GMO Soy Planting In Brazil Said To Be Spreading North

TODD BENSON / Dow Jones News Wires 18dec01

SAO PAULO -- Natural food buffs may find it increasingly hard to buy non-genetically-modified soy products in Brazil, one of the world's few major soybean producers that still officially bans GMOs.

And while Brazil's ban hasn't stopped GMO seeds from being smuggled in from neighboring Argentina - where more than 90% of the soy crop is genetically-modified - illegal planting on the Brazilian side of the border was thought until recently to be limited to the southern part of the country.

As a result, buyers in search of non-GMO soy simply avoided Brazil's southern ports, instead opting to contract shipments from outlets further north, thousands of miles away from the black-market GMO hotbed along the Argentine border.

But that may no longer be a safe bet. Soy watchers here say genetically-modified seeds are now popping up in the soy-rich Center-West and as far north as Bahia and Maranhao states, posing a serious threat to Brazil's GMO-free reputation among big, health-conscious buyers such as Japan and the European Union.

"GMO soy isn't restricted to the southern part of the country any more," said Joao Henrique Hummel, president of Brazil's seed association. "We've got proof that GMO seeds are being planted in the Center-West, Bahia and even in Maranhao."

That proof, Hummel says, consists of data showing that seed sales from authorized dealers simply don't correspond with the rise in demand and total planted area, implying that many more seeds are being bought unofficially. Indeed, national seed sales this year are seen reaching around 680,000 metric tons, for a record planted area of 15.5 million hectares. Last year, seed sales totaled 670,000 tons, for a much smaller planted area of 13.9 million hectares.

In the Center-West alone, which accounts for more than 40% of national output, some analysts estimate that as much as 300,000 hectares have already been planted this year with GMO seeds. In the South region, where GMO soybeans were first detected in 1997, close to 20% of total planted area is now genetically-modified, according to market estimates.

But that's peanuts compared to Rio Grande do Sul, Brazil's southernmost state and home the country's third-largest soy crop. Between 40% and 50% of the state's soy fields are believed by many in the market to be genetically-modified, thanks to the relative ease with which illegal seeds can be brought in from Argentina.

Farmers Creating Their Own GMO Varieties

Unlike in the South, the origin of the GMO seeds that farmers are using further north doesn't appear to be Argentina.

Anderson Galvao, a soy specialist at local consulting firm MPrado Consultoria Empresarial, says Brazilian growers are reproducing their own GMO seeds to adapt them to the country's different terrains.

"It's really not all that hard to modify GMO seeds," said Galvao.

Whereas farmers in the South prefer the Roundup Ready variety produced for the Argentine market by U.S. biotechnology giant Monsanto Co. (MON), growers in the Center-West are using homemade varieties called "cristalina" and "conquista," according to Hummel, of the seed association.

Because GMO products are currently banned here, the government has a policy of not commenting on reports that Brazilian farmers have long been planting and selling genetically-modified soybeans.

Yet many officials - including Agriculture Minister Marcus Vinicius Pratini de Moraes - make no secret of their support for the legalization of GMOs, which most market observers here say is bound to happen at some point.

Critics say it is precisely because government officials are biased that GMO planting is beginning to spread unchecked across Brazil's ever-expanding soy belt.

"Everyone knows that the GMO issue is a national problem, but the official bodies that should be auditing our crops are turning a blind eye to the problem, as if it didn't exist," said Renato Sayeg, a veteran soy broker in Sao Paulo.

What some here criticize as government negligence has prompted some trading houses to take the matter into their own hands. Keen to guarantee some hefty premiums from big-spending clients abroad, a number of trading companies are testing for GMO seeds at different points in the growing chain.

"You have to know who you can buy from to guarantee that you're getting GMO-free soy, so some trading houses are tracking the product from planting to the harvest," said Carlo Lovatelli, president of Brazil's soy crushing industry association, known here as Abiove.

Brazil is the world's second largest soy producer, after the U.S., accounting for about 20% of global supply. Soy is one of the country's biggest agricultural breadwinners, bringing in close to $5 billion in annual trade revenue.