AN AMBER LIGHT FOR AGRI-BUSINESS

1. Jose Alencar, Brazil's vice-president, was feeling sorry for himself last week . His boss, Luiz Inacio Lula da Silva, was abroad, lecturing George Bush at the un and visiting Fidel Castro in Cuba. That left Mr Alencar as the "poor wretch" with the unpleasant task of signing a decree that for the first time allows the planting of genetically engineered crops in Brazil.

2. The vice-president was caught between two juggernauts. One is an alliance of activists and politicians who regard biotechnology as a dangerous novelty foisted on Brazil by malign multinational companies. Many are close to President da Silva's Workers' Party, which dominates the government. The other is Brazil's increasingly powerful agri-business lobby, which sees biotech as a competitive tool. However, the decree - which allows the planting and sale this year of a herbicide-resistant variety of soyabean developed by Monsanto, an American company - is a victory for the planters. It will reverberate from the floor of Brazil's Congress to the shelves of European supermarkets.

3. In soyabeans, Brazil is a superpower. Within five years, it could become the world's biggest producer, reckons the United States' Department of Agriculture. Soya products already account for about 5% of Brazil's total exports. It has achieved this despite banning the use of genetically modified (GM) seed. That has set it apart from the United States, where 80% of the soya is GM, and Argentina, where nearly all of it is. The ban was popular not just with Lula's supporters but also with ordinary Brazilians and biotech-wary consumers in Europe.

4. The waiving of the ban, albeit for only one season, will shock both groups. Lula's traditional supporters are already troubled by his government's orthodox economics. They sense another betrayal. Marilena Lazzarini, head of idec, a consumer-advocacy group, accuses the government of succumbing to "pressure from economic interests". Europeans, accustomed to eating GM-free food without paying much extra for it, may have to choose between their phobias and their wallets.

5. Farmers will cheer. In Rio Grande do Sul, a southern state, farmers have long flouted the ban, planting Monsanto seeds smuggled in from neighbouring Argentina. These require less weed killer and tillage. Brazilians get extra savings because they do not pay royalties to Monsanto for the smuggled seed. The clandestine crop already accounts for 10-20% of Brazil's total. Unbanned, Monsanto guesses that its seeds would account for 70% of soyabean production within a decade.

6. Brazil's treatment of gm crops has bordered on farce. In 1998 its agency for vetting biotechnology approved GM soya. IDEC and others persuaded a court to block the decision. Earlier this year Lula said farmers could sell, just this once, the soya they had harvested. Mr Alencar's decree is another one-off exemption. It applies only to farmers who already have the seed (ie those in Rio Grande do Sul). It, too, is likely to be challenged in court. But the alternative, said the agriculture minister, Roberto Rodrigues, was "civil disobedience". The decree requires farmers using GM seed to register with the government, but lax enforcement means few will.

7. A new law is supposed finally to settle the procedures for approving biotech products. The government has promised to send it to Congress this month, but has already missed deadlines. The pro-biotech Mr Rodrigues, himself a farmer, is tussling with his cautious colleague, Marina Silva, the environment minister, over how tough the procedure should be.

8. Foes of GM farming think they have an irresistible argument: the world does not want it. So say politicians in Parana state, Brazil's second-largest soya producer, where the seeds are conventional. The state governor is pushing a local law that would ban GM soya from the state and close its port to GM crops.

9. Inconveniently for the antis, though, "many Parana farmers want to produce biotech soya," says Carlos Augusto Albuquerque of the local farmers' federation. The important thing is to segregate GM from non-GM varieties, which will be easier if Monsanto soya is legal. If the port is closed, biotech farmers will use others.

10. The reason for Mr Albuquerque's stance can be found in European kitchens. In Britain, where consumers are especially fussy, supermarkets sell pork and chicken raised on non-biotech soya for the same price they once charged for Monsanto-fed meat. They can do so in part because Brazilian farmers, the main source of non-GM soya, are paid little extra for it.

11. If Brazil shifts largely to biotech soya, non-GM farmers may at last gain the leverage to extract something more than the derisory premium they are accustomed to. For Europeans, that will come on top of the costs of complying with new regulations, which are about to mandate labeling of GM animal feed (though not of the meat itself) and an expensive paper trail to certify the purity of non-GM ingredients. If supermarkets pass such costs on, consumers' appetite for GM-free food could wane.

12. Thanks to Mr Alencar's one-year decree, the premium for non-GM soya in Brazil is rising already. The prospect of further gains will tempt Brazil to join the other soya superpowers in allowing the market to determine how much biotech seed to plant. If that happens, it will be Lula, not his vice-president, who takes the heat.

Date: 2016-04-22; view: 708