According to Dwight Roberts, on the afternoon of Aug. 18, “all hell broke loose” when USDA head Mike Johanns announced that trace amounts of GM rice had been found in the U.S supply.
“It will take some time to sort this out,” said the U.S. Rice Producers Association (USRPA) president at the Missouri Rice Research and Demonstration Farm field day outside Glennonville, Mo. “This whole process is generating many rumors and stories. There are a bunch of unanswered questions that we’ve been trying to get answers to… The situation is extremely unfair to farmers. They were finally looking at a good rice price for the first time in many years.”
According to Riceland Foods, the GMO material was discovered by an overseas customer.
“They contacted Riceland wanting an explanation. Riceland retained a portion of the sample and sent some of it to a lab. The lab found the samples tested positive for Bayer’s (LibertyLink) herbicide resistance trait.”
Since there’s no known commercial production of GMO rice, “Riceland says they suspected the material would be identified as residual fragments.”
In May, “Riceland then decided to collect samples from several grain storage locations. I’m told this happened in Missouri, Arkansas and elsewhere. A significant portion of those samples tested positive for the Bayer trait. The positive results, according to Riceland, were geographically dispersed and random throughout the U.S. rice-growing areas.”
In early June, Bayer was contacted about the possible contamination. In late July, the company confirmed the positive results for their trait at .06 percent (about six kernels per 10,000). By law, Bayer was required to report its findings to the USDA within 24 hours.
Following USDA’s announcement, the market reacted negatively.
“On (Aug. 21) the futures market fell 28 cents. (On Aug. 22), it fell the limit. Overnight trading was up a few cents but has since fallen. As of 15 minutes ago (on Aug. 23), November rice was down 7 cents, January was down 3 cents, November 2007 was down 9 cents and May 2007 was down 1 cent. This is not what we wanted to hear.”
For losses on (Aug. 21 and Aug. 22) alone “we calculate farmers lost about $150 million. We feel farmers shouldn’t take the brunt of this.”
On Aug. 22, USRPA representatives met with USDA officials.
“We pushed them, saying, ‘You must get to the bottom of this. It’s fine to say you’re looking out for the consumer and the rice is safe. But we’ve got some important issues from a price standpoint.’
“We told the USDA in a strong tone that they need to answer farmers’ questions. How did it get started? What is the trail? How widespread is it?
“We need those answers so we can put an end to some of the rumors. This must be very clear and transparent.”
There is some good news. Rice remains eligible for the USDA loan program and the Chicago Board of Trade has taken a position that even rice testing positive for the LibertyLink trait is deliverable against futures contracts.
In large measure, USDA wants to treat this as a commercial issue between buyers and sellers, said Roberts.
“We disagree with that. We want nothing that could be seen as self-serving. We must show the public and foreign buyers that we’re dealing properly with this.”
The European Union says it will allow U.S. rice imports (270,000 tons to 300,000 tons annually) to continue as long as a rigorous testing mechanism is in place. While tests have now been approved for finding the offending trait, Roberts says farmers shouldn’t be saddled with the cost.
“Not just anyone can test for this. DNA testing is sophisticated and expensive. Farmers shouldn’t be hit with a test that costs $200, or more.”
And there are many other questions.
“We have a harvest coming. Will every truck be tested? Will loads be segregated? Will this blow over now and then explode later on? Why wasn’t the material destroyed way back?”
Bayer, said Roberts, “must accept responsibility for this. They need to work with farmers to make it right. Congress and policymakers should think the same way. This must be corrected quickly. It can’t be allowed to (fester).
“There is no good news with this. The mere mention of this last Friday launched a negative perception. And, in the rice markets, perception is everything.”