Greenpeace Reveals Costs of Genetically Engineered Rice Scandal May Exceed $1.2 Billion

Media release - November 6, 2007

A Greenpeace-commissioned independent report has revealed that the costs of the 2006 genetically engineered rice contamination scandal in the United States involving Bayer CropScience may exceed $1.2 billion. The contamination arose from experimental field trials of rice variety LL601, produced by Bayer, in the U.S., which had ended in 2001. The discovery triggered the largest financial and marketing disaster in the history of the U.S. rice industry. At least 30 countries were affected by the contamination and many closed their markets to U.S. rice, including major importers such as the European Union and the Philippines.

"The exorbitant cost of this contamination scandal should be a warning to any industry thinking of venturing down the GE route," said Dr. Doreen Stabinsky, Greenpeace genetic engineering campaigner. "It is clear that GE crops, even field trials, are a high risk, and pose a threat to every link in the conventional food production chain. Banning crop trials and cultivation of GE rice is the only way to prevent a recurrence of such a disaster."

The Greenpeace report, "Risky Business: Economic and Regulatory Impacts From the Unintended Release of Genetically Engineered Rice Varieties Into the Rice Merchandising System of the U.S.," is the first quantification of the costs of the Bayer GE rice contamination scandal. Rice growers, harvesters, processors, millers and retailers were impacted by the scandal which affected 63 percent of U.S. rice exports. The overall cost to the industry, estimated at over $1.2 billion, including losses of up to $253 million from food product recalls alone. Future export losses amount to $445 million.

Hundreds of U.S. farmers and European businesses have filed lawsuits against Bayer

in attempts to recoup their losses. Punitive or statutory damages, which may be awarded against Bayer, may double or even triple the final cost of the GE contamination incident. GE rice field trials have just been approved in India, where markets for both basmati and non-basmati rice could be threatened. Developing nations, such as India and Thailand, the two largest rice exporters, are closely watching the development of the U.S. scandal.

"Who will compensate India's farmers and millers if the Indian rice industry suffers a catastrophe on the scale of what happened here in the U.S.?" asked Stabinsky. "Bayer has blamed the contamination on an 'Act of God' and the U.S. government has been unable to find what caused it despite a 14-month investigation. There is only one way for the rice industry to protect itself from another billion dollar debacle and that is to prevent GE rice from ever being grown," she concluded.

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