USDA says US corn exports hurt by StarLink chaos

WASHINGTON (Reuters) -- U.S. corn exports are being hurt by concerns overseas that shipments may be contaminated with an unapproved variety of biotech corn, U.S. Agriculture Secretary Dan Glickman said Thursday.

Glickman's comments marked the first public acknowledgment by the USDA that StarLink bio-corn -- a variety found in taco shells and chips in late September -- is hitting U.S. corn exports to big buyers like Japan and South Korea.

"I think it has something to play there. I can't quantify the amount," Glickman told reporters after opening a new prairie exhibit at the Smithsonian.

StarLink was approved by U.S. regulators in 1998 only for animal feed after scientists were unable to determine if the gene-spliced corn might cause rashes, diarrhea, respiratory problems or other allergic reactions in humans.

But the corn, made by France and Germany's Aventis SA, accidentally got into other yellow corn this year and triggered a recent recall of some 300 brands of taco shells, chips and other U.S. foods.

Earlier Thursday, the USDA issued a weekly report showing U.S. corn exports were 39 percent below the four-week average. For the latest week, U.S. corn exports were 517,700 tons, far below market expectations of 550,000 to 750,000 tons.

Japan, the single biggest buyer of U.S. corn, has virtually halted its purchases for the first quarter of 2001 because of fear that some StarLink corn may taint supplies. Japan has stricter rules about biotech crops and does not allow StarLink even in livestock feed.

"We have worked hard on the Japan issue and are working on (South) Korea now," Glickman said, referring to South Korea's similar concerns about buying U.S. corn.

Earlier this week, South Korea said it would not consider buying more U.S. supplies at this time due to StarLink worries.

Glickman declined to comment on whether the USDA might be forced to trim its forecast of 2.275 billion bushels of overall U.S. corn export sales this year due to the StarLink controversy.

U.S. grain traders have closely watched the government's corn export data for any sign that the StarLink controversy has slowed sales. Previously, USDA officials maintained that corn sales were not feeling any impact from the StarLink furor.

"It's an issue that has caused concern among some of our importers. That is why we have to work hard to make sure that the company involved (Aventis) does everything they can to get it resolved," Glickman said.

Glickman also said that StarLink maker Aventis could face steep legal and liability costs over the contamination.

"There are possibilities that there are going to be losses out there and somebody is going to have to compensate them," he said. "I would suspect in terms of legal and compensation issues, they are not out of the woods yet."

StarLink was engineered to contain a gene that protects young corn plants from destructive pests.

Glickman declined to say how much StarLink has been gathered from U.S. farmers so far. Under USDA supervision, Aventis launched a buyback of as much of this year's harvest as possible.

Agrochemical and pharmaceuticals firm Aventis has said it expected to pay about $100 million to repurchase the 2000 crop. Some industry experts have speculated that figure could go much higher if food companies, grain elevators and other entities in the food supply chain demanded compensation from Aventis.

Aventis said Wednesday it planned to sell its agricultural chemicals and seeds business to focus on its faster-growing drugs operations.

Two weeks ago, the USDA said it had collected about 90 percent of the StarLink harvest but could not yet account for about 1.2 million bushels of the corn.

"That's why we are working so hard to get the StarLink corn out of inventory," he said.

The Environmental Protection Agency, under pressure from Aventis as well as anti-biotech activists, has scheduled a Nov. 28 public meeting to consider whether StarLink poses a health risk for humans.

Aventis submitted new data to the EPA, which it contends rules out any allergic reactions to the corn. But green groups say regulators should not be rushed into granting a temporary approval for StarLink in human food simply to limit Aventis' legal liability.

Glickman said the incident with StarLink shows the government needs to take a close look at existing regulations for bio-foods.

The USDA is responsible for field trials of new bio-crops, while the EPA has authority over plants that are genetically engineered to act as pesticides. The Food and Drug Administration is responsible for broad food safety and labeling issues.

"We have to look at our regulatory system, that it is adequate to deal with these types of problems," he added. "We can't let it happen again."

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

What the experts say about StarLink and allergens
November 10, 2000
EPA says biotech corn recommendation due by next month
November 8, 2000
Scope of biotech corn product recall revealed
November 1, 2000
Clinton administration announces new oversight of biotech foods
May 3, 2000

National Food Processors Association
Aventis CropScience

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.