Campaigning for sustainable agriculture

Campaigning for sustainable agriculture
Risky Business
Economic and regulatory
impacts from the unintended
release of genetically engineered
rice varieties into the rice
merchandising system
of the US
greenpeace.org
Contents
Introduction 3
1.0 Report Overview 4
2.0 Overview of the World and US Rice Merchandising Industry 4
2.1 The World Rice Market 4
2.2 The United States Rice Market 6
3.0 Overview of Bayer's Liberty Link Genetically Engineered Rice Varieties 9
3.1 Development and Registration of GE rice varieties (Liberty Link 62 and Liberty Link 06) 9
3.2 Development of Liberty Link 601 (LL601) 10
4.0 Discovery of Bayer's LL601 in Commercial Long Grain Rice Market 10
4.1 The Contamination is Discovered to be Widespread 10
4.2 Discovery of Bayer's LL601 throughout the World 11
5.0 Economic Impacts Arising from the LL601 Contamination Event 14
5.1 Farm Level Impacts 14
5.2 Grain Elevator/Processor Impacts Including Testing Costs 16
5.3 Export Impacts 18
5.4 Product Recalls 22
5.5 Exporter Impacts 24
5.6 Summation of Total Costs Arising from the LL601 Rice Event 25
6.0 Litigation Arising from the Accidental Release and Spread of LL601 26
7.0 Other Costs Arising from Bayer's LL Rice Contamination 27
8.0 Conclusions 27
Appendix I Glossary of Terminology 29
Endnotes
Author
Dr E Neal Blue, Neal Blue Consulting
Dr E Neal Blue, Principal - Neal Blue Consulting 730 Kenwick Road, Columbus, Ohio 43209
Legal Notice: All expert opinions expressed herein are solely that of the author of this report.
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3
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Introduction
In 2006, the global rice industry was negatively impacted by
the release of an unapproved genetically engineered (GE) rice
variety called Liberty Link 6011. Liberty Link 601 (LL601) rice
was a seedline under development by Bayer CropScience,
LP2 from 1997 to 2001. LL601 was never approved for
deregulation by USDA. Bayer's Liberty Link rice varieties were
genetically engineered to tolerate Liberty Herbicide
(gluphosinate ammonium). While the initial details regarding
the cause of the unintended release are fuzzy, the resulting
economic effects are not.
Traces of LL601 rice were discovered in the rice grain
merchandising system in Europe, Africa and Asia in August
2006. Soon after the discovery of LL601 traces in the grain
merchandising system, many countries, particularly Europe
and Japan, immediately halted imports of long grain rice from
the United States. Subsequent actions by the United States
Rice Federation dictated that 1) all rice merchandising
channels be thoroughly cleared of rice containing traces of
the GE rice varieties LL601, LL62 and LL06 and also
conventional long grain varieties Clearfield 131 and Cheniere
because they contained the GE contamination and 2) ensure
all future export shipments meet importing guideline
requirements for non GE status. In addition, the USDA and
the Arkansas State Plant Board declared an emergency
action dictating that Clearfield 131 and Cheniere long grain
rice varieties not be planted in 2007 and 2008 because they
were found to be GE contaminated. BASF Corporation's
Clearfield 131 rice variety was found to be contaminated with
a previously unknown genetic event LL604 - created by
Bayer. It is unknown at this time how many LL varieties are or
were under development by Bayer CropScience LP, beyond
the four Liberty Link lines discussed in this document (LL601,
LL62, LL06 and LL604). As of this time, the USDA still does
not have an explanation of how or why the LL601 genetic
event got into the US Rice production system on a wide
scale.
The estimated economic loss resulting from export impacts in
the 2006/07 crop years is estimated to be $254 million. The
future export losses are estimated to be $89 million to $445
million depending on how long the two major export markets
(EU plus the Philippines) remain closed. The direct and
indirect negative effects experienced by the rice producers
due to reduced prices, long on-farm crop storage time,
reduced seed stocks in 2007, testing requirements, a clean
out of the rice merchandising system and lost rice revenue are
estimated to be $199 million to $201 million. Processors
experienced at estimated loss of $88 million to $91 million.
The BASF Company estimates that it lost $1 to $15 million
because its Clearfield 131 seedline, a non GE rice line, was
contaminated with LL62 and LL604. Food product recalls
around the world are estimated between $85 million and
$253 million. Export shipping losses from the loss of US
exports amounted to $25 million. The worldwide estimated
total economic loss due to the LL601 contamination event is
estimated to range from $741 million to $1.285 billion.
A class action litigation against Bayer CropScience LP
brought by US rice farmers is expected to cost Bayer (and/or
its insurers) $1 billion in compensatory liabilities. In addition,
litigation has been brought forth against Riceland Foods and
Producers Rice Mill by British and German food processors.
The estimated compensatory losses of $1 billion facing Bayer
are in addition to the economic losses sustained by the rice
industry world-wide.
4
1.0 Report Overview
The purpose of this report is to give a comprehensive
overview of the Bayer Liberty Link 601 (hereafter called
LL601) event in 2006 and its repercussions, both in terms of
the economics of what happened in the rice merchandising
system as well as the legal/regulatory ramifications arising
from the unregulated release into the system. In addition,
other rice varieties affected by the LL601 event are also
reviewed, including the Clearfield 131 and Cheniere long grain
rice varieties. Before covering the LL601 rice event itself and
its ramifications, it is useful to give an overview of the rice
industry worldwide and in the US. Afterward, the biotechnical
development of Liberty Link rice lines is discussed as well as
the regulatory approval process of some of the Liberty Link
lines. Next, the LL601 rice contamination event is discussed
as to how it got into the environment and how it was
discovered throughout the US rice supplies exported from the
United States. Economic reactions to the LL601 event are
discussed as well as the possible losses to various groups
involved in the LL601 contamination event. Lastly, the legal
ramifications arising from the LL601 event are discussed.
Finally several conclusions are drawn.
2.0 Overview of the World and US
Rice Merchandising Industry
2.1 The World Rice Market
The world rice industry is wide ranging. It is segmented by
type, form and quality. Four types of rice comprise a majority
of the rice production in the world today; a) Japonica: 10%; b)
Aromatic: 10%; c) Indica: 75% and d) glutinous; 5%. Rice is
sold and marketed in three different forms a) milled rice, b)
brown rice and c) rough rice. Lastly, rice is marketed by three
quality levels, high, medium and low.
Figures 2.1.1 through 2.1.4 show the production,
consumption, export and imports for the world rice industry
for the 2006/07 crop year. China, India, Indonesia,
Bangladesh and Vietnam are both the five largest producers
and consumers of rice. In general, 90% of the rice in the
world is produced and consumed in Asia.
In terms of international trade, the five largest exporters of
rice are Thailand, Vietnam, India, United States and Pakistan
(Figure 2.1.3). These five nation's exports constitute 82% of
the world's total export market. The import market, however,
is extremely fragmented (Figure 2.1.4). The main reason is
that the international rice market trading volume compared to
total production is thin. World rice imports are only 7 percent
of total world production. Contrast this with wheat (19%),
corn (12%), soybean (24%), barley (11%), sorghum (8%), oats
(9%) and rye (4%). The five largest importers are Indonesia,
Philippines, Nigeria, Iran and the EU-27 bloc (Figure 2.1.4).
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5
6
2.2 The United States Rice Market
The US rice industry is a high-cost, high-yielding, large-scale
production sector that relies on the export market for almost
50 percent of its annual sales. The government programme
payments to rice farmers on a per-acre basis are high
compared to other farm programme crops. Compared to the
total field crop sales in the US, rice accounts for 2% of the
value of US field crops from 2002-2004. Table 2.2.1 presents
some key facts that highlight the US rice industry.
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
Table 2.2.1. Key facts of the United States Rice Industry
• The average crop value of rice marketings for 2002-2004 is $1.44 billion.
• In 2006 the forecasted value of rice marketings is $1.88 billion.
• The US Census of Agriculture (2002) reports 8,046 farms grow rice.
• The average farm size of a rice producer is 397 acres.
Contrast this to other crop producers:
• Corn 196 acres
• Soybean 228 acres
• Wheat 269 acres
• Cotton 506 acres
• All rice is produced under controlled irrigation.
• In 2005 rice farmers received $168 per acre in government farm programme payments.
Contrast this to government payments for other crops:
• Corn $63/acre
• Soybeans $22/acre
• Wheat $35/acre
• Cotton $115/acre
• Peanuts $178/acre
Source: USDA/ERS - Rice Backgrounder3
Note: Government payments per acre assume a maximum countercyclical payment plus a direct payment4 under the US 2002 Farm Bill legislation.
7
Virtually all US rice is grown in four distinct regions in the US:
the Arkansas Grand Prairie; the Mississippi River Delta (parts
of Arkansas, Mississippi, Missouri, Louisiana); the Gulf Coast
(Texas and Southwest Louisiana) and; the Sacramento Valley
in California. Arkansas is the largest rice producing state,
followed by California, Louisiana and Mississippi.
In the US three types of rice are grown: long grain, medium
grain and short grain. Long grain rice accounts for 70 percent
of total US rice production. 80 percent of the long grain rice
crop is destined for export markets. Medium grain rice is
grown mainly in California and in the Southern US, and
accounts for about 19 percent of the total US rice production.
Short grain rice accounts for 1-2 percent of rice production
and is grown exclusively in California.
Table 2.2.2 presents the US total rice acreage, yield,
and total production in the US. The total production of
US rice rose until 2005 and then declined in 2006 and 2007.
The decreases in rice acres from 2005 to 2006 are attributed
to the high energy and fertiliser prices - two key components
in rice production. In 2007 rice acreage was 3.37 percent less
than in 2006. Most of this decline occurred as the result of
long grain rice acreage reduction. Arkansas, the main rice
producing state, saw its total rice acreage fall by 7 percent
from 2006 to 2007. Added cost of production, lack of
adequate pricing opportunities, crop alternatives and trade
barriers were the causes of reduced rice acreage in 20075. In
addition, the acreage reductions were also due to the
shortage of Cheniere and Clearfield 131 rice varieties caused
by the LL601 and LL604 contamination of the seed supply6.
Source: Monthly issues of Rice Outlook, Economic Research Service: USDA
* 2007/08 numbers are estimated
** August 2007 mid-month estimate
Table 2.2.2. US Rice Acreage, Yield, Production, Marketings and Average Price
Crop Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08* % Difference
2007/08-2006/07
Harvested acres (millions)
Long rice 2.512 2.310 2.571 2.734 2.186 2.082 -4.76
Medium/short rice 0.695 0.687 0.754 0.630 0.635 0.644 1.42
Total rice 3.207 2.997 3.325 3.364 2.821 2.726 -3.37
Average yield (cwt/acre) 65.78 66.70 69.88 66.36 68.68 69.84 1.69
Production (million cwt)
Long rice 157.2 149.0 170.4 177.5 146.2 138.2 -5.47
Medium/short rice 53.7 50.9 61.9 45.7 47.5 53.6 12.84
Total rice production 211.0 199.9 232.4 223.2 193.7 190.4 -1.70
Marketings (million cwt) 158.65 147.32 169.94 183.24 148.69
Average Price ($/cwt) 4.49 8.08 7.33 7.65 9.74 9.89**
8
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
Figure 2.2.1 Key facts of the United States Rice Industry.
9
3.0 Overview of Bayer's Liberty Link
Genetically Engineered Rice Varieties
This section will review the development of several GE rice
varieties by corporate entities that were eventually purchased
by Bayer CropScience, LP7. In addition, the non-GE rice
varieties that are tolerant to herbicides are also discussed - as
they too were eventually affected by the Liberty Link rice
contamination event. Next, the unintended release of Liberty
Link rice varieties into the rice merchandising system is
discussed. A timeline of how the contamination was
discovered and the reaction are discussed.
3.1 Development and Registration of GE rice
varieties (Liberty Link 62 and Liberty Link 06)
Genetic engineering allowed plant breeders to create mutations
in a plant's DNA by direct insertion of selected gene fragments
into the genome of the plant. This is done to create plant traits
such as herbicide tolerance, altered nutrition profiles and insect
and disease resistance. In the mid to late 1990's genetically
engineered crops became commercialised. From 1995 to
the current time GE traits have been developed and
commercialised in corn, soybean, canola, sugar beets and
cotton. The technology of modifying plant traits with genetic
engineering techniques has been controversial for several
reasons: 1) it is not known how genetic modifications will
express themselves physically in the short run and over many
generations of plant growth; 2) there is concern that foreign
proteins that are expressed in the process of plant genetic
modification may cause negative effects in animals and
humans; 3) there is a concern that traits introduced by genetic
modification will drift into wild type and conventional plant
populations, with potential impacts on biodiversity and
ecosystems; 4) that gene drift caused by pollen transfer will
contaminate seeds and crops of those producing conventional
and organic crops, causing economic and financial harm.
At the current time, no GE rice varieties have ever been
cultivated for commercial rice production in the world.
There have been however, developments that have occurred
at major seed companies investigating GE rice varieties,
including herbicide tolerance (Liberty Link), elevated beta
carotene levels (Syngenta's Golden Rice) and rice that
produces pharmacologic agents (Ventria BioSciences).
GE rice is also being developed by governments,
particularly China and research and development is going on at
the International Rice Research Institute (IRRI) in the Philippines
and at national rice institutes. In the 1990's Bayer CropScience
developed several GE rice varieties. The main work was
centred on genetically engineering rice varieties to confer
tolerance to Bayer's herbicide containing gluphosinate
ammonium (sold under the trade names Basta®, Rely®,
Finale® and Liberty®) thus allowing a post-emergent weed
control regimen in rice production. LL62 and LL06 rice lines
were field tested under APHIS authorisations since 1997 prior
to deregulation. Twelve field tests of LL06 were conducted -
ten in California and two in Puerto Rico in 1997 and 1998.
Four field tests of LL62 were conducted - two each in
Louisiana and Puerto Rico in 1997 and 1998. (For technical
details of how LL62 and LL06 were developed see the AgrEvo
petition for LL62 and LL06 in endnote8).
On 15 April 1999 APHIS deregulated transgenic rice
events LL62 and L06 thereby allowing Bayer to pursue
commercialisation of LL62 and LL06. While the rice events
LL62 and LL06 were deregulated for commercialisation, Bayer
CropScience never released them for commercial production -
as the US rice industry refused to support commercial
cultivation of GE rice because of fears of market rejection.
Although LL62 and LL06 were deregulated in 1999, the US
Environmental Protection Agency only registered gluphosinate
ammonium for use in rice in 2002. Since 1999, LL62 and LL06
have been approved by Argentina, Brazil, Canada, Mexico,
and Russia for use in the environment as food and/or feed.
An application for the approval of LL62 for food and feed use in
Europe has been filed and submitted to the European Food
Safety Authority (EFSA), 14 January 20059. The EFSA
accepted the application but has since requested additional
information from Bayer. It is not known whether the additional
information has yet been provided by Bayer. There are also
current applications in Brazil for the importation, cultivation and
field trialling of LL62. Canada gave 'post-contamination'
approval as did Mexico, and the Russian approval does not
seem to be live - as Russia has banned the import of long grain
US rice. Other applications include South Africa, Australia-New
Zealand (single regulatory body) and the Philippines - all for
food and feed approval - not cultivation10.
10
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
3.2 Development of Liberty Link 601 (LL601)
The rice transformation event LL601 was created at about the
same time as the other rice transformation events LL62 and
LL06. The APHIS petition details that the developer of LL601
rice event intended for it to be a backup line to LL62 and
LL0611 12. LL601 was deregulated based on its similarities to
the previously assessed LL62 and 06 varieties. In fact there
are significant differences in the event13. Bayer conducted
field tests of LL601 under 9 APHIS authorisations at several
locations including Louisiana State University's rice research
station near Crowley from 1999 to 2001. Aventis then
dropped the project without seeking government
approval to market it.
4.0 Discovery of Bayer's LL601 in
Commercial Long Grain Rice Market
On August 18, 2006 the USDA Secretary of Agriculture
Mike Johanns made an announcement that Bayer's LL601
transgenic material was found in commercial long grain rice14.
As it turns out the contamination occurred much earlier.
In January 2006 an export customer of Riceland Foods, a
farmer owned cooperative, tested a shipment and found that
it contained some transgenic material. Riceland Foods initially
thought that the transgenic material came from maize
contamination in the rice. Riceland Foods tested rice samples
from several grain storage facilities and found they tested
positive for some transgenic event. In June 2006 Riceland
contacted Bayer to find out if the contaminated strain was
LL601. On July 31, 2006 Bayer contacted Riceland to
confirm that the contamination was in fact LL601 and that
the level of contamination was present at levels equivalent
to 6 out of every 10,000 grains15.
In addition to the USDA announcement, the US Food and
Drug Administration: CFSAN/Office of Food Additive Safety
went on to say that “Based on the available data and
information, FDA has concluded that the presence of this
bioengineered (LL601) rice variety in the food and feed supply
poses no food or feed safety concerns16.” On the other hand
the European agency EFSA found that there wasn't sufficient
data to make a finding that LL601 was safe for human
consumption.17
Right after the August 18, 2006 announcement Bayer filed a
petition with USDA APHIS seeking approval to have LL601
deregulated18. On November 24, 2006 USDA-APHIS
approved the petition to deregulate LL601. The rationale to
deregulate LL601 was based on the fact that both LL601
and LL62 expressed the same PAT protein. That rationale,
however, failed to convince the European Food Safety
Authority, which concluded that: “Although extensive data
have been presented regarding the molecular characterisation
of the intended insert, no full molecular characterisation
was presented and only limited summary data have been
provided regarding the compositional analysis of the rice
and agronomic and nutritional equivalence to conventional
rice. It is therefore not possible to conclude on the safety of
LLRICE601 itself, in accordance with the EFSA guidance
for risk assessment.19”
4.1 The Contamination is Discovered
to be Widespread
After the August 18, 2006 USDA announcement, it became
apparent that long grain rice grown in Arkansas, Texas,
Louisiana, Mississippi and Missouri was contaminated with
the LL601 rice event. This was quite surprising given that the
LL601 was last grown in 2001. The US Department of
Agriculture began an investigation into how the variety
escaped from test plots into farmers' fields, where it was
quietly amplified for years until its discovery. On October 5,
the US Department of Agriculture completed its 14 month
investigation into the contamination of the US rice system.20
They failed to find the source or sources of the contamination,
providing little confidence that they would be able to prevent a
repeat of similar contamination in the future.
There is, however, much speculation on how LL601 got into
the rice production system of the US It is speculated that
foundation seedstock of several rice varieties may have been
contaminated with LL601 when they were grown at the same
locations as the LL601 rice. Either stray seeds got mixed in or
LL601 pollen crossed with some Cheniere variety rice plants.
One of the major long grain rice varieties planted in the
Southern US was and continues to be Cheniere. Records
indicate that the affected plot of Cheniere rice, which was
used to grow "foundation stock" from which much larger
amounts were produced over the next few years, was located
at least 160 feet from the LL601 plot, farther apart than the
11
USDA required21. Analyses of samples of rice varieties that
were grown over the years at the same research station found
that at least one - Cheniere - was contaminated with LL601 at
least as far back as 2003. Later testing confirmed that the
2003 Cheniere seedstock planted in 2006 was in fact
contaminated with the LL601 rice event22.
In response to the ongoing rice contamination event, the
US Rice Federation sent an open letter to US buyers of rice.
The letter laid out the rice contamination event and sought
to reassure the buyers that the US rice supply was safe.
On December 6, 2006, the US Rice Federation issued an
industry-wide memorandum of recommendations US Rice
Industry Recommendations to Reestablish Supply and
Marketability of US Rice23. This document requested that
state authorities in each rice state implement a series of
regulatory provisions to restore customer confidence in the
rice industry. The recommendations included: a) seed testing
protocols; b) certified seed sampling; c) banning the planting
of Cheniere seed; d) crop producer certifications;
e) establishing an industry/landgrant university task
force to educate rice producers.
However, the rice seed industry rejected the plan. In a
statement they said the Federation's proposal “will require
substantial additional costs to the industry for no useful
purpose, creating the risk that legal seed stocks could be
eliminated from the marketplace.” The seed industry does
not want to do any more testing than is required by law.
This conflict between the seed producers and rice growers
will do little to alleviate the anxieties of food producers who
have lost financially through product withdrawals24.
Lastly, right before the 2007 planting season (28 December
2006) the State Plant Board of Arkansas made permanent its
emergency rules that banned the planting of Cheniere rice in
2007 and 2008. In addition, they required that all rice planted
in 2007 be tested for Bayer CropScience's Liberty Link
traits25. The test is the 35S Bar on 3 samples of 10,000
kernels or an alternative equivalent sampling protocol. The
sampling detection was set at 0.01% with a 95% confidence
interval. This level of sampling meets the EU standard for
detecting 0.02% based on the tests being used in the EU26.
In addition to the US Rice Federation and Arkansas State
Plant Board Actions, California's medium-grain rice growers
demanded a statewide moratorium on any GE field trials to
avoid the contamination recently plaguing long-grain growers
in the South27.
On 5 March 2007, USDA-APHIS alerted BASF Corporation
that its Clearfield 131 seed stocks were found to have an
unknown Liberty Link Event. BASF's Clearfield 131 rice
seeds - developed as a non-GE variety - were at some point
contaminated with experimental seeds produced by Bayer.
USDA-APHIS reported that the BASF seed was contaminated
with genetic material from Bayer's Liberty Link 604 rice event.
LL604 was and still is not a deregulated event. On 5 March
2007 USDA -APHIS issued an emergency order prohibiting
the planting of 2005, 2006 and 2007 registered or certified
Clearfield 131 seed lines28.
4.2 Discovery of Bayer's LL601
throughout the World
As mentioned earlier the genesis of the LL601 contamination
scandal was the discovery of LL601 in an export shipment of
rice sent by Riceland Foods, a farmer-owned cooperative.
Soon after the 18 August 2006 USDA announcement of
LL601 being in the US long grain rice stocks, the economic
reaction was swift. Many importing nations immediately
ceased imports of US long grain rice. Table 4.2.1 details the
timeline of LL601 contamination events in some countries.
Rice contaminated with LL601 has now been found across
the world, including in nineteen European countries: Austria,
Belgium, Cyprus, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Luxembourg, Malta, Netherlands,
Norway, Poland, Slovenia, Sweden, Switzerland and the UK.
LL601 contamination has also been found in rice purchased
in the United Arab Emirates, Dubai, Kuwait and the
Philippines, food aid in Ghana and Sierra Leone and rice
being imported into Russia29.
12
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
August 18, 2006
USDA announces LL601 was discovered in US Food Supply.
August 20, 2006
Japan suspends all long grain rice imports from the US.
August 23, 2006
The EU issues Emergency Declaration (2006/578/EC) and
immediately suspends all rice imports from the US30.
August 31, 2006
The Food Safety Authority of Ireland implements a ban
on the import of certain US long grain rice products unless
certificates declaring them to be free of unauthorised GE rice
accompany them31.
August 31, 2006
The US Rice Federation sends open letter to all rice buyers
trying to assure the buyers that the US rice supply is safe32.
September 2006
Japan expands testing of US rice to include all US rice
including short and medium grain rice.
September 11, 2006
European Union officials confirms that 33 of 162 samples
tested by rice millers across Europe had shown traces of
LL601. Officials in Sweden and France also said they found
traces of the gene in commercially available rice.
September 27, 2006
Grupo Ebro Puleva, a Spanish grain merchandiser, the largest
rice merchandiser in the world, halts all US rice purchases33.
October 2006
France detects LL62 in the long grain rice. This represented a
new contamination event as LL62 was not approved for use
in the EU. Further testing reveals problem is widespread in US
supplies.
November 2006
The European Commission introduces testing protocols for
all shipments of rice into Europe, including both LL601 and
LL62, another illegal GE variety of rice that was detected in
imports of US rice into France in October 2006. The EU
protocol was stricter than that proposed by the US and did
not permit importers to rely on US assurances. This followed
an event where two barges of rice arriving at the Netherlands
were found to have LL601 when the US certificate stated
there was none. US attempts to get the EU to agree to the
US testing standards failed.
November 28, 2006
Rice producers from Thailand and Vietnam, together the
world's biggest exporters, announce their commitment
to only growing GE-free rice, in a new memorandum of
understanding. These two countries account for more than
half of all the rice traded in the world market today. and will
put mounting pressure on other rice-producing nations to
commit to a GE-free rice supply34.
Table 4.2.1. Timeline of LL601 Contamination Discoveries and Action Taken
13
January 23, 2007
Riceland Foods and Producers Rice Mill, two major US
rice processors are sued in US Federal Court by Tilda Ltd,
a British company. Tilda Ltd. is seeking damages for finding
traces of unapproved genetically engineered rice in the
food supply35.
February 8, 2007
The Swedish National Food Administration announces that
traces of the unauthorised LL601 rice had been found in 600
metric tonnes (30 containers) of prepacked long-grain rice
imported from the United States.
March 14, 2007
Mexico, the largest foreign market for US rice, sends tremors
through the US rice sector when it stops shipments on the
border out of concern the US cannot keep its experimental
transgenic long-grain rice out of commercial
crops36.
August 17, 2007
A farmer named Kenneth Habetz files a lawsuit against
Louisiana State University and Bayer CropScience, the
developer of genetically modified rice, for allegedly
contaminating the US rice crop and causing harm to his
farm. He alleges that he and other farmers were faced with
increased costs due to the need to maintain the integrity of
their rice supply and for their efforts to keep ”LLRICE” from
further entering supplies. Farmer Kenneth Habetz is seeking
compensatory, exemplary and punitive damages, as well as
injunctive relief37.
August 21, 2007
Rickmers Reismuehle GMBH files separate federal complaints
against Riceland Foods cooperative and Producers Rice Mill,
both based in Stuttgart, Arkansas. Rickmers alleged the
millers breached contracts by selling rice that did not meet
the terms of a 2003 European Union ban on the importation
and sale of genetically engineered foods38.
14
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5.0 Economic Impacts Arising from
the Bayer LL601 Contamination
Event
Prior to the August 18, 2006 announcement of the LL601
contamination, the rice producer price was going up in
response to tight rice supplies. Futures prices for the nearby
delivery months at the Chicago Board of Trade peaked at
$10.38 per hundredweight (cwt). The USDA was projecting
the 2006/07 season average farm price to increase to $9.00
to $9.50 per cwt, the highest it had been since 1998/99.
The higher season average farm price was the result of a 9
percent contraction in the US rice supplies and higher global
trading prices39.
Once LL601 was found to be widespread in US long-grain
rice, prompting Europe to cut off imports, the rice futures
market went into turmoil. The futures contract prices at the
Chicago Board of Trade fell from 9.83/cwt on August 18,
2006 to 8.99/cwt on August 25, 2006. This represented an
immediate loss of 168 million dollars40. Right away producers
were forced to hold on to their rice for a longer time following
the rice harvest. What exacerbated the whole rice
contamination scandal was having the announcement come
right during harvest. Although futures prices recovered to their
pre-event announcement levels, some farmers were reported
to be holding on to their production longer to market it. In
2006/07 the reported marketings by US farmers were down
19% compared to the prior year (Table 2.2.2). This occurred
in spite of the 2006/07 average price being higher than the
2005/06 price. In 2006/07 farm marketings were 76% of total
production. The drop in farm marketings in 2006/07 appears
to be a reversion to the mean percentage level of marketing of
total production. In the 2005/06 crop year farm marketings
were 82% of total production, a multi year high. This was high
compared to the other years 2002/03 (74%), 2003/04 (74%)
and 2004/05 (72%).
5.1 Farm Level Impacts
As discussed previously, the US rice industry began to
implement a programme to ensure a GE-free rice supply.
These included a) seed testing protocols, b) certified
seed sampling, c) banning the planting of Cheniere seed,
d) crop producer certifications and e) establishing an
industry/landgrant university task force to educate rice
producers. In addition, the Arkansas State Plant Board has
a set of penalties for Arkansas producers who fail to test and
provide certificates insuring GE-free rice production. Farmers
had to and will continue to clean out all rice grain and seed
hidden in farm equipment used for planting, harvesting,
transporting and storing crops. The economic cost of this is
the opportunity cost of the farmer's time. Smaller rice
producers will feel the economic impact of the LL601
contamination incident much more than the larger farmers.
Farmers will not be compensated for the extra costs and
labour required to clean their equipment or fields to rid it of
the traces of LL601. The ongoing litigation discussed later will
be one avenue for farmers to recoup lost revenue arising from
the LL601 contamination.
The cost of testing and cleaning requirements in the US to
meet export requirements will add to the cost of producing a
bushel of rice. Cleaning requirements for each farm will vary
depending on the size and the amount of on-farm storage.
Assuming that it will take an average of 40 to 60 hours (at $9
per hour)41 for a producer to clean his farm equipment and
grain storage facilities, the cost per producer will range from
$360 to $540. Assuming that 75% of the 8046 rice farmers in
the US do this, the total costs of ensuring an LL601-free
system would range from $2.172 million to $3.259 million42.
15
Seed testing in Arkansas to meet state requirements for 2007
was estimated to be $600,00043. For the amount of rice
planted in Arkansas in 2007 (1.22 million acres) the cost
comes out to $0.50 per acre. Only Arkansas banned the
planting of Cheniere seed. Other states did not ban the
planting of Cheniere seed, however, given grain market
tracing requirements that the rice industry implemented, seed
producers in other states had to test for LL601. In 2007, in all
other southern US states besides Arkansas, 888,212 acres
were planted in rice. The seed testing requirement for these
acres would be $444,106 - assuming a $0.50 per acre cost.
The estimated total seed testing costs arising from the LL601
incident total $1,044,106 for the year 2007. Since the
restriction on Cheniere seed also is in force in 2008, the same
testing costs will occur in 2008. Thus for the 2007 and 2008
planting season the total seed testing costs will be
$2,088,212.
Long grain rice acreage fell 4.76% (104,000 acres) from 2006
to 2007. However, medium grain rice acreage increased
9,000 acres from 2006 to 2007 (Table 2.2.2). The total net
loss in rice acres (95,000 acres) was solely due to the loss in
long grain rice acreage. Had these lost acres been planted in
long grain rice with an expected 2007 yield of 69.84 cwt/acre,
the extra production would have been 6,634,800 cwt. If this
production were priced at the 17 September 2007 Arkansas
cash price43 of 10.30/cwt the total value of the lost rice
production would have been $68,338,440. This value is
strictly the lost total revenue of rice production foregone to the
producers based on farm gate prices. This value occurs as a
result of reduction of rice acres in 2007. What did the farmers
plant instead of rice? In the Southern US in 2007, especially in
Arkansas, land planted to rice, soybeans and cotton
decreased while the amount of corn acres increased
dramatically. In 2007 Arkansas corn acreage increased 195
percent over 2006. Most long grain rice farmers rotate
between rice and soybeans in Arkansas. However, in 2007,
the loss in rice acres was shifted into corn acres45. If the
95,000 acres planted to corn at an expected national 2007
yield of 155.845 bushels/acre were priced at $3.44 per bushel
(see endnote 43) the expected corn revenue would be
$50,915,440. The net reduction in rice acreage in 2007
resulted in a revenue loss of $17,423,000 to rice producers.
There will be a loss of government revenue to farmers due to
shifting acres out of rice in 2007. Table 2.2.1 shows that in
2005, government payments to rice farmers were $168/acre
versus $115/acre for cotton, $63/acre for corn and $22/acre
for soybeans. In this analysis, it will be assumed that the
decrease in long grain rice acres in 2007 was taken up by
increased corn acres. If all 95,000 acres were planted into
corn, the loss of government revenue would be $9,975,000
[(rice: $168/acre - corn: 63/acre) x 95,000 acres]. This
calculation for determining government revenue loss from
shifting out of rice and into corn assumes 2005 government
figures shown in Table 2.2.1. Since all crop prices including
rice have been increasing since 2005, the countercyclical
payment portion of the government revenue will be slightly
reduced from that seen in 2005. Thus the calculations shown
here may slightly overstate government programme
payments.
Much of the acreage reduction occurred as a result of the
loss of the popular long rice seed lines, Clearfield 131 and
Cheniere, for the 2007 and 2008 planting seasons. These
two seed lines were banned for planting due to the Liberty
Link contamination. BASF Corporation, the developer of the
Clearfield 131, rice line reported it lost $1 million to $15 million
due to the planting ban on Clearfield 13147 48.
16
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5.2 Grain Elevator/Processor Impacts
Including Testing Costs
Rice processors and handlers had to engage in a testing and
cleaning regime to ensure that all incoming rice was GE-free
for the 2007 harvest. As previously mentioned the US Rice
Federation issued a document US Rice Industry
Recommendations to Reestablish Supply and Marketability
of US Rice. This document requested state authorities in each
rice state to implement a series of regulatory provisions to
restore customer confidence in the rice industry. The
recommendations included a) seed testing protocols, b)
certified seed sampling, c) banning the planting of Cheniere
seed, d) crop producer certifications and e) establishing an
industry/landgrant university task force to educate rice
producers. Given that the tone of the document was basically
to have the industry GE-free, processors and handlers had to
engage in extra paperwork to ensure that producers were
delivering GE-free crops. In order to estimate the cost of this
regime, cost estimates were derived from the grain
merchandising literature dealing with identity preserved
segregation. Even though the rice production coming off the
farms in 2007 is not segregated per se, the costs of
paperwork and grain testing make the protocols associated
with rice handling analogous to an identity preservation
system. The extra costs arising from cleaning out and
ensuring GE-free rice grain storage and processessing arise
from a) sampling and testing, b) maintenance, c) mistakes or
misgrades in rice sampling, d) disputes, e) labour, f) other
costs. Maltsbarger and Kalaitzandonakes49 estimated the
identity segregation costs for a range of elevator sizes for
identity preserved high-oil corn. Depending on the elevator
size the segregation costs range from $0.021 to $0.049 per
bushel. Of this, the sample testing analysis costs ranged from
$0.011 to $0.031 per bushel.
For LL601 detection the testing costs will be much higher.
In 2007 many processors including the two major rice
cooperatives Riceland Foods and Producers Rice Mill are
testing every truckload of rice for LL60150. A standard
truckload contains 910 bushels51. Genescan52 a GMO
testing lab charges $180 for a bar 35S test that meets EU's
GE regulations. If every truckload of rice is getting tested this
means that the cost of LL601 testing is $0.197 per bushel
($0.197 = $180/910 bushels). Using this testing cost and
the other segregation costs from Maltsbarger and
Kalaitzandonakes (misgrades, maintenance, disputes/labour
and other) the range of segregation costs for LL601 is $0.207
to $0.215 per bushel. Assuming these costs are applied to
the expected total US rice production in 2007, Table 5.2.1
lays out the estimated total costs.
The total cost to the US rice industry to clean up and
maintain GE-free status for 2007 ranges from $88 million to
$91 million. These costs include the sum of all long grain and
medium/short grain production in the US.
17
Table 5.2.1. Total Costs to the US Rice Industry in 2007 to Ensure a GE-free Rice Supply.
US Long Grain Rice 2007
cwt produced 140,000,000
bushels produced 311,111,111
Non GE regime cost - lower range ($/bushel) 0.207
Non GE regime cost - upper range ($/bushel) 0.215
Cost of GE clean up (lower range) $ 64,400,000
Cost of GE clean up (upper range) $ 66,888,889
US Medium/Short Grain Rice 2007
cwt produced 50,400,000
bushels produced 12,000,000
Non GE regime cost - lower range ($/bushel) 0.207
Non GE regime cost - upper range ($/bushel) 0.215
Cost of GE clean up (lower range) $ 23,184,000
Cost of GE clean up (upper range) $ 24,080,000
2007
Total cost of GE clean up (lower range) $ 87,584,000
Total cost of GE clean up (upper range) $ 90,968,889
Notes: Numbers shown are rough rice produced.
The cwt to bushel conversion assumes 1 bushel of rough rice = 45 pounds
Source: Rice Outlook. August 13, 2007. UDSA - ERS. Publication RCS-07h
The 2007 numbers are estimated production from USDA-ERS
Costs come from Maltsbarger and Kalaitzandonakes (see endnote 48)
18
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5.3 Export Impacts
In addition to the futures price drop at the Chicago Board of
Trade, a majority of all the importers ceased import shipments
from the US. Table 5.3.1 shows the reaction of the countries
importing from the United States.
Table 5.3.1. US Rice Export Markets Impacted by the Presence of LL601
2006 Export Ranking Country 2006 Exports ($ million) Importer Reaction Trade Impacted
1 Mexico 205 GE certification required: trade disrupted yes
2 Japan 169 Testing required yes
3 Iraq 145 Testing required; 1% threshold yes
4 Haiti 112 Trade continues no
5 Canada 107 Testing required; 5% threshold yes
6 EU 69 Trade in long grain rice stopped yes
7 Saudi Arabia 42 Trade continues; label for presence > 1% no
8 Nicaragua 40 Trade continues no
9 Cuba 40 Trade disrupted, situation is uncertain yes
10 Honduras 39 Trade continues no
12 Korea 32 Testing required; tender complications yes
16 Philippines 20 Trade stopped yes
18 Taiwan 20 Testing required yes
Total Exports ($ million) 1,289 Share of global exports impacted: 63%
Note: Russia has banned all US rice imports.
United Arab Emirates requires a GE-free status on US Rice.
Source: US Rice Federation
19
The share of US global exports impacted by the LL601 rice
event is 63%. This translates into $812 million dollars of trade
that was impacted by the detection of LL601. This does not
mean that $812 was lost in exports. A direct loss in US
exports can only be assessed with export data that has been
generated since LL601 was identified in the rice supplies in
August 2006. Since that time, noticeable trends in export
patterns has emerged.
Figure 2.2.1 shows stable export trends for the different US
export destinations until the 2006/07 crop year. Figure 5.3.1
shows the accumulated exports of all US Rice during the
2004/5-2006/07 crop years53 54. The LL601 event occurred at
the beginning of the 2006/2007 crop year. This is a time when
the harvest season is occurring. The EU market almost dried
up. In addition to the EU export losses, the US experienced
export declines in the African continent (mostly Ghana),
Northeast Asia (primarily Japan) and Other Asia, Oceania and
Middle East (primarily Iraq and the Philippines) (Table 5.3.2).
20
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
Figure 2.2.1 shows that the United States has been shipping
to the EU and the Former Soviet Union anywhere from
330,000 to 425,000 metric tons of rice per year in the past
four years. In the 2006/07 crop year the US exports to
Europe fell to less than 50,000 metric tons. The lost value of
this product was $97 million55. The EU economic loss will be
the most permanent loss experienced by the US rice industry.
The EU has the most stringent food and safety regulations
whose thresholds will not easily be met by the US rice
industry. At this time it is not known how long the EU Market
will be effectively closed to the US rice producers.
Other US export markets were totally shut down during the
year following the LL601 announcement. The Philippines and
Papua New Guinea totally closed their markets to US rice
exports. Prior to the LL601 announcement the US exported
$20 million dollars of rice per year to the Philippines and
approximately $6.7 million to Papua New Guinea.
While some US export markets will be regained, some will be
lost to Asian competitors - and possibly Uruguay. Ebro
Puleva, the worlds largest rice merchandiser, has started
sourcing their rice from Egypt, Thailand and Uruguay instead
of the US56. At the time Uruguay was reported to be trialling a
GE rice line. However, they have now made a GE-free rice
commitment. Thailand and Vietnam have announced their
commitments to GE-free rice. In addition, their export prices
being more favourable than US export prices will allow them
to take up the EU, former Soviet Union and Philippines export
market lost by the US.
The export losses to Japan appear not to be permanent.
Japan primarily imports short and medium grain rice from the
US. In general, both short and medium grain rice were not
contaminated with LL601 because they are predominantly
grown in California. Japan was closed to US exports until a
GE testing regime could be put in place.
As mentioned before, the US export losses can only be
determined by what has transpired since the LL601
announcement in August 2006. The decline in exports from
the 2005/06 crop year to the 2006/07 crop year is 663,000
metric tonnes (Table 5.3.2). Approximately 80% of the US
rice exports are long grain rice with the remaining 20% being
mostly medium grain rice (Table 5.3.3). This translates to
export losses of 530,400 tonnes of long grain rice and
132,600 tonnes of medium grain rice. The reported
2006/2007 US rice price quotes for export were $407/metric
tonne for long grain milled rice, $237/metric tonne for rough
long grain rice and $538/metric tonne for medium grain milled
rice. Approximately 63% and 37% of the exported long grain
rice is sold as milled and rough rice, respectively. Almost
100% of the medium grain rice is sold as milled rice.
Assuming these prices and export percentages the estimated
export loss is calculated in Table 5.3.3.
At the most extreme if the EU and Philippine markets remain
closed for 5 years the potential US export loss will be $455
million. This table shows that gaining back export markets will
be no easy task for the US.
Table 5.3.2 US Export Tonnage Declines from 2005/06 to 2006/07.
2006 Export Ranking Decline in Exports From 2005/06 to 2006/07 (000 metric tonnes)
Europe and FSU 336
Northeast Asia 17
Other Asia, Oceania, & Middle East 205
Africa 34
Western Hemisphere 71
TOTAL 663
Source: Rice Briefs, USDA ERS
21
Table 5.3.3 Estimated US Export Losses Due to Export Reductions
Product Exported Tonnes (000) 2006/07 Export Price Quote $ / metric tonne Export Loss ($)
Long Grain Milled 334 407 136,081,915
Long Grain Rough 196 237 46,538,837
Medium Grain Milled 133 537 71,421,000
Export Loss ($) 254,041,752
Source: Rice Brief - ERS/USDA
The calculated US rice export loss occurring in the 2006/2007
crop year is estimated to be $254 million dollars.
Future export losses and/or gains are hard to determine
because of economic and political uncertainty and weather
changes. So far, it appears that US rice exports to the EU and
Philippines, the two major markets listed in Table 5.3.1, market
have not recovered. These two markets represented $89
million in sales in 2006. Typically, once a market is lost it will
take time to recover that market. Table 5.3.4 estimates future
losses to those major markets (EU and Philippines) that have
been totally closed over the past year. Assumptions are made
about how long the EU and Philippines markets remain
essentially closed. The numbers generated in Table 5.3.4
represent extremes in export losses. However, these numbers
represent real losses caused by LL601 contamination.
Table 5.3.4 Estimates of Future Export Losses of EU and Philippines - Assuming 1 to 5 Years of Market Adjustments
Likely Scenarios Extreme Scenario
Years to recover market Accumulated future Years to recover market Accumulated future
export Loss based export Loss based
on Years to recover on Years to recover
(million $) (million $)
1 year 0 1 year 89
2 years 45 2 years 178
3 years 89 3 years 267
4 years 134 4 years 356
5 years 178 5 years 445
Note: Table assumes 89 million dollar sales were lost based on Table 5.3.1.
22
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5.4 Product Recalls
In the EU many grocery chains recalled rice products from the
grocery shelves once it was announced that LL601 and LL62
were found in long grain rice products. While it is hard to
ascertain how much product was recalled and at what prices
it was sold, a good estimate of how much a product recall
costs is to take the retail price of the product in the store. In
the Netherlands a kilogram of rice costs 1.40 Euros57. Given
that LL601 rice was found all over Europe it is safe to say that
the total losses arising from product recalls is basically the
retail cost of the rice itself. The retail cost captures the
product cost and the lost marketing margin. Therefore, taking
the retail price of rice in Europe would adequately capture the
losses of product recall. The only information that is missing is
how many months of rice stocks were present in the
European food chain. Table 5.4.1 lays out various
assumptions and presents the cost of the product recall.
In the 2005/06 marketing year, the US exported 390,400
metric tonnes into the EU and Former Soviet Union (FSU).
In the 2006/07 marketing year, US exports to the EU plus
FSU dropped to 54,000 metric tonnes. This is a 336,400
metric tonne export loss sustained by the US.
In the period preceding the LL601 announcement the US was
shipping approximately 32,000 metric tonnes of rice per
month into the EU and the FSU. Table 5.4.1 presents
estimated retail product loss due to product recall.
The product recall losses range from approximately 45 million
to 134 million Euros. Assuming a 1 euro to 1.34 dollar
exchange rate, this comes out to a $60 to $180 million loss.
The calculations in Table 5.4.1 assume a total product recall.
While a total product recall did not happen, the assumption of
a total product recall and associated costs is reasonable
given that higher value added retail products and other
packaged goods must be removed from the grocery shelves.
There were efforts to recall rice shipments outside the EU
system, particularly in the Philippines and in Ghana58 59. In
2005/2006, the US exported 65,200 and 91,400 metric
tonnes of rice to the Philippines and Ghana, respectively.
As was done in Table 5.4.1 there will be three assumptions
about how much grain is in the food processing pipeline.
Table 5.4.2 lays out the estimated monetary costs of food
product recall in the Philippines and Ghana.
The Ghana and Philippine product recall losses range from
approximately 18 million to 54 million Euros. Assuming a 1
euro to 1.34 dollar exchange rate, this comes out to a
$24.481 to $73.445 million loss.
23
Table 5.4.1 Estimated Monetary Losses due to EU Food Product Recalls
Level of Rice Stock Export Export Retail Cost Total Retail
in EU Food System tonnage kilogram Euros per kg Loss (Euros)
1 month rice stocks 32,000 32,000,000 1.4 44,800,000
2 months rice stocks 64,000 64,000,000 1.4 89,600,000
3 months rice stocks 96,000 96,000,000 1.4 134,400,000
Table 5.4.2 Estimated Monetary Losses due to Philippine and Ghana Food Product Recalls
Level of Rice Stock Export Export Retail Cost Total Retail
in Food System tonnage kilogram Euros per kg Loss (Euros)
1 month rice stocks 13,050 13,050,000 1.4 18,270,000
2 months rice stocks 26,100 26,100,000 1.4 36,540,000
3 months rice stocks 39,150 39,150,000 1.4 54,810,000
24
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
5.5 Exporter Impacts
Export companies that deliver rice freight on board incur a
charge for export. After the LL601 announcement US rice
exports to many destinations dropped precipitously. Table
5.3.2 shows that the US rice exports dropped 663,000 metric
tonnes. The export companies who deliver rice incur a loss in
shipping US rice. Since August 2006 when the LL601 event
was announced, ocean shipping rates from the US Gulf
Coast to Rotterdam and Hamburg ranged from $25 -
$50/tonne. The US Gulf - Japan ocean freight rates ranged
from $40 to $80/tonne. From August 2006 to July 2007 the
ocean freight rates increased. Taking the midpoints of the
ocean shipping rates, the estimated shipper loss was
$25.427 million (Table 5.5.1).
Table 5.5.1 Loss in Export Shipping Revenue
Decline in Exports
from 2005/06 Lost Export
to 2006/07 Freight Rate Shipping
Export Destination (000 metric tonnes) $/metric tonne Revenue, $
Europe and FSU 336 38* 12,615,000
Northeast Asia 17 60* 1,032,000
Other Asia, Oceania, & Middle East 205 38 7,778,600
Africa 34 38 1,292,000
Western Hemisphere 71 38 2,709,400
TOTAL 663 25,427,000
Source: Rice Briefs, USDA ERS. Ocean freight rates: Home-Grown Cereals Authority, Volume 10, Issue 460
25
5.6 Summation of Estimated Total Costs
Arising from the LL601 Rice Event
All the estimated costs discussed so far are put into Table
5.6.1 to generate a range of damage estimates attributed to
their LL rice events.
The total costs incurred throughout the world as a result
of the LL601 rice contamination are estimated to range from
$573 million to $1.117 billion. In the ongoing class action
litigation against Bayer CropScience LP, Riceland Foods and
Producers Rice Mill, farmers who incurred direct and indirect
costs will be able to recoup a part of the losses as a result of
the Liberty Link rice contamination events.
Table 5.6.1 Estimated Losses Arising from the LL601 Rice Event
Cost Cost
Lower Bound Upper Bound
Loss Due to: $ millions $ millions
Farm cleaning 2.172 3.259
Seed testing 2.088 2.088
Producers, foregone rice revenue in 2007 17.423 17.423
Loss of government payments due to shift out of rice 9.975 9.975
BASF reported losses 1.000 15.000
Processor/elevator cleaning & testing 87.584 90.968
Direct export losses for 2006/07 crop year 254.041 254.041
Future export losses (EU + Philippines)* 89.000 445.000
Retail product recalls in the EU 60.032 180.000
Retail product recalls: Philippines & Ghana 24.481 73.445
Export shipping losses 25.427 25.427
Loss due to price drop on futures market 168.000 168.000
Total Losses 741.223 1,284.626
Note: *Assuming closed EU and Philippine export markets from 1 year to 5 years.
26
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
6.0 Litigation Arising from the
Accidental Release and Spread
of LL601
As soon as it was revealed to the world that rice with traces
of LL601 had been unknowingly released into the grain
merchandising system, recriminations began to fly against
Bayer CropScience, LP, Riceland Foods and Producers Rice
Mill. Several law firms began to enact class action litigation
proceedings61.
The first class action lawsuit was filed in the United States
District Court for the Eastern District of Arkansas - Western
Division (Case No. 4-06-CV-01078) on behalf of all rice
farmers in the United States61. This case was filed August 28,
2006. The class action lawsuit seeks damages on behalf of a
class of farmers who suffered from the depression of rice
prices due to the contamination of the US rice supply with
genetically engineered rice that was not approved for human
consumption. The complaint charges Bayer CropScience US,
Bayer CropScience LP and Aventis CropScience USA, Inc
with negligence insofar as they had a duty not to contaminate
the nation's rice supply with unapproved genetically
engineered rice and that they breached that duty. The
complaint alleges that in mid-August 2006, it became public
knowledge that the US rice crop had been contaminated with
unapproved genetically engineered Bayer CropScience rice
found in commercial rice supplies in Arkansas and Missouri.
On April 18, 2007, Adam J. Levitt of Wolf Haldenstein Adler
Freeman & Herz, LLC law firm and Don M. Downing of Gray,
Ritter & Graham, LLC law firm became appointed plaintiffs'
co-lead counsel in the legal case In Re: Genetically Modified
Rice Litigation, MDL 1811 (E.D. Mo.). This legal
announcement basically joined together all class actions
under one proceeding. Adam Levitt had experience with other
agriculturally-related class actions, most notably the StarLink
contamination case where unauthorised Bt-corn sold by
Aventis (now part of Bayer CropScience) was found in the US
food system. Since August 2006, Don Downing has filed suit
on behalf of over 200 Missouri and Arkansas rice farmers. In
the proposed class action, there are now some 460 rice
farmers representing over 248,000 acres of rice. In an April
2006 class action filing, Downing said total compensatory
damages for plaintiffs and other members of the proposed
classes may approach or exceed $1 billion - and that's before
taking into account punitive or statutory damages63.
According to the author's research, as of August 15, 2007
there were 218 filings against Bayer CropScience, LP. The
number of actual litigants is actually larger than 218 because
many of the legal filings were filed as a “party et. al” versus
Bayer CropScience LP. The actual number of litigants making
a claim against Bayer CropScience, LP will be much higher64.
Most of the litigation is directed against BayerCrop Science
LP or Bayer CropScience et. al. (ie. Bayer CropScience US,
Bayer CropScience LP and Aventis CropScience USA.).
In January 2007 Riceland Foods and Producers Rice Mill, two
major US rice processors, were sued in US federal court by
Tilda Ltd., a British company. Tilda Ltd. is seeking damages
for finding traces of unapproved genetically engineered rice
that were found in the food supply (Table 4.2.1).
On August 21, 2007 Rickmers Reismuehle GMBH, a German
rice milling firm, filed separate federal complaints against
Riceland Foods cooperative and Producers Rice Mill, both
based in Stuttgart, Arkansas. Rickmers alleged the millers
breached contracts by selling rice that did not meet the terms
of a 2003 European Union ban on the importation and sale of
genetically engineered foods (Table 4.2.1).
Lastly, a farmer filed suit against Louisiana State University for
being a part of the LL601 contamination on August 18, 2007.
A farmer named Kenneth Habetz filed a lawsuit against
Louisiana State University and Bayer CropScience, the
developer of genetically modified rice, for allegedly
contaminating the US rice crop and causing harm to his farm.
He alleges that he and other farmers were faced with
increased costs due to the need to maintain the integrity of
their rice supply and for their efforts to keep ”LLRICE” from
further entering supplies. Farmer Kenneth Habetz is seeking
compensatory, exemplary and punitive damages, as well as
injunctive relief (Table 4.2.1).
The estimated compensatory damages facing Bayer may
approach or exceed $1 billion. In addition there will be
punitive and statutory damages imposed through litigation.
At this time it is unknown what these damages will be.
Punitive damages, also known as exemplary damages,
are damages that are separate and in excess of the
27
compensatory damages awarded to a plaintiff in a legal suit
that arises from the malicious or wanton misconduct of the
defendant. Punitive damages are imposed to serve as a
punishment for the defendant. The potential size of a punitive
damages award is unpredictable and the process of arriving
at it is just as arbitrary, although it is loosely based on the
worth of the company. There are no maximums and no
minimums as in criminal law - the jury alone determines the
amount. While compensatory damages are insurable, punitive
damages may not be. The situation differs from state to state.
Some states permit insurance for punitive awards while others
prohibit insurance on the basis that insuring these damages
would be against public policy, believing that punishment
should not be transferable65.
Bayer's LL601 rice contamination scandal of 2006 follows
an earlier disaster caused by Aventis CropScience, an
agribusiness unit purchased by Bayer in 2001. Aventis was
responsible for a massive GE corn contamination in 2000.
Starlink corn was a GE corn hybrid line designed to be insect
resistant. USDA-APHIS only registered Starlink corn for use
in livestock feed. Starlink corn was discovered in the US food
supply. Aventis agreed to pay out $110 million to buy back
the Starlink corn66. In addition, the illegal presence of StarLink
in food products and the grain commodity system had
negative impacts on nearly every sector of agribusiness.
Kraft and other food companies recalled StarLink-containing
products. Aventis pulled StarLink from the market and
cooperated with the USDA to offer premiums on StarLink
corn to prevent further contamination of commodity supplies
and channel StarLink for approved uses. This effort was
estimated to cost Aventis an estimated $1 billion67.
Since Bayer and its subsidiaries have ultimately been
responsible for both Starlink corn and now LL601 rice,
the US federal court will consider the Starlink case in
awarding punitive damages. All that can be said is that
the punitive damages that will be levied against Bayer will
be higher than would otherwise be given - had the Starlink
event not occurred.
7.0 Other Costs Arising from Bayer's
LL Rice Contamination
Given the limitations of this study there are innumerable
costs that are not calculated because they are not easy
to estimate. Supermarket chains and food processors face
damage costs that go beyond the direct costs of recall.
Firms in Europe especially food marketing chains experienced
a loss of rice brand intangible goodwill. The loss of brand
goodwill takes a long time to rebuild after a product recall is
implemented. Other costs that will come into play as a result
of the LL601 event include legal costs due to regulatory
compliance, dumping costs to get rid of contaminated
product, logistical costs of product cleanout in the retail
food supply chain and government (taxpayer) costs
(testing, storage, compliance etc).
8.0 Conclusions
In 2006, the United States rice industry was negatively
impacted by the release of an unapproved genetically
engineered rice variety called Liberty Link 601. Liberty Link
601 (LL601) rice was a seedline under development by Bayer
CropScience LP from 1997 to 2001. LL601 was never
approved for deregulation by USDA. Bayer's Liberty Link rice
varieties were genetically engineered to tolerate Liberty
Herbicide (gluphosinate ammonium). While the initial details
regarding the unintended release are fuzzy, the resulting
economic effects were not.
Traces of LL601 rice were discovered in the rice grain
merchandising system in Europe, Asia and Japan in August
2006. Soon after the discovery of LL601 traces in the grain
merchandising system, many countries, particularly Europe
and Japan, immediately halted imports of long grain rice from
the United States. Subsequent actions by the United States
Rice Federation dictated that 1) all rice merchandising
channels be thoroughly cleared of rice containing traces of
the GE rice varieties LL601, LL62 and LL06 and also
conventional long grain varieties Clearfield 131 and Cheniere
because they contain the GE contamination and 2) ensure all
future export shipments meet importing guideline
requirements for non GE status. In addition, the USDA and
the Arkansas State Plant Board declared an emergency
action dictating that the Clearfield 131 and Cheniere long
28
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
grain rice varieties not be planted in 2007 and 2008 because
they were found to be GE contaminated. BASF Corporation's
Clearfield 131 rice variety was found to be contaminated with
a previously unknown genetic event LL604 - created by
Bayer. It is unknown at this time how many LL varieties are or
were under development by Bayer CropScience LP, beyond
the four Liberty Link lines previously discussed. As of this
time, the USDA still does not have an explanation of how or
why the LL601 genetic event got into the US Rice production
system on a wide scale.
The LL601 event led to a reduction in the number of rice
acres planted in 2007. The total acres planted to rice in the
US in 2007 was reduced by 3.37% due in large part to a
reduction of available GE-free seed. Most of the acreage
reduction was due to the decrease in long grain rice acres.
The estimated economic loss resulting from export impacts in
the 2006/07 crop years is estimated to be $254 million. The
future export losses are estimated to be $89 million to $445
million depending on how long the two major export markets
(EU plus the Philippines) remain closed. The direct and
indirect negative effects experienced by the rice producers
due to reduced prices, long on-farm crop storage time,
reduced seed stocks in 2007, testing requirements, a
cleanout of the rice merchandising system and lost rice
revenue are estimated to be $199 million to $201 million.
Processors experienced an estimated loss of $88 million to
$91 million to ensure a GE-free system. The BASF Company
estimates that it lost $1 to $15 million because its Clearfield
131 seedline, a non-GE rice line, was contaminated with LL62
and LL604. Food product recalls around the world are
estimated at between $85 and $253 million. Export shipping
losses from the loss of US exports amounted to $25 million.
The worldwide estimated total economic loss due to the
LL601 contamination event ranges from $741 million to
$1.285 billion.
As of this time a class action lawsuit with 218 plaintiffs has
been brought against Bayer Crop Science LLP. This class
action represents some 460 rice farmers covering over
248,000 acres of rice. Ultimately the class action lawsuit
will represent thousands of farmers in the United States.
In addition, litigation has been brought forth against Riceland
Foods and Producers Rice Mill by British and German food
processors. It is expected that the litigation against Bayer
CropScience will total over $1 billion in compensatory
liabilities. The punitive damages against Bayer are as
of yet, unknown.
The laxities in the US regulatory environment contributed to
the Liberty Link rice contamination events throughout the US
and the world. There appears to be insufficient regulatory
oversight in the environmental testing phase of GE crops.
It is the outdoor environmental testing that led to the LL601
contamination. In addition, the laxities in the EU's food safety
regulations allowed the LL rice to spread throughout the EU
food processing system.
29
Appendix I.
GLOSSARY OF TERMINOLOGY
Agricultural Biotechnology: A range of tools, including
traditional breeding techniques, that alter living organisms,
or parts of organisms, to make or modify products; improve
plants or animals; or develop microorganisms for specific
agricultural uses. Modern biotechnology today includes the
tools of genetic engineering.
Deregulated: If a GE crop has gone through the regulatory
process for USDA to permit commercialisation, it is commonly
referred to as being a deregulated crop. This is necessary
before it is sold and produced commercially. It allows the
product to be moved and planted freely without the need for
notification or permits.
Gene: The fundamental physical and functional unit of
heredity. A gene is typically a specific segment of a
chromosome and encodes a specific functional product
(such as a protein or RNA molecule).
Genetic engineering: Manipulation of an organism's genes by
introducing, eliminating or rearranging specific genes using
the methods of modern molecular biology, particularly those
techniques referred to as recombinant DNA techniques.
GE: acronym for genetically enginereed.
Herbicide-tolerant crops: Crops that have been developed
to survive application(s) of particular herbicides by the
incorporation of certain gene(s) either through genetic
engineering or traditional breeding methods. The genes allow
the herbicides to be applied to the crop to provide effective
weed control without damaging the crop itself.
Protein: A molecule composed of one or more chains of
amino acids in a specific order. Proteins are required for the
structure, function and regulation of the body's cells, tissues
and organs and each protein has a unique function.
Pharmacologic agents: Biologically active substances applied
pharmacologically to the body for their therapeutic effects on
one or more tissues or organs.
Regulated: If a GE crop has not gone through the
regulatory process for USDA to determine if it can be
safely commercialised, it is commonly referred to as being
in regulated status or a regulated crop.
Variety: A subdivision of a species for taxonomic classification
also referred to as a 'cultivar.' A variety is a group of individual
plants that is uniform, stable and distinct genetically from
other groups of individuals in the same species.
1 For Glossary of Terminology see Appendix I.
2 AgrEvo began the development of the Liberty Link rice lines. AgrEvo was purchased by
Aventis in 1999. Aventis was purchased by Bayer Crop in 2002. Bayer's agribusiness
unit is called Bayer CropScience, LP. All development by Bayer's predecessors will be
referred to as having been developed by Bayer CropScience, LP.
3 Rice Backgrounder. Nathan Childs and Janet Livezey. December 2006. UDSA -
Economic Research Service. Publication RCS-2006-01.
4 Countercyclical payments are payments that are made when the market price falls
below a target price. The level of payment is determined by the level of how much the
market price falls below the 2002 Farm Bill established target price. For more
information see “Counter-Cyclical Income Support Payments” at
http://www.ers.usda.gov/Briefing/FarmPolicy/CounterCyclicalPay.htm
5 “Outlook: 2007 Rice and Cotton Acreage Decline Due to Added Production Costs,
Lack of Pricing Opportunities and Crop Alternatives.” Dr. Bobby Coats, Extension
Economist,
6 University of Arkansas, Division of Agriculture. July 2007.
http://www.aragriculture.org/agfoodpolicy/radio/july2007/054_07162007_audio.htm
7 “Mississippi's rice takes another hit” March 16, 2007 By Robert H. Wells, Delta
Research and Extension Center, Mississippi State University Extension.
http://www.seedquest.com/News/releases/2007/march/18701.htm
8 AgrEvo began the development of the Liberty Link rice lines. AgrEvo was purchased by
Aventis in 1999. Aventis was purchased by Bayer Crop in 2002. Bayer's agribusiness
unit is called Bayer CropScience, LP.
9 Petitions of Nonregulated Status Granted or Pending by APHIS: AgrEvo Petition for
LLRice 06 and LLRice62: Petition # 98-329-01p. Federal Register Notice # 98-329-
01p_com. See: http://www.aphis.usda.gov/brs/not_reg.html
10 LL RICE 62 Registration Application for the European Food Safety Authority (EFSA)
see http://www.gmo-compass.org/eng/gmo/db/21.docu.html
10 “Rice Industry In Crisis.” January 2007. Greenpeace International (See page 15)
11 United States Regulatory Agencies Unified Biotechnology Website
http://usbiotechreg.nbii.gov/database_pub.asp
12 USDA Animal and Plant Health Inspection Service: LL62 and LL06 petition
98-329-01p Status: http://www.aphis.usda.gov/brs/aphisdocs2/98_32901p_com.pdf
13 Petitions of Nonregulated Status Granted or Pending by APHIS: Bayer CropScience
Petition for LLRice601 Petition # 06-234-01p. Federal Register Notice # 06-234-
01p_com
See: http://www.aphis.usda.gov/brs/not_reg.html
14 USDA (2006) Statement by Agriculture Secretary Mike Johanns regarding genetically
engineered rice. (August 18, 2006). USDA Newsroom Release Release No. 0307.06.
Available: http://www.usda.gov.
15 “No Cheniere rice in Arkansas due to LL601 trait situation” Nov 17, 2006 12:00 PM,
By David Bennett Farm Press Editorial Staff.
16 “Statement on Report of Bioengineered Rice in the Food Supply”. US Food and Drug
Administration - Center for Food Safety and Applied Nutrition. August 2006.
http://www.cfsan.fda.gov/~lrd/biorice.html
17 Statement of the Scientific Panel on Genetically Modified Organisms in response to
the request of the European Commission on inadvertent presence of genetically
modified rice LLRICE601 adopted on 14 September 2006.
http://www.efsa.europa.eu/en/science/gmo/statements0/efsa_statement_gmo_LLRIC
E601.html
18 USDA Animal and Plant Health Inspection Service: LL601 Petition # 06-234-01p an
extension of the LL62 and LL06 petition # 98-329-01p.
http://www.aphis.usda.gov/brs/aphisdocs2/06_23401p_com.pdf
19 Statement of the Scientific Panel on Genetically Modified Organisms in response to
the request of the European Commission on inadvertent presence of genetically
modified rice LLRICE601 adopted on 14 September 2006.
http://www.efsa.europa.eu/en/science/gmo/statements0/efsa_statement_gmo_LLRIC
E601.html.
20 "Report of LibertyLink rice incidents", United States Department of Agriculture,
October 5, 2007.
http://www.aphis.usda.gov/newsroom/content/2007/10/content/printable/RiceReport
10-2007.pdf
21 “LibertyLink 601 found in LSU AgCenter foundation seed rice” Aug 31, 2006 5:17 PM,
By Bruce Schultz LSU AcCenter
22 “Deregulation of LL601 was aboveboard, says USDA” Jan 22, 2007 9:50 AM, By
Elton Robinson_Farm Press Editorial Staff http://deltafarmpress.com
23 “US Rice Industry Recommendations to Reestablish Supply and Marketability of US
Rice” 6 December 2006. USA Rice Federation.
http://www.usarice.com/industry/communication/SeedRecs.pdf
24 “Rice seed producers take exception to federation's testing recommendations.”
http://agfax.blogspot.com/AgFax Blog December 2006.htm
25 “Emergency Rule to Require Testing of All Rice Seed.” December 28, 2006. The State
Plant Board of Arkansas.
http://www.usarice.com/industry/communication/REVISIONIII_SEED.pdf
26 http://gmo-crl.jrc.it/LLRice601update.htm The JRC is the Joint Research Centre of
the EU
27 “Calif Group Calls For State Halt To Biotech Rice Field Testing.” By news desk on
March 16, 2007. http://oryza.com/Global-Rice/Bio-Tech-News/347.html
28 UPDATE FOR RICE INDUSTRY REGARDING CLEARFIELD 131 LONG-GRAIN RICE
SEED, March 9, 2007. Testing by the US Department of Agriculture's (USDA) Animal
and Plant Health Inspection Service (APHIS) has confirmed the presence of trace levels
of genetic material not yet approved for commercialisation in Clearfield 131 (CL131)
rice seed. Based on these test results, further distribution or planting of 2005, 2006,
or 2007 registered or certified CL131 seed is prohibited. This seed is not an option for
planting this crop season. USDA-Newsroom.
29 GM Contamination Register Report, February 2007. Greenpeace International
30 “Commission requires certification of US rice exports to stop unauthorised GMO
entering the EU”. Brussels, 23 August 2006
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/1120
31 “Food safety Authority of Ireland bans GM rice, US farmers sue Bayer”. Anthony
Fletcher. 31/08/2006 - The FSAI is to implement a ban on the import of certain US
long grain rice products unless certificates declaring them to be free of unauthorised
GM rice accompany them. http://www.foodnavigator.com/news/ng.asp?n=70222-saigm-
rice
32 Open Industry Letter to Domestic Buyers of Rice, 31 August 2006. USA Rice
Federation and US Rice Producers Association.
http://www.usarice.com/industry/communication/GEltr.pdf
33 Rice Industry In Crisis. January 2007. Greenpeace International.
34 United States Department of Agriculture Economic Research Service. 2004. Rice
Market Outlook. USDA Rice Baseline, 2004-13.
http://www.ers.usda.gov/Briefing/rice/2004baseline.htm
35 “Producers Rice Mill target of biotech rice lawsuit.” February 10, 2007 7:46 PM CST in
News By The Associated Press
http://www.nwaonline.net/articles/2007/02/11/news/021107arbiotechlawsuit.txt
36 “Shipments delayed at border: GM worries slow rice into Mexico” 23 Mar 2007 By
David Bennett, Farm Press Editorial Staff. http://www.farmpress.com
30
Economic and regulatory impacts
from the unintended release of genetically
engineered rice varieties into the rice
merchandising system of the US
31
37 “Rice Farmer Claims Research Contaminated Crop.” 29 August 2007. Hattie Sherrick
Burton, Beauregard Daily News, USA.
http://www.deridderdailynews.com/articles/2007/08/29/news/news1.txt
38 “German company sues US rice millers over modified rice “ Associated Press, August
24, 2007. http://www.agbios.com/main.php?action=ShowNewsItem&id=8746
39 “Rice Situation and Yearbook”. Nathan Childs. November 2006. USDA-Economic
Research Service Publication RCS-2006. www.ersa.usda.gov
40 Regional Farm Bill field hearing: Lubbock, Texas. Testimony of .G. Raun _ El Campo,
Texas On behalf of the US Rice Producers Association and USA Rice Federation.
http://agriculture.senate.gov/Hearings
41 Estimating 2007 Costs of Production, University of Arkansas, Division of Agriculture,
Cooperative Extension Service, Publication AG-979-11-06.
42 Medium grain and short grain farmers in California were not affected by the LL601 rice
event.
43 “No easy answers in clean-up of GM rice situation” Dec 21, 2006 12:00 PM, By David
Bennett. http://southwestfarmpress.com
44 USDA Grain Market News- Arkansas Weekly Grain Review - ending 21 September
2007.
45 “Outlook: 2007 Rice and Cotton Acreage Decline Due to Added Production Costs,
Lack of Pricing Opportunities and Crop Alternatives.” Dr. Bobby Coats, Extension
Economist, University of Arkansas, Division of Agriculture. July 2007.
http://www.aragriculture.org/agfoodpolicy/radio/july2007/054_07162007_audio.htm
46 National Agricultural Statistics Service - United States Department of Agriculture - See
2007 corn and rice statistics at: http://www.nass.usda.gov/index.asp
47 “More biotech woes for US rice.” Peter Shinn. March 6, 2007. Brownfield: Ag news for
America. http://www.brownfieldnetwork.com/gestalt/go.cfm?objectid=29619657-
B177-208E-4FA289D3C916F9BB
48 “Attack of the mutant rice” Marc Gunther, Fortune senior writer July 2 2007.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/07/09/100122123/ind
ex.htm
49 Maltsbarger, Richard and Kalaitzandonakes, Nicholas. “Direct And Hidden Costs In
Identity Preserved Supply Chains” Volume 3, Number 4, Article 10.
http://www.agbioforum.org/v3n4/v3n4a10-maltsbarger.htm
50 “Rice leaders push to reopen EU rice market” September 28, 2007. by Forrest Laws,
Delta Farm Press http://deltafarmpress.com/news/070928-libertylink-traits/
51 “Grain Transportation and Marketing Channels” Fapri-UMC Briefing Paper #04-04
June 2004. Food and Agriculture Policy Research Institute. www.fapri.missouri.edu
52 GeneScan Analytics GmbH Engesserstrasse 4, 79108 Freiburg Deutschland +49-
761-5038-200. http://www.genescan.de/aboutus/locations.aspx?lang=English
53 A rice crop year goes from August of one year to the July of the next year. For
example the 2004/05 crop year goes from August 2004 to July 2005.
54 The last accumulated export bar of the crop year is decreased relative to the prior bar
due to USDA Export data revisions.
55 “GMO rice found safe, but trade still fettered Reuters”, 28 November 2006. By Missy
Ryan.
56 Letter from Ebro Puleva to Greenpeace, 29 September 2006.
http://www.greenpeace.org/international/press/reports/letter-from-ebro-puleva-to-gre
57 Price of rice in Netherlands given to author by Greenpeace.
58 Contaminated US Rice Must Be Recalled From Africa - African Centre for Biosafety
27 November 2006
59 http://www.biosafetyafrica.net/portal/index.php?option=com
_content&task=view&id=40&Itemid=29
59 “Who's the willing puppet?” Rina Jimenez-David, 09/16/2007 Inquirer.net
60 “Ocean Freight Rates for Dry Bulk Cargoes” Home-Grown Cereals Authority Volume
10, Issue 04. http://www.hgca.com/imprima/miprospects/vol10Issue04/minisite/6.htm
61 A class action court proceeding is an action declared by a US Federal Court Judge.
Here a group of plaintiffs with similar claimed damages can as one group seek
damages against a single defendant. In this case US long grain rice farmers suffering
the impacts of contamination of their rice with Bayer's genetically engineered rice
varieties are the potential members of the class.
62 Class Action Website: Emerson Poynter LLP is a national law firm with offices in
Houston and Little Rock. http://www.llrice601contaminationlitigation.com/
63 USA: GM rice - proposed class action - toll exceeds US$ 1 billion. By David Bennett.
Delta Farm Press, May 28 2007.
64 Confidential research conducted by the author.
65 “Punitive Damages” AON Risk Management.
http://www.aon.com/us/busi/risk_management/risk_transfer/punitive_damages.jsp
66 "Aventis Reports Full Year Results for 2000," Aventis press release, March 2, 2001.
67 “Starlink™: Fallout From A Shooting Biotech Star.” Stephen Moose, Assistant
Professor, Department of Crop Sciences, University of Illinois - Urbana Champagne
http://agronomyday.cropsci.uiuc.edu/2001/tours/StarLink/index.html
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