By Carey Gillam | December 29, 2005

KANSAS CITY, Missouri (Reuters) - When Monsanto Co. introduced the world to genetically modified crops a decade ago, the biotech advancement was heralded as the dawn of a new era that could reduce world hunger, help the environment and bolster struggling farmers.

Now, biotech beans, cotton, corn and canola are profit-drivers at Monsanto and are lifting the fortunes of rival companies like Swiss-based Syngenta and Dow AgroSciences LLC, a unit of Dow Chemical Co.. The gains are largely due to broad U.S. acceptance of crops that have been genetically altered to withstand weedkillers and insects, and backers say, generate higher yields.

But as the industry celebrates its 10th anniversary, the early promises of biotech crops remain largely unrealized, and many countries have banned the technology amid concerns about potential danger for human health and the environment.

"GM products have not lived up to those early exaggerated expectations," said Joel Cohen, senior research fellow at the International Food Policy Research Institute. "We now have a series of very dependable, reliable crops using this technology. But there is still a large precautionary perspective."

ONE STEP FORWARD...

Indeed, for nearly every step forward, there is a step back. Earlier this month, cereal giant Kellogg Co.. announced it would start using a healthy low linolenic oil derived only from Monsanto's biotech soybean in its cookies, crackers and other food products.

But less than two weeks later, rival Kraft Foods, the world's second-largest food producer, said it would stop supplying all genetically engineered food products, including additives, to China due to a lack of market acceptance. Pepsico and Coca-Cola Co. have made similar pledges.

There have been other recent setbacks, including a decision in November by Swiss voters to ban planting of biotech crops for five years, and the recent revelation in Australia that a biotech pea caused health problems in research mice, forcing cancellation of that project.

Last year Monsanto was forced to withdraw a biotech wheat it planned to sell in the United States and Canada because of strong market opposition. Other failed projects include Monsanto's delayed-ripening tomato and a healthier potato.

"Genetic engineering has not delivered on any of its promises for human health benefits," said Margaret Mellon, director of the Agriculture and Biotechnology Program at the Union of Concerned Scientists. "There are a lot of failures scattered at the side of the road."

Other critics say biotech crops have created more problems than they've solved, creating herbicide-resistant weeds, for instance.

Backers say biotech crops are good for the environment because the can reduce the amount of chemicals needed to grow healthy crops, but opponents say chemical use many times increases because of weed resistance and other problems.

And they say that farmer profits tied to better yields get eaten up by the higher prices they pay for biotech seeds. And critics say biotech has not eased hunger because many poor countries are unable or unwilling to adopt the technology.

GENIE OUT OF THE BOTTLE

Still, acreage planted with biotech crops around the world is increasing and this year topped more than 1 billion acres sown to soybeans, corn, cotton, canola and other crops.

In the United States, 52 percent of all corn, 79 percent of upland cotton and 87 percent of soybeans planted in 2004-05 were biotech varieties, according to the USDA.

An industry report due in January is expected to show good growth not only in the United States but in many other countries. Barriers in Europe are slowly lowering and new products in the pipeline should help improve acceptance, biotech backers say.

"We're now 10 years into it, on a billion acres in 17 countries," said Dow AgroSciences vice president of plant genetics Pete Siggelko. "There will be some continuing bumps in the road, but we are starting to see a balance of very good news and growth. The genie is way out of the bottle."

Cotton, corn, soybeans and canola, all first rolled out in the 1995/1996 growing seasons, remain the top biotech crops but the future should bring new crops, biotech backers say.

Iran last year became the first country to commercialize biotech rice, approving a pest-resistant variety.

And Syngenta this year announced a new strain of "golden rice" that produces up to 23 times as much beta-carotene as previous varieties. The rice is to be available for free to research centers across Asia.

Michael Fernandez, executive director of the Pew Initiative on Food and Biotechnology, said there is currently "enormous investment" in agricultural biotechnology in China, Argentina, Chile and other countries, and genetically modified rice was likely to gain approval in China in the near future, a move that could shift acceptance globally in favor of biotech food.

"We haven't seen anything that has been dramatically new in awhile," Fernandez said. "But I think we're starting to see signs of more movement forward."

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