Tainted Rice Leaves a Painful Legacy

by Mark Friedman  on Monday, Aug. 31, 2009 12:00 am  

Ray Vester, who has been farming east of Stuttgart for more than 40 years, is one of the farmers whose fortunes were affected by the discovery of genetically altered rice in U.S. crops in 2006.

Cummings said the federation was trying to get the EU to lift the ban on the tests because of the success of the documentation and the "very, very low levels of presence that are showing up" in the 2007 and 2008 crops.

One fear is that the U.S. rice has been out of the market for so long that it will be hard to win customers back. "It's going to be a challenge to get back into the market," Cummings said.

Once it's easier for rice to be sold in the EU, Cummings said, the federation would launch an advertising campaign and work with the wholesalers and retailers to "re-establish the U.S. presence."

Trouble Develops
2006 was gearing up to be a good year for rice producers.

"About every 10 years, you'd have a really good surge in prices where farmers could kind of reload financially and carry them into that next surge," said Ray Vester, who has been farming for more than 40 years just east of Stuttgart.

Other farm commodity prices were rising and rice prices also should have increased, he said.

Price estimates for the 2006-2007 season were on target for $13 per 100 pounds of rice compared with the $10 per 100 pounds it had been, according to a December 2007 report by Colin Carter, a professor of agricultural and resource economics at the University of California at Davis. He did the report for plaintiffs' attorneys, and it is filed in one of the lawsuits against Bayer in U.S. District Court in Missouri.

But the momentum for rice changed on Aug. 18, 2006. The Department of Agriculture said trace amounts of LLRICE 601, a genetically modified rice strain, had found its way into the rice supply, according to court documents filed in the case against Bayer CropScience. At the time, LL601 was illegal in the United States. In November 2006, however, the USDA's Animal & Plant Health Inspection Service deregulated the genetically engineered variety of long-grain rice.

"The Aug. 18, 2006, event hit the market like a big lead weight and suddenly changed the market dynamics and sent the rice futures down sharply," Carter wrote.

Within days of the announcement, the EU said it needed proof that the U.S. rice was 100 percent free of genetically modified rice. Other countries also put limits on U.S. rice.

The news hit just as the 2006 U.S. long-grain rice harvest was starting, hurting the entire sale of the crop and of the rice in storage at the time, Carter wrote.

U.S. long-grain rice exports declined by about 20 percent from August 2006 through July 2007, compared with the same period a year earlier, Carter wrote.



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