Like a slowly growing but unstoppable tide, opposition to food created from genetically modified organisms (GMOs) has reached a fever pitch. Now more than ever, public perception will be shaping not only consumer behavior, but also corporate decisions and legislation at every level.
While there are some legitimate concerns when it comes to GMOs and the Big Four companies that manufacture them -- Monsanto (NYSE:MON), DuPont (NYSE:DD) Dow Chemical (NYSE:DOW) and Syngenta (NYSE:SYT) -- the benefits of using the seeds need to be carefully weighed before any long-term decisions are made.
As leading GMO producer Monsanto clearly states on its website, yield increases depend largely on how well a farmer has controlled weeds and pests before using GMO seeds. Somewhat paradoxically, the better a farmer controlled weeds and pests beforehand, the smaller the yield will increase.
That's because the gains from GMO seeds don't happen because they magically produce more fruits, vegetables, or grains. Rather, it's because the proportion of the harvest that's lost to weeds and pests decreases dramatically. When farmers have the resources -- in terms of knowledge, experience, and physical necessities -- to manage pests without GMOs, there is a significantly lower benefit from their use.
In developing countries -- especially those where the rural poor encounter pest problems regularly without adequate resources to combat them -- the benefits can be much higher. Monsanto, for instance, claims that in Hawaii "virus resistant papaya has increased yields by an average of 40 percent."
This is where many who are concerned about the environment may be surprised. Because certain seeds can be made to be toxic to their most commons pests (i.e. Bt corn), some pesticides don't need to be sprayed on fields. That means less pollution and disturbance of local ecosystems for all the other forms of life.
This summer, The New York Times did a piece on the crisis in Florida since the onset of the "citrus greening" disease, which is carried by several winged insects. Many of the state's orange growers poured millions of dollars into development of a GM orange that could withstand the disease.
While scrambling to develop a suitable seed, Ricke Kress of Southern Gardens openly stated, "We're using a lot of chemicals, pure and simple. We're using more than we've ever used before." That's because the insects, which were previously harmless to the crop, now had to be wiped out completely.
The intensity of pesticide use, and the accompanying effects on the soil and surrounding ecosystem, was far greater than before citrus greening arrived. When a greening-resistant orange is introduced, the thinking goes, pesticide use could fall dramatically, which would be much better for the environment.
The situation in Florida was no anomaly. A 2004 report from the National Center for Food and Agriculture Policy stated clearly that "adoption of GM crops resulted in pesticide use reduction of 46.4 million pounds in 2003."
Finally, though it may sound a little bit like the creation of "Frankenfood," there are times when companies or nonprofit organizations can engineer a type of food with extra vitamins.
Such is the case in the Philippines, where the International Rice Research Institute is testing genetically modified rice -- dubbed "Golden Rice" -- enriched with beta-carotene. The beta-carotene prevents Vitamin A deficiencies, which is important in certain areas of the world where access to Vitamin A is limited. Without these nutrients, incidents of both blindness and death are much higher than in the general population .
In the end, there's a laundry list of threats posed by GMOs as well, which you can read about here. Keeping an eye on how consumers approach GMO foods, and what laws are made when it comes to labeling and approving GMO foods is crucial if you're an investor in one of the Big Four GMO companies.