never to really ripen. Barnes thinks consumers will welcome a better-tasting tomato, and Calgene's market research shows it can command a healthy premium. "In December, this tomato may be better than most I can get," says one San Francisco chef, who nonetheless plans to boycott it. Salquist will try to calm consumers by flooding vegetable counters with pamphlets explaining the technology. "We want people to know where this tomato comes from," he says.

Biotechnologically speaking, its origins are simple. Calgene scientists use an "antisense" gene, or the mirror image of the gene that produces an enzyme called polygalacturonase, or PG, which makes tomatoes rot. Inserting this gene in tomatoes stops production of PG. The modification has been widely studied, and Agriculture has found no evidence that Flavr Savr could become a hardy weed or damage other crops. Nor does it show any higher level of toxins.

Such attributes spare the Flavr Savr from the most pointed attacks on biofoods. An experiment at DNA Plant Technology, for example, inserts a flounder fish gene into a tomato to let it better withstand freezing. Such a product will undoubtedly prompt rigorous scrutiny from regulators.

Another question about ag biotech is whether it fosters sustainable agriculture, as the industry claims--or doesn't, as Rifkin and some environmentalists contend. Sustainable agriculture seeks to develop planting, cultivation, pest management, and other nonchemical techniques that lead to environmentally safer and more efficient farming. Biotech companies claim that their products are in sync with this goal, especially plants that are genetically altered to resist disease and pests.

BOON OR BUST? It's easy to see why there's a debate, however. Monsanto, for example, is working to make canola plants tolerant to the company's own weed killer, Round-Up. That would let farmers spray just once, after the canola sprouts. Currently, they must spray twice, before and after sprouting, with two different chemicals. One herbicide is better than two, and the change would save farmers $100 million in chemical and labor costs, Monsanto says. But critics such as the National Wildlife Federation argue that no herbicides are best--and that Monsanto is prolonging reliance on chemicals.

Calgene doesn't have to deal with such issues right now. And William Liebhardt, director of the sustainable development program at the University of California at Davis, says the Flavr Savr makes more sense as a product than BST does. In fact, much will depend on how consumers like its taste. If that's up to par, then genetically transformed corn, potatoes, raspberries, and peas may not be far behind.

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