Russia Says, "Heck No, We Won't GMO!"

Even traditional seeds processed by biotechs may be affected as ban on GM goods grows across Russian Federation.

Apr 28, 2014 at 2:15PM

Another door is closing on Monsanto's (NYSE:MON) ability to sell genetically modified seed, as Russia's prime minister says the country won't import any GMO products. Following a plea by parliament at the end of February for the government to impose a temporary ban on them and President Vladimir Putin saying the country had to protect its citizens from GMOs, yet another market is about to shut to the biotech.

Dmitry

Dimitry Medvedev Source: Wikimedia Commons

"If the Americans like to eat GMO products, let them eat it then," said Prime Minister Dmitry Medvedev earlier this month. "We don't need to do that; we have enough space and opportunities to produce organic food."

Although the importation of GM crops has been a sore subject in Russia, farmers were supposed to be allowed to begin planting their own crops this July. Medvedev just announced, however, certification to do so is being pushed back another three years ostensibly because of delays in creating the necessary framework. Even then, however, he won't guarantee Russia will allow GM material to be used.

As more countries ban the proliferation of genetically modified foods, the willingness of farmers to continue purchasing the seeds from seed giants will diminish. 

Syngenta (NYSE:SYT) recently ran into a brick wall of opposition to its GM corn as China rejected imports of the grain because the strain hadn't been approved. Now it's dragging its feet on deciding whether to approve it at all, and the National Grain and Feed Association estimates the U.S. corn, distillers grains, and soy sectors have sustained between $1 billion and almost $3 billion in economic losses as a result.  It further says China's no-go policy could cause those segments to eventually sustain additional losses of some $3.4 billion.

The NGFA anticipated corn exports to China would total some 7 million metric tons this year, but after the fallout with Syngenta's MIR162 strain it hasn't moved much beyond the 1.23 million metric tons shipped thus far and countries like Brazil and Argentina were recently granted permission to export to China.

According to the Non-GMO Project, there are more than 60 countries around the world that have imposed significant restrictions or outright bans on the production and sale of GMOs. Pretty much only the U.S. allows their unrestricted sale, basing their safety and efficacy on studies conducted by the very companies making the seeds and profiting from their proliferation. And it was the introduction of GMOs into Brazil and Argentina that helped energize sales for Monsanto over the past few years as they grew at an annual compounded rate of 13% and 14%, respectively, and now Africa is its new growth region. Over the last two years, the European-Africa division has grown 16% annually even as  demand for vegetable seeds in Europe have fallen.

A draft bill seeking to tighten control over GMO-based products in Russia was recently issued by the Ministry of Education and Science that precludes their importation "if such products fail to pass the required examinations." Currently there's no limitations imposed, but if the presence of GMOs exceed 0.9%, the goods must be labeled and consumers warned. 

The reverberations of the crisis in the Ukraine have to be causing consternation in Monsanto board offices as it is in the process of building a $140 million seed plant in the country to produce non-GM corn seed. It would be the height of irony then if the leading purveyor of genetically modified seed was stopped at the Russian border, not because of its lab-altered seed that are reviled across much of the world, but rather as it tried to prepare for the processing of traditional shipments of seed to it.

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