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Chela Vazquez, Senior Program Associate
Institute for Agriculture and Trade Policy

August 2002

The United States is the world’s largest wheat exporter.[1] Since 1998, eight countries have absorbed about 70% of the US export wheat market: Egypt, Japan, the European Union (EU), Mexico, Nigeria, the Philippines, the Republic of Korea, and Taiwan. Total wheat sales for 2001-2002 totaled 24,135,300 metric tons, a 6.5% drop from the previous year (25,819,300 metric tons). Wheat exports have consisted of high yielding non-genetically modified (GM) varieties. However, Monsanto’s development and field testing of GM hard red spring (HRS) wheat[2] is raising questions among US wheat farmers: How will GM wheat fare in the global marketplace?

In spite of increasing global trade, the US share of the wheat global market has eroded in the last two decades due to increasing competition from other world wheat suppliers. In 1981, total US wheat exports peaked at more than 48,000 metric tons with a 45% share of total global exports. In recent years, US wheat exports have averaged less than 30,000 metric tons. This trend will likely worsen if US wheat is genetically modified.

Table 1. Hard Red Spring (HRS) wheat export sales (2001-2002) and US total wheat sales (1998-2002) in units of 1000 metric tons. The marketing year for wheat closes on May 31.




All wheat:

All wheat:

All wheat:

All wheat:













E. U.


















Rep. of Korea































GM organisms (GMOs) are developed using recombinant DNA, also called “genetically engineered” (GE) techniques, which consist in inserting a section of DNA from a donor into a recipient organism – often of different species. The EU has a moratorium on the approval of new GM products. Japan, South Korea, and Taiwan have labeling regulations on GMOs. Other countries are reviewing food safety legislation. Consumers in several wheat-importing countries strongly oppose GM food because of concern of its unknown long-term effects on humans, animals, and the environment.


HRS wheat accounts for about 25% of US wheat production and about 23% of total US wheat export sales. More than 50% of US HRS wheat is grown in Central and Eastern North Dakota and the rest primarily in Montana, South Dakota, and Minnesota. It is also grown in the Canadian provinces of Manitoba, Saskatchewan, and Alberta. It contains the highest protein level of all wheat, which makes it excellent for bread.

Monsanto Company (a US based seed company) is genetically engineering HRS wheat to tolerate its proprietary brand of Roundup herbicide, enabling higher application levels of the chemical without killing the crop. Monsanto in collaboration with scientists in land grant universities are conducting field trials of GM HRS wheat in the United States, as well as in Canada and other countries. Monsanto has recently announced plans to ask the governments of the US, Canada and Japan for regulatory approval of its Round Ready GE wheat.

Farmers fear that field release of GM wheat will contaminate conventional and organic wheat and effectively eliminate HRS wheat markets. Farmers and consumers from North Dakota have proposed a bill for a moratorium on the introduction of GM wheat in the state, and similar legislation in other states may follow.

The Canadian Wheat Board has requested that the Canadian government not approve the registration of GM wheat unless it is broadly accepted by customers, and that approval of new GM varieties be postponed until a segregation system is developed throughout the production, handling, and transportation chain.

HRS wheat growers have reason for concern because many of the countries that block imports of GMOs or have tough GMO legislation are large HRS wheat importers.



Japan is the largest importer of US HRS wheat absorbing about 24% of this export market. It is also the second largest importer of total US wheat, absorbing about 12% of the US export wheat market (Table 1). In the 2001-2002 marketing year HRS wheat purchased by Japan made up 46% of its total wheat purchases from the US. Although more than half of Japan’s wheat purchases are from the US, it also buys wheat from Australia and Canada.

Nearly 100% of Japan’s wheat imports are made by the government through a Food Agency office in the Ministry of Agriculture, Forestry and Fisheries (MAFF). The agency publishes a list of varieties wanted. Japanese subsidiaries of grain exporting companies present bids that are evaluated against the government’s price ceiling and negotiating terms. Private businesses may import wheat and processed wheat products (cookies, etc.) at high tariffs.

Since the mid-1990’s, Japan has witnessed enormous consumer concern on GMOs. The Ministry of Health, Labour, and Welfare (MHLW) is in charge of food safety while the Ministry of Agriculture, Forestry and Fisheries (MAFF) oversees GMO food labeling under Japan’s agricultural standard law.

On April 1, 2001 a mandatory safety assessment became a requirement for foods and food additives produced by GM techniques before market approval. The food sanitation law No. 232 as amended requires that “when foods are all or part of organisms produced by recombinant DNA techniques, or include organisms produced by recombinant DNA techniques either partially or entirely, such organisms shall undergo examination procedure for safety assessment made by the Ministry for Health and Welfare and shall be announced to the public in the Official Gazette.” (The Official Gazette of Japan is counterpart to the Federal Register of the United States.)

Mandatory labeling of food products containing 5% or more GM ingredients also became effective in Japan on April 1, 2001. Additionally, labels are required on all food products that were not specifically segregated into GM and non-GM supply chains, regardless of the presence or absence of GMOs in the final product.

Unapproved GM products are not allowed in Japan, but the government has approved more than 40 GM food items. Japanese consumers complain that most GM products existing in the US have been authorized in Japan. Also, many consumers are not satisfied with the current 5% tolerance for GM ingredients because it excludes from the labeling requirement highly processed products such as cooking oil and baby food. Consumers claim MAFF is not carrying out sufficient inspections and that MHLW’s safety assessments are based only on companies’ reports while data is not disclosed on grounds they are trade secrets.

In light of the ongoing development of GMO wheat by Monsanto, Japanese representatives have said that Japanese authorities should be consulted before commercial marketing of GM food products is targeted to Japanese consumers. In 2000, when Starlink corn (a GM corn not approved for human consumption in the US) was found in shipments to Japan, the Japanese government requested that all corn undergo clearance at shipping US locations and a strict protocol was established to that effect.

European Union

The EU is the second largest importer of US HRS wheat absorbing about 16% of this export market. It is also the third largest importer of total US wheat, buying about 9% of the US total export wheat market (Table 1). HRS wheat purchased by the EU makes up 41% of its total wheat imports from the US.[3] In the 2001-2002 year the EU imported a record of 9 million tons of wheat, mostly from Ukraine and Russia.

Since 1998 the European Union has maintained a de facto moratorium on the approval of new GM agricultural products. The moratorium resulted from the demand of six governments, led by France, that called for stricter labeling, traceability, and liability rules for GM products. So far, approval of thirteen GM varieties has been delayed in the EU regulatory pipeline, halting some $300 million in US corn exports. Those most directly affected by the current EU GMO moratorium are US corn growers, exporters and the biotechnology industry, notably Monsanto.

On July 3, 2002 the European Parliament (EP) approved legislation for the labeling and traceability of GMOs in both food and animal feed. The EP has proposed a total ban on unapproved GM varieties in shipments of bulk commodities, setting a 0% tolerance for contamination. In bulk shipments purporting to be non-GM varieties, the EP proposal would tolerate up to 0.5% contamination from approved varieties, to accommodate “adventitious” or accidental trace amounts of contamination before requiring labels[4] and shippers must demonstrate that GM traces are truly accidental.

Under the EP proposals, traceability of GMOs would require manufacturers to declare any GM content at each stage of the production process and to label GM foods even if processing has destroyed any trace of genetic modification, as occurs with highly processed corn and soybean oil.

If the GMO legislation is passed[5], these traceability and labeling rules are expected to become effective in late 2003 at the earliest.

US government officials claim that if the labeling and traceability legislation is implemented as proposed, US corn and soybean exports would cease. The US State Department has said that it is working with the EU to modify the labeling and traceability proposals to its liking and win approvals for the import of GM products. Both the US Trade Representative and industry are weighing the potential implications of launching a WTO dispute charging the EU legislation would create an illegal barrier to US trade on grounds there is no scientific basis for regulating GMOs differently from other foods.[6] One concern is that a WTO challenge might not result in a lifting of the moratorium but instead result in a hardening of opposition to biotechnology and to the WTO itself.

In August 2002 the European Community ratified the Cartagena Protocol on Biosafety, a treaty that establishes procedural rules governing the trade of GMOs. One of the treaty’s main requirements is that exporters must gain explicit permission from importer countries before shipping GM organisms like seeds or fish for release into the environment. It also affirms the Precautionary Principle[7] as a basis for denying such permission. Once the Cartagena Protocol enters into force, policymakers will have to balance its provisions with those of the WTO.

The EP proposal for an environmental liability regime is based on the “polluter pays” principle employed in the now moribund “Super Fund” in the US. Under this principle, the polluter is required to pay for the cost of cleaning up damage done to the environment. The Commission's measure would apply to damages to biological diversity and compensate victims (including farmers). The proposed EU directive would establish a European-wide liability regime, but would give national authorities responsibility for its enforcement. The liability provisions are likely to take much longer to become law in the EU than the traceability and labeling regulations.


The Philippines is the third largest importer of US HRS wheat absorbing about 13% of this export market. It is the sixth largest importer of all US wheat, absorbing about 7% of the US total export wheat market (Table 1). HRS wheat purchased by the Philippines in 2001-2002 made up 44% of its total wheat purchases from the US.

The Philippines Food, Drug, and Cosmetic Act (R.A. 3720) provides for food safety measures, standards, and labeling to be implemented by the Bureau of Food and Drugs. A National Committee on Biosafety was created in 2001 to develop guidelines on genetically engineered organisms. The National Committee on Biosafety is an interministerial committee led by the Department of Science and Technology and the Department of Health.

Officially the Philippines does not allow the commercial planting nor consumption of GMO products. However, many Filipinos suspect that corn and soybeans imported from the US contain GMOs, which may have spread into their production system. In 2001, farmers uprooted Bt corn plants from field trials conducted by Monsanto.


Taiwan is the 4th largest buyer of US HRS wheat absorbing 10% of the US HRS wheat export market. It is the 8th largest importer of all US wheat, absorbing 4 % of the US total wheat export market. HRS wheat purchased by Taiwan made up 58% of its total US wheat purchases in 2001-2002.

Monitoring and safety of food for human consumption is under the Bureau of Food Sanitation of the Department of Health. In 2000, under pressure from Taiwanese activist and consumer groups, the Health Department was working on guidelines for labeling GMO foods that would require GMO farm products to meet government safety standards by the end of that year. However due to counter-pressure from domestic food industries, the government decided in December 2000 that it would provide food manufacturers with a grace period of up to four years before requiring products containing biotechnology-enhanced ingredients to be labeled.

Under the new schedule, mandatory labeling on GMO foods is to be implemented in three stages: raw corn and soybean products are to be labeled in 2003; the labeling of processed corn and soybeans products is delayed until 2005.

Once labeling becomes mandatory, Taiwan’s Bureau of Food Sanitation intends to adopt a standard setting a 5% threshold level of GMO material that will be tolerated in products before the GMO label is required.

GM crops are not planted in Taiwan legally.

Republic of Korea

The Republic of Korea is the fifth largest importer of US HRS wheat absorbing 6% of the US HRS wheat export market. It is the seventh largest importer of all US wheat, absorbing about 5% of the US total export wheat market (Table 1). HRS wheat purchased by the Republic of Korea in 2001-2002 made up 28.5% of its total wheat purchases.

The Korean Food and Drug Administration (KFDA) under the Ministry of Health and Welfare (MHW) is in charge of food safety regulations and oversees labeling of GMO processed food. The National Agricultural Products Quality Management Service (NAQS), under the Ministry of Agriculture and Forestry (MAF), oversees labeling of GMO raw agricultural products. On March 28, 2001 the Ministry of Commerce, Industry and Energy enacted legislation regarding GMO transfers between countries and announced plans to establish enforcement regulations.

In 2002 mandatory labeling of GM soybeans, beans sprouts, potatoes and corn became effective, and also applies to processed food and food additives containing GM ingredients. The threshold level below which GMOs do not require labeling is 3%.

The Ministry of Agriculture and Forestry (MAF) admitted on February 19, 2001 that probably 33% of imported corn ( 2,762 thousand metric tons) and 57% of imported beans (1,400 thousand metric tons) from the US contained GMOs.

The Republic of Korea does not allow the planting of GM crops.


Mexico’s purchases of HRS wheat are just 2% of total US HRS wheat exports. It is the fourth largest importer of all US wheat, comprising about 9% of the US export wheat market (Table 1). Mexico’s wheat purchases from the United States have been on the rise, with about a 16% increase since 1998.

In 1999 an Interministerial Commission on Biosafety and Genetically Modified Organisms, CIBIOGEM, was created to oversee the import/export, testing, and release of GMOs. The Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) issues certificates for the importation, movement and release of GMOs and ensures compliance with biosafety regulations during field trials. The Secretariat of Health is responsible for developing and enforcing safety regulations on food for human consumption.

In late 2000, the Mexican Senate approved mandatory labeling of GM products as part of a general health code. The bill would require that GM food carry a label stating “transgenic food” and that food containing GM ingredients be labeled as “food made with transgenic products.” However, a powerful consortium of biotechnology companies, AgroBIO Mexico A.C., opposed the legislation and in February 2001, twenty US agribusiness organizations requested the US Trade Representative ask Mexico not to implement mandatory labeling of GM foods. To date, the bill has not passed and GM foods in Mexico are not being labeled.

Mexico continued its imports of US corn, even after Starlink corn was recalled from US stores and sold to foreign markets. Recently, the Mexican government disclosed that about 10% of native corn varieties sampled in 22 communities from the states of Oaxaca and Puebla were contaminated with GM corn and an investigation was launched to determine its extent and origin. However, civil society organizations have pointed out that just US$40,000 have been allocated to the effort and charge the government with negligence over the genetic contamination of maize, a traditional symbol of food security in Mexico.

In 2002, the Mexican Senate voted in favor of ratifying the Cartagena Biosafety Protocol to govern trade in GMOs.


Nigeria’s purchases of US HRS wheat comprise less than 1% of US HRS wheat exports. Nigeria is the 5th largest importer of all US wheat absorbing about 8% of the US export wheat market.

The National Agency for Food and Drug Administration and Control (NAFDAC) under the Federal Ministry of Health is the regulatory agency for food safety and inspection. The National Biosafety Committee (NBC) provides technical advice to the government on the assessment of the risks and benefits associated with the production and application of GMOs and other biological materials. The NBC includes representatives from the Ministries of Agriculture, Industry, Environment, Health, Science and Technology, as well as the scientific community and private sector.

The Federal Ministry of Agriculture and Natural Resources in 1994 developed Guidelines on Biosafety for Nigeria, that were revised and recently approved by the National Executive Council (cabinet). The guidelines include regulations for the introduction and handling of GMOs and would complement a substantive bill being prepared for the consideration of the national assembly.

Nigeria also is a signatory to the Cartagena Protocol on Biosafety.


Egypt purchases less than 0.5% of US HRS wheat exports although it is the largest net importer of all US wheat absorbing about 16% of the US export wheat market (Table 1). Its main wheat source is the US, with Australia and Canada as secondary sources. Egypt bans all GM products and officials have expressed concern about the development of GM wheat varieties in the US.

Most wheat purchases are made by Egypt’s government, which through its embassies forwards bidding requests to grain companies, evaluates their responses, and places orders. In an effort to keep bread affordable, Egypt’s government buys mostly the cheaper soft wheat varieties; hard wheat varieties are bought by private enterprises such as hotels. If prices are considered too high, the government may cancel imports.

Food safety policies are under the jurisdiction of the Ministry of Health (MOH), Ministry of Agriculture and Land Reclamation (MALR), and the Ministry of Industry (MOI). Implementation of biosafety guidelines on GM plants is the responsibility of the National Biosafety Committee (NBC) and the Supreme Committee for Food Safety (SSCFS), comprised of an inter-ministerial committee and a range of experts. The NBC and SSCFS oversee approvals for seed destined for planting only, and not imported commodity grain. The Variety Registration Committee (VCR) oversees the registration and release of seeds.

Egypt’s Ministerial Decree (MOH) N 242/1997 officially prohibits the entry into Egypt of GM food. In practice, however, food from GM plants is imported if the importer provides two documents: certification of safety from a foreign governmental agency and documentation of the product’s commercial status in the country of origin. This practice is based on a recommendation of the SSCFS.

A recent food safety assessment prepared by Egypt’s Agricultural Policy Reform Program of MALR may lead to weaker biosafety regulations to allow the marketing of GM plants for feed and food.


While Monsanto is seeking governmental approvals of HRS wheat engineered to tolerate Roundup herbicide, other wheat varieties are also being developed to resist its proprietary chemical Roundup.

Several land grant universities are conducting studies on scab resistant wheat[8] under the auspices of biotech companies. Two years ago wheat breeders from North Dakota State University bred a Fusarium-resistant variety from China with HRS wheat and produced “alsen,” a scab-tolerant HRS wheat which is now widely planted in Central and Eastern North Dakota and Western Minnesota.

Another GM wheat trait under research in US Department of Agriculture (USDA) labs would alter protein quality to give dough more elasticity in longer mixing periods. Powdery mildew resistant wheat is undergoing research in Europe. Barley yellow dwarf virus (BYDU) resistant wheat is under research in Australia.

Some HRS wheat farmers say that a GM Fusarium-resistant wheat is not necessary to address a problem that has already being solved using traditional breeding methods. Many agricultural ecologists contend that crop diseases have increased under modern agriculture because of intensive cropping and the monoculture system that lacks the added benefit of associated crops and weeds on which pests can spread. Other traditional agricultural practices that minimize pest incidence have also been abandoned in modern intensive agriculture.


For many US farmers, wheat is their most valuable export crop and source of income. Now Monsanto with several universities has developed GM HRS wheat, a Roundup herbicide-tolerant variety. For the US farmer, this raises significant questions: Will GM wheat accelerate the erosion of the wheat market? How will GM wheat be received in countries with tough GMO regulations? Will HRS wheat markets be lost for good?

Also, there are fears that GM wheat in the field will cross pollinate with non-GM wheat varieties catapulting the demise of both conventional and organic wheat destined for foreign markets. Organic canola was not produced this year in North Dakota and Western Canada because it could not be guaranteed as GM-free.

In conclusion, US wheat farmers have strong reasons to question the introduction of GM wheat in their fields.


BBC News, July 3, 2002

Food Chemical News Daily, Vol. 43, No. 27, August 20, 2001

Food Chemical News Daily, Vol. 4, No. 169, March 6, 2002

Food Chemical News Daily, Vol. 44, No. 21, July 8, 2002

Inside US Trade, February 2002

Inside US Trade, March 2002

Inside US Trade, June 18, 2002

Inside US Trade, June 28, 2002

Inside US Trade, July 12, 2002

International Environment Reporter, Vol. 24 No. 25, December 5, 2001

International Environment Reporter, Vol. 25 No. 05, February 27, 2002

International Environment Reporter, Vol. 25 No. 08, April 10, 2002

International Environment Reporter, Vol. 25 No. 09, April 24, 2002

International Environment Reporter, Vol. 25 No. 13, June 19, 2002

International Environment Reporter, Vol. 25 No. 14, page 644, July 3, 2002
International Environment Reporter, Vol. 25 No. 15, page 686, July 17, 2002



















Reuters News Service, January 28, 2002

Reuters News Service, March 8, 2002

Reuters News Service, June 21, 2002

Reuters News Service, June 26, 2002


Thanks to Cynthia Chin from Consumers' Foundation in Taiwan, Claire Deveaux from the Five Year Freeze in the United Kingdom, Malou Edano from the University of the Philippines, Mika Iba from the National Coalition for Safe Food and the Environment of Japan, Stephen Jones from Washington State University, Todd Leake from the Dakota Resource Council, Hyesook Lee from Citizens' Alliance from Consumer Protection of Korea (CACPK), Kent Nnadozie from the Environmental Law Foundation of Nigeria, Gichinga Ndirangu from the International Food Rights Campaign of Kenya, Geert Ritsema from Friends of the Earth of Europe, Mark Trechock from the Dakota Resource Council, Dave Torgerson from the Minnesota Wheat Association, Alex Wijeratna from Action Aid, Ryan Zinn from Global Exchange, as well as Tess Galati and many others for their contributions to this research.

Chela Vazquez

Institute for Agriculture and Trade Policy

2105 First Avenue South

Minneapolis, Minnesota 55404

Tel: (612) 870-3441

Fax: (612) 870-4846

Email: cvazquez@iatp.org


[1] The United States is among the largest world wheat growers, with output sometimes exceeded only by China, the European Union, and India. The US, along with Canada, Australia, the EU, and Argentina account for over 85% of world wheat exports. About half of US wheat is sold to foreign markets. Wheat is the major food crop (i.e., for humans) grown in the United States. There is a strong internal demand for US wheat products. Among US field crops, wheat ranks third in acreage and revenue after corn and soybeans. Since its peak in 1981, acreage under wheat has decreased about a third (26 million acres) mostly in favor of corn and soybeans that are more profitable, and also due to foreign competition.

[2] The hundreds of wheat varieties grown in the US fall into six classes: hard (HRW) and soft red winter (SRW) wheat, hard (HWW) and soft white winter (SWW) wheat, hard red spring (HRS) wheat, and Durum (also a spring wheat). Winter wheat varieties account for about 70 to 80% of US production. They are planted in the fall and harvested in the spring or summer, while spring wheat is planted in the spring and harvested in late summer or early fall. Hard wheat varieties are high in protein, make excellent bread, and sell for higher prices, whereas soft wheat varieties are low in protein, are used for pastry, pretzels, and sell for less. HRW wheat is the largest class grown and the dominant in US exports. Durum wheat used to make semolina flour pasta, has the lowest export volume.

[3] Of all the EU’s wheat imports from the US, about 93% were bought by three countries: Italy (54%), Spain (30%), and the United Kingdom (UK) (9 %). Also, Italy, Spain and the UK were the largest buyers of US HRS wheat, with Italy absorbing 49% of the EU HRS wheat imports. The EU also buys about 10% of all US SRW exports (of which 90% is purchased by Spain and the rest by Italy), and about 66% of all US Durum exports (of which 91% is purchased by Italy).

[4] Current EU legislation requires mandatory labeling for food products that contain more than 1% of approved GM material or proteins derived from it.

[5] In the EU, legislation must be approved by the European Parliament and the Council of Ministers representing the 15 EU member states before it becomes law. Environmental ministers will decide on a common position on these bills in late 2002.

[6] The WTO Agreement on Sanitary and Phytosanitary Standards states that countries may have national food safety regulations "only to the extent necessary" for the protection of human, animal or plant life and they must be based on "scientific principles" and not maintained "without sufficient scientific evidence." Where such evidence is insufficient, they may "provisionally" adopt regulations based on "available pertinent information" while seeking information "for a more objective assessment of risk" and a subsequent review. A government wishing to defend more stringent regulation bears the burden of proving that the regulation is both necessary and scientific.

[7] The Cartagena Protocol on Biosafety states, “Lack of scientific certainty due to insufficient relevant scientific information and knowledge regarding the extent of the potential adverse effects of a living modified organism on the conservation and sustainable use of biological diversity in the Party of import, taking also into account risks to human health, shall not prevent that Party from taking a decision, as appropriate, with regard to the import of that living modified organism intended for direct use as food or feed, or for processing, in order to avoid or minimize such potential adverse effects.”

[8] Fusarium head blight (FHB) or wheat scab is a fungus disease, that thrives under warm wet conditions such as the continental US summer weather experienced in some states. FHB causes yield and quality losses, and may produce mycotoxins that are toxic for animals and humans. Fusarium spores are almost everywhere and attack small grain crops.

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