Wheat is a critical staple crop, supplying much of the world's dietary protein. In 2007 world production was 607m tonnes, making it the third most-produced cereal after maize and rice. The grain is used to make breads, biscuits, cakes, breakfast cereal, pasta, noodles, and couscous, and for fermentation to make beer, vodka, and grain alcohol. Up to now, wheat has not benefited from the application of modern genetic engineering that has revolutionised the farming of maize, cotton, canola and soy. But that is about to change.

By 2004, Monsanto, the world's leader in the production of seeds for genetically-engineered crops, had made substantial progress in the development of genetically-engineered wheat varieties for North America. But suddenly in that year, the company scrapped its wheat programme, in part because of opposition from North American grain merchants and growers, as well as concerns that some major foreign importers would reject imports of all American wheat because they could be "contaminated" with genetically engineered varieties. European countries and Japan, which have traditionally imported about 45% of US wheat exports, have been resistant to genetically engineered crops and food derived from them.

In addition, food manufacturers doubted that the introduction of genetically engineered wheat would lead to a significant improvement in their profits because the cost of wheat is typically only a small fraction of inputs for most processed food products, and food processors were afraid of losing market share if environmental and consumer activists were to organise boycotts of food products containing "biotech" wheat. For the last 25 years, activists have opposed agricultural biotechnology, in spite of proven environmental, humanitarian and economic successes.

Monsanto's abdication gave competitors outside the US the opportunity to become the first to adopt new technologies for genetically improved and lower cost wheat, relinquishing what could have been a first-mover advantage – the privileged position of the initial occupant of a market segment.

However, American growers and millers have had a change of mind. In 2006, a coalition of US wheat industry organisations called for access to genetically-engineered wheat varieties with enhanced traits, and a survey released in February 2009 by the US national association of wheat growers found that more than three-quarters of US farmers wanted access to genetically engineered varieties with resistance to pests, disease, drought and frost. Such varieties are important as plant scientists and farmers continue to battle diseases such as leaf rust, the world's most common wheat disease, which can lead to yield loss of up to 20%. In Kansas, the heart of the US wheat belt, for example, leaf rust is the most significant pest, in 2007, it destroyed a shocking 14% of the wheat crop.

American growers, caught in the middle between the inclinations of some of their largest customers and the developers of new wheat varieties, lost out on substantial benefits when Monsanto opted not to follow through with creating genetically-engineered wheat. This left the field (literally and figuratively) to countries such as Australia and China, which are now ahead in their research and field trials of genetically-engineered wheat. For example, the German plant science and chemical company Bayer and Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) are collaborating to develop wheat varieties with higher yield, more efficient nutrient use and greater tolerance against drought.

These developments are important for several reasons. Wheat farming is a struggling industry in the US, in large part because it has not received the technological boost from recombinant DNA technology that has benefited the corn and soybean industries. US wheat acreage is down by about one-third from its peak in the early 1980s, due to reduced profitability compared with alternative crops – in spite of the price of a bag of wheat flour having soared from $10 to a peak of $36 during the past 36 months. As a result, the US's position as a leading wheat exporter has declined over several decades, from a high of 50% of world exports in 1973-74 to only around 20% currently.

Five years after letting their biotech wheat research program wither, Monsanto recently revealed plans to resurrect it. The agribusiness company not only announced in July 2009 that it would resume development of genetically engineered wheat varieties, it also further demonstrated its commitment by buying WestBred, a Montana-based wheat-breeding company that specialises in wheat germplasm, the plant's genetic material.

Greater productivity in wheat farming achieved with improved varieties would confer an important environmental dividend: wheat is the largest crop in the world in terms of area cultivated (220m hectares) and is the second largest irrigated crop (each bushel produced requires 11,000 gallons of water on average), so enhanced productivity would conserve both farmland and water. (A more direct approach is being taken by scientists at Egypt's Agricultural Genetic Engineering Research Institute, who have performed at least five years of field trials of drought- and salt-tolerant wheat created by transferring genes from barley into a local wheat variety.)

Monsanto's volte-face reflects the company's assessment that the various relevant factors – technology, business, public policy and customer acceptance – had now become favourable, and was spurred by the world food crisis that saw a tripling of the price of wheat and certain other food crops during 2008. But it will likely take at least eight years until the first varieties of Monsanto's genetically-engineered wheat could be commercialised in the United States.

Monsanto and the US wheat industry may already have been relegated to the position of second mover, and whoever wins the race to get desirable genetically engineered wheat varieties to the marketplace will enjoy a strong cost advantage and attract market share in many importing countries.

Henry Miller is a fellow at the Hoover Institution and the author of The Frankenfood Myth. Colin Carter is professor of agricultural and resource economics at the University of California at Davis

Source:

Henry Miller and Colin Carter (19.12.09). GM wheat is on its way. Five years after scrapping its trials, Monsanto calculates that the time is now ripe for GM wheat to make a comeback. The Guardian (http://www.guardian.co.uk/commentisfree/cifamerica/2009/dec/19/gm-wheat-monsanto - start-of-comments.)

Reproduced by permission of Dr. Miller

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