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You would think the decision would have been a minor blip on the food-industry radar screen. After all, Plano-based Frito-Lay, the huge snack-food unit of PepsiCo Inc., uses just 1.2 billion pounds of corn, or about one quarter of 1 percent of total U.S. corn production, for its snack chips. But when Frito-Lay announced in late January that it was asking corn suppliers to stop using genetically modified corn, it sent ripples throughout the U.S. food industry, generating fear the decision might spark a "Frankenfood" frenzy like the one currently gripping Europe.
"Consumers are confused," says Frito-Lay spokeswoman Lynn Markley, explaining the company's decision. "It's in the media every day. There's a lot of information out there. We want to step aside, sit on the sidelines, wait and see where the industry goes, see where the consumer confusion falls out."
The seed of that confusion is a little kernel known as Bt corn, a variety genetically engineered to manufacture its own pesticide. Markley admits Frito-Lay's decision wasn't based on any scientific evidence that the corn is linked to any environmental harm, a fact that irritates farmers and some scientists.
"From a scientist's perspective, it's somewhat distressing to see industry adopt positions that are not based on good scientific data," says John Mullet, director of the crop biotechnology center at Texas A&M University. "Moves by companies like Frito-Lay may send a message to consumers and others that these products are somehow unsafe, and may prevent the deployment of lots of other engineered products that will benefit human health."
Farmers are even more agitated. They fear Frito-Lay's decision will tilt U.S public opinion toward the virulently anti-biotech sentiments sweeping Europe, where protests by groups such as Greenpeace include the destruction of fields planted with genetically modified crops. These groups and some European officials contend that genetically modified products threaten public health and the environment.
"We're a little disappointed that they've arrived at this decision," says Joe Fields of the American Farm Bureau Federation. "What these companies are saying is, 'Well, what happens if we don't take a GM product?' The answer is nothing. What happens if we do? All kinds of trouble from Greenpeace and you name it."
Frito-Lay's decision comes on the heels of other significant corporate food-industry moves away from genetically modified foods over the past year. Not surprisingly, natural-foods retailers such as Whole Foods Market and Wild Oats Markets issued demands that manufacturers of their private-label food products stop using modified ingredients.
Recently, big corporations have been spooked onto the bandwagon. Last summer, agribusiness behemoth Archer Daniels Midland Co. advised its suppliers to start segregating their genetically modified crops from conventional ones because of pressure from foreign buyers. The European Union and other countries now require labels on foods containing biotech ingredients. Last July, Heinz and Gerber succumbed to pressure from Greenpeace and announced they would begin making their baby foods free of genetically modified ingredients.
These moves threaten to rattle farmers and agribusinesses that have a huge economic stake in biotechnology. According to the U.S. Department of Agriculture, American farmers have embraced genetically modified crops with vigor since they were first introduced commercially in 1995. They appear to have bought into lofty promises of higher yields, effective pest-fighting capabilities, and a means to significantly cut down on the use of expensive pesticides and herbicides.
Roughly a third of all corn and close to half of all soybean and cotton acreage in the United States is planted with genetically modified crops. "I can tell you that farmers are really hooked on [biotechnology]," Fields says. "They really like it because it means less activity in the field and a better crop. But farmers are in a quandary right now as to whether they're going to have a market for which kind of crop."
Indeed they are. U.S. farmers reportedly lost hundreds of millions of dollars last year in corn sales to Europe alone. A Reuters straw poll in early January shows that farmers are cutting back sharply on their plantings of genetically modified soybeans, corn, and cotton.
This pleases Greenpeace USA's Charles Margulis. "The impact is that American farmers are going to realize that increasingly there's no market for GM products," he says. Ronnie Cummins, national director of the Organic Consumers Association, echoes this sentiment. He says Frito-Lay is among a roster of companies he calls the "Frankenfoods 15," a group his organization is targeting for consumer opposition. The list includes Hershey's, McDonald's, Safeway, and Starbucks.
Environmentalists and others contend that modified crops have a host of potential environmental and health hazards that include damage to soil, destruction of beneficial insects, creation of "superweeds" and "superpests" resistant to pesticides, and a rash of allergic reactions and antibiotic resistance from altered genes. Trouble is, they cite precious few conclusive studies to support their assertions. Indeed, some say the real opposition to genetically modified foods in Europe is driven not by credible scientific concerns but by the protectionist politics of heavily subsidized European farmers who fear the efficiency and productivity of American biotech agriculture. European food scares surrounding mad cow disease and dioxin-tainted chicken don't hurt European skepticism either. "We worry about activist groups that are trying to block this technology because of their particular political positions," Mullet says.
Fields acknowledges that the vast majority of purported biotech benefits falls into the laps of farmers, a fact that makes this technology difficult for consumers to embrace. "Farmers are looking forward to the day when there is a direct consumer benefit from this technology," says Fields. Until that time, Frankenfritos and the dozens of American sequels they might spawn could dog agribusiness.