**Preparing for the Future**

A report prepared by the USDA Advisory Committee

On Biotechnology and 21^st^ Century Agriculture

The USDA Advisory Committee on Biotechnology and 21^st^ Century
Agriculture (AC21) has been charged with helping USDA and the Secretary
of Agriculture understand how biotechnology will change agriculture and
USDA's role over the course of the next decade. This is a daunting task.
Agricultural biotechnology[^1] sits at the crossroads of other debates
on the future of American and world agriculture, on international trade
relations, on biological diversity and the development of international
instruments related to its preservation and exploitation, on the role of
multinational corporations, and on how best to build public confidence
in rapidly emerging technologies in general. And, as all this occurs,
the science continues to advance rapidly.

**Neither the AC21, nor anyone else, can say with certainty what U.S.
agriculture will look like in a decade. But we can try to examine
different scenarios. This does not imply that we are predicting or
endorsing any given scenario,**[^2] **but rather that we are trying to
understand the implications of differing outcomes.**

A range of external forces and factors, some of which can be identified
today, will impact the future of technology adoption. To help understand
the range of possibilities, we have divided our work into two major
components. First, what are the key predetermined factors---the major
driving forces---that will likely have a major impact on shaping the
future? Second, what are the key uncertainties that may push future
outcomes in one direction or another?

**WHAT WE KNOW (OR THINK WE KNOW)**

What are some key drivers likely to influence the next decade,
regardless of other uncertainties?

The AC21 has honed in on the following:

**An increasing world population*, ***especially in poor, non-Western
countries*,* is leading to growing global food and feed needs. World
population is not expected to level off until mid-century. This will
require increased productivity from agricultural lands and could
increase encroachment on non-agricultural lands, especially if
agricultural productivity (e.g. production per acre planted) does not
keep pace with increases in global populations..[^3]

**Regional prosperity leads to increased meat consumption.** As income
in developing countries rises, there has been and will continue to be a
substantial increase in world demand for commodity crops, especially for
animal feed use. India and China are likely to be the key drivers of
additional demand for US agricultural commodities.[^4] Food sufficiency
(or excess) in developed nations will continue to be a major challenge.

**There will be an aging Western population, relative to developing
nations**. This population will continue to exercise significant
purchasing power. Countries will face growing demands on their medical
system. Research and treatment-mitigation-prevention of chronic diseases
will be ever more important. Many products will be launched in the
attempt to maintain the health of this population. Massive Social
Security and health care costs will become a substantial drain on
national budgets, reducing resources for other sectors of the economy.

**Farmers in the US and globally will continue to have broad options and
make planting decisions based on the value of the products produced with
their production systems on their farms.** The cost of production
coupled with commodity prices will drive farmer decisions on crops and
seed varieties.

**Increasing public concern with health and nutrition, and increasing
scrutiny by consumers, especially in developed nations, will drive
change in the food system.** Many people are demanding ever more
information about the food they're eating, stimulated in part by the
wide availability of increasingly sophisticated information
technologies. The combination of escalating interest in information and
technological advancements will result in increasing traceability and
sophisticated, multiple product channels from farm to shelf.

**Faced with growing abundance and increasing variety of food products,
consumers in wealthy countries will be become increasingly selective
about the products they buy.** There will be increasing consumer demands
for convenience, information about ingredients, safety, and methods of
production.

**There will be a trend toward increased consumer interest in, and
awareness of, methods of food production.** Developed country
marketplaces, in particular, will be crowded with production labels,
some of which, like organic, may be based on third-party or government
verification. Consumers will continue to rely on governments and
regulatory agencies to assure the safety of our food and safety of our
crops to the environment.

**The food marketplace will continue to experience rapid changes in
demand based on consumer perceptions of health.** These trends---pro- or
anti-meat, pro- or anti-carbohydrates, will continue to produce big
swings in food choices.

**Global malnutrition and hunger will continue to be a major issue.**
Despite aggregate global food sufficiency, global hunger, malnutrition,
and insecurity will persist, with the most pervasive impact in the
world's poor countries but also among disadvantaged populations in
wealthy countries.

**Obesity will increase in importance as an issue.** In the US over 64%
of males and 62% of females are obese or overweight.[^5] The increasing
trend toward obesity shows little signs of abating, and is one of the
factors driving up the costs of medical care. Concerns about this trend
are focusing attention on current western diets and lifestyle practices,
and may lead to changes in those diets that could lead to changes in
demand for certain foods.

**The trends toward urbanization and agricultural mechanization will
continue.** Fewer people will be involved in producing crops. This trend
is driven by commercial agriculture and encourages standardization and
consolidation.

**Knowledge is driving changes in the economies of all nations.** The
dissemination of technology will continue to create momentum for
innovation. New technologies and the resulting products are being picked
up by scientists and entrepreneurs in countries all over the world (with
or without respect for intellectual property). These new ideas and
capabilities will drive social and economic change within and beyond the
sphere of the industrialized countries. On the individual level, the
advantages of widely available information will be counterbalanced by
the problems of information overload and the unreliability of widely
disseminated information.

**Life sciences research will continue to expand on both the basic and
applied fronts.** Exponential increases in biological information
contained in gene and protein databases will continue, although the rate
of new product deployment based on that information is not likely to
match the exponential rate of information generation over the next
decade. In medicine, genomics data may lead to new disease treatment
strategies and identification of new drug targets. In agriculture, such
information will lead to a growing set of new tools and products,
including biosensors and diagnostics, to enhance productivity. The
biomedical research establishment will remain a powerful interest group
in the United States.

**Global trade and economic policies will remain important drivers of
agricultural policies.** There will be increasing pressure in the World
Trade Organization on developed nations to liberalize agricultural
policies. Bilateral trade agreements will continue to proliferate.
Concerns about biotechnology are very likely to be used by U.S.
competitors as non-technical trade barriers to modulate trade. Food will
continue to be treated differently than other traded goods.

**The United States will remain a dominant global power.** The U.S. will
retain its position as a leader in technological developments in
medicine and agriculture. The U.S. will also continue to empower other
nations and spread democracy, but our dominant world position will
continue to breed resistance, resentment, and competition.

**EU regulations and consumer preferences will continue to impact world
agricultural production systems.** The expanded European Union will
remain a huge market for global agriculture.

**Increasing "South-South" dialogue in trade and political forums will
increase the influence of China and India on other developing nations
and enhance their global clout.** The next decade will see the emergence
of China as a growing challenge to US dominance.

**Water issues will become increasingly important domestically and
internationally.** There will be increasing pressure on fresh water
supplies, and less water will be available for agricultural uses.
Overall world fresh water quality will decline. Linkages between water
conservation, new agricultural technologies, and no-till agriculture
will become increasingly important.

**Global climate change will become increasingly important.** The
quantities of CO~2~ and other greenhouse gases in the atmosphere will
increase, and the window of opportunity for preventing global climate
change will close. International efforts will increasingly focus on
slowing and mitigating changes underway. The increase in global CO~2~
levels will be exacerbated by rapid industrialization in many developing
countries, especially China. Response to global warming could lead to
major changes in agricultural production patterns or energy policies.

**Globally, there will be decreasing availability of arable land
currently cultivated, due to urban encroachment, conservation needs,
non-sustainable farming practices, and soil degradation.** This will
increase the pressure on agricultural productivity, open new lands that
may be less suitable for agriculture and/or will continue to increase
species extinction pressures, especially in developing countries.

**The increasing price and diminishing supply of fossil fuels will
become an ever more urgent concern for U.S. agriculture.** Worries about
fossil fuels, coupled with new technology advances, will drive the
development of bio-based fuels. In addition, high energy prices could
constrain the use of synthetic fertilizers in the U.S. and also pose a
challenge for the long-term viability of new agricultural lands that are
dependent on large fertilizer inputs.

**Increased global trade and travel will continue to increase the
potential for new emerging diseases as well as more rapid disease
transmission for plants, animals, and humans.** Changing agricultural
systems, new lands opened to agriculture, and climate change create new
opportunities for agricultural diseases. Human infectious diseases,
including, prominently, AIDS, and perhaps malaria, tuberculosis, and
influenza, will increase in importance as issues. Allergies (including
food allergies) and asthma are also likely to increase.

**Enormous new agricultural commodity production areas will come on line
in South America, particularly in Brazil and Argentina.** There will be
tremendous pressure and structural change in the soybean market. This
could have implications on the U.S. export of soybeans.

**The agricultural commodity system will continue to be dominated by 4
crops: corn, soy, wheat, and rice.** Tensions may develop as non-food
uses for some or all of these crops compete with food and feed uses for
agricultural land and resources.

**The trends toward consolidation and globalization will continue.**
These trends will increase vertical integration along the food chain,
and increase the use of monocultures in crop production on larger farms.
Consolidation in the global food industry, and the increasing market
power of large food retailers, such as Wal-Mart or McDonald's, will
continue to exacerbate the domestic or worldwide influence of a few
marketing decisions on the availability or use of transgenic-derived
ingredients and products.

**High levels of debt and large budget deficits will persist in
industrialized nations.** Resultant budgetary pressures will increase
the importance of agricultural trade, historically a major contributor
to the export side of the U.S. trade ledger.

**WHAT IS MUCH LESS CERTAIN**

While the list of things we don't know is necessarily far longer than
the previous list, the AC21 would like to focus on some of the key
uncertainties whose outcomes could directly shape the future for
agricultural products, including biotechnology products.

**Disruptive events.**

A broad variety of events could have a strong positive or negative
impact on the public's perception of the application of biotechnology to
agriculture. Potentially, these range from rapid global adoption and
support for biotechnology from countries like China, Brazil, Russia,
India, etc. and rapid production of biotechnology products to issues
that could negatively impact biotechnology acceptance like acts of
bioterrorism (directed toward agriculture or not) to the emergence of
significant new agricultural diseases that cannot be controlled through
conventional means. Regional famines could require significantly
increasing food aid shipments. Accidents involving contamination of the
food supply with a product(s) not intended or appropriate for use in
food could have serious consequences.

**Demographic uncertainties.**

Increases in food and commodity consumption linked to world population
are also tied to global wealth creation. Increasing world demand for
food, especially meat, will be linked to the level of growth and wealth
creation in key countries like China and India. Changes (whether short-
or long-term) in dietary preferences in developed countries, e.g.,
low-carbohydrate diets, could also impact the demand for key
agricultural commodities. Aging populations in developed countries may
express changed dietary preferences: one could as easily expect to see
increased demand for new, "health-improved" products, and/or a trend
toward consumption of organic-based products, or to see no particular
net shifts.

**Political uncertainties.**

Political and economic decisions by key trading partners or competitors
can have a major impact on the ability of biotechnology products to be
produced and sold competitively. The political stability of key market
countries such as China and India could significantly impact
agricultural trade. Further escalation of Middle East conflicts could
also affect trade. Will the European Union, a decade from now, be
increasing access for biotechnology-derived crop varieties and growing
them as well? What will be the impacts on the use of transgenic
varieties of implementing multilateral agreements, such as the Cartagena
Protocol on Biosafety or future agreements under the World Trade
Organization?

**Technological and regulatory uncertainties.**

The product landscape and the regulatory landscape for new
transgenic-derived products are evolving. With an evolving regulatory
system, it is uncertain how quickly new applications (as food, seeds,
drugs, or new industrial compounds) will reach the marketplace, here or
in other countries. Which products will make it to the U.S. or global
marketplaces, who will reap the benefits, and where? Will new products
developed using the wealth of new genomic information be transgenic
varieties, or will they be non-transgenic varieties developed through
knowledge-based, marker-assisted selection techniques? Will food safety
issues arising in conventional, organic, biotech, or other new
production systems lead to a need for new regulation? Will US farmers
continue to be concerned about their ability to compete with farmers in
South America and China?

Will concerns regarding the deployment of transgenic plants producing
plant-based pharmaceuticals in food crops inhibit or severely restrict
their cultivation? Will production of these or other products move
offshore in response to economic or regulatory considerations? Will
transgenic products with significant consumer pull, perhaps
"nutriceutical products" or others, reach the marketplace in any
quantity? To what extent will parallel technologies emerge that may
compete with transgenic products for use in agriculture?

**Environmental uncertainties**

Will serious effects of global warming become pressing within the next
decade? What will be the price of fuel or energy? Will agricultural
systems be increasingly looked at as solutions to global problems, such
as energy needs or global warming?

**Consumer uncertainties**

The public's receptiveness to increasingly novel products that may come
to market is unknown. Such products could include transgenic
animal-derived products, plant-derived food products engineered to offer
specific health benefits to consumers, and plants and livestock
producing pharmaceutical and industrial compounds. Will such products
drive consumer acceptance or raise new concerns and/or resistance?

Will consumer opinion regarding biotechnology remain changeable, or will
views harden? Will there be a consumer backlash against the market power
of some large conglomerates? Will concern over the implication of other
applications of new technologies, e.g., human cloning, spill over into
perceptions related to the use of transgenic organisms in agriculture?

**Agriculture and food system uncertainties.**

How will agricultural land use change over the next decade? What
proportion of agricultural land will continue to be used for food
production versus other uses? Economics or technological innovations
could drive significant expansion of crop production for bio-energy,
industrial feedstock purposes, or other novel uses. Could such uses
change the overall economics of commodity production? What will be the
global distribution of large-scale bulk commodity production in a
decade? Will new transgenic crops that are commercialized be mostly
intended for bulk use or will there be increasing commercialization of
products for niche markets?

Down the food chain, actions by major players in the food system could
dramatically alter the landscape for new transgenic products. Food
franchises, supermarket chains, and mega-retailers will evolve over the
next decade. What will they look like, how much consolidation (or global
expansion) will there be, what will the future companies look like, and
what will be their attitudes towards products containing
transgenic-derived ingredients and what ingredients will be generated
that may influence consumer attitudes?

**ENVISIONING A FEW POSSIBLE FUTURES**

The numerous uncertainties above (and probably a host of others) could
propel a myriad of possible futures, depending on how events play out
regarding each of them. Neither the AC21 nor USDA is in a position to
predict what will actually happen. However, the AC21 believes it is
useful to provide examples of possible futures, which are intended to
illustrate how resolution of key uncertainties in particular ways could
shape the future for the use of transgenic organisms in agriculture and
the work of USDA. The scenarios share the certainties, but how the
uncertainties play out influence how the scenarios are shaped.

**Each scenario is intended as a coherent description of what the world
might look like a decade from now, after events driven by the
certainties and some of the key uncertainties listed above play out.**

**These are [not]{.underline} predictions of the future, nor are
probabilities or likelihoods assigned to them. They were created to
provoke thought over a wide range of possibilities, so no single
scenario should be considered in isolation.**

**Indeed, we can be relatively certain that when we look back a decade
from now, none of the scenarios will have accurately represented what
actually occurred in the interim.** **Nor do they represent the full
range of conceivable outcomes.**

**However, they do demonstrate the sensitivity of agriculture and the
food system to events that can tip the future in different ways, and,
looked at together, provide an opportunity to extract additional
knowledge about broader impacts into the future.**

Here, then, are three scenarios we have created, among the many that
could be developed. We have entitled them "Rosy Future," "Continental
Islands,", and "Biotech Goes Niche." Using and adding to the list of
certainties and uncertainties, you can build your own scenarios.

Because each of these scenarios has implications for farm income,
consumers, the environment, trade, private investment, USDA agendas, and
resources, we advise you to read these scenarios without making value
judgments or picking a favorite. Instead, we advise you to consider the
consequences of each if the scenario or some version thereof came to
pass. After outlining the three scenarios, we will pose a series of
specific questions that could help you work out some of the
implications.

I. ["Rosy Future"]{.underline}

By 2015, life science research delivered beyond anyone's expectations.
Like those involved in the information technology revolution, even those
doing the research and investment were overwhelmed by the scale and
speed of change. Among the new products were crops with increased yield,
resistance to key stresses like drought, plants engineered for new
energy uses, including production of biodiesel, and new food products
that provide valuable health benefits. In addition, plants with various
combinations of traits significantly increased the utility or impact of
these new crops.

Agricultural biotechnology began being employed all over the world, not
only in agricultural exporting countries. Research and development
continued in the Western world and in those developing countries whose
governments quickly recognized the opportunities and were able to
provide an appropriate investment climate. European nations continued
their development of new ag biotech uses for pharmaceutical, industrial,
and energy products. European opposition to food uses decreased
significantly as EU governments, non-governmental organizations, and
consumers realized the value of increasing agricultural productivity on
GDP and competitiveness.

More food could be produced on less land, which was fortunate because,
as Chinese and Indian incomes rose, demand for animal feed exploded. Had
the new transgenic products not come on line, meeting demand would have
required bringing enormous amounts of new agricultural land under
cultivation.

Farmers now faced a much more complex world with an even broader array
of crop and seed variety options. Their acreage could now be used not
just for food, feed, and fiber production, but also for chemical,
pharmaceutical, and energy production. This meant that they could
participate in, and had to understand and follow, a wider range of
markets, financial instruments, and opportunities. Niche and small
family farming became profitable because of the high value of some
transgenic products grown on farms. Non-food uses for crops became
increasingly economically important, but remained high value, low acre
opportunities.

Overall farm and agribusiness income increased and there was ever less
dependence on subsidies. Alternatives like converting biomass to energy
meant there was now a floor price on grains. Why sell a bushel of corn
for food or feed at the government loan rate if energy companies would
pay more? In addition, because the increased number of agricultural
biotechnology products and uses reduced the need for subsidies, trade
wars became less of an issue.

An increasingly sophisticated and broad set of companies established
partnerships with various segments of the agribusiness chain.
Pharmaceutical companies used their new networks of seed producers to
begin growing various medicines and vaccines. Some forms of animal
husbandry became far more specialized, regulated, and profitable as
areas like medical and materials production grew. Information,
computing, and diagnostic companies became increasingly involved in this
process. Energy companies began to invest in bio-based energy.
Governments began permitting the establishment of carbon trading
enterprises based on an increased focus on global warming. Farmers,
particularly those using biotech products in no-till agriculture, began
to capitalize on these new market opportunities.

As various conglomerates began to integrate technologies and outlets,
mergers and acquisitions blossomed on a very broad scale. Bioinformation
companies merged with financial companies. Mergers between seed
companies and chemical-pharmaceutical companies continued. Some energy
companies began developing broad portfolios of alliances and
acquisitions outside the traditional energy business.

Companies began seeing more and more diverse business opportunities.
Even with increased global competition, for U.S. companies the overall
opportunity "pie" was growing faster than the increase in competition.

Some medicine-producing goats were worth hundreds of thousands of
dollars and were cared for as carefully as human patients in a hospital.
Highly specialized animal products for xenotransplantation[^6] merged
the most sophisticated laboratories and boutique farms.

Within the food system, a series of niche markets serving different
"nutriceutical" needs provided farmers with far more specialized markets
and opportunities. Foods engineered to help people lose weight or ward
off certain diseases exploded off supermarket shelves. This created
consumer pull for a wide range of new farm products and a much broader
acceptance of biotechnology. Further integrating the grocery industry
and food processors with projected crop needs became ever more
important. As niche crops became more important, often a farmer's whole
crop was sold prior to planting, as long as it met strict quality
criteria. Some environmentalists throughout the developed world
continued to worry that the increasing rate of new product introductions
could lead to a serious accident, but so far this had not occurred.

Farmers adapting to the new technologies became more profitable
regardless of farm size. Those who did not adapt had a harder time and
were replaced by more technically sophisticated producers. For high
value crops, production became highly vertically integrated, continuing
existing trends in that direction.

Most of the innovations took place in major crops, but some improvements
to minor crops took place and began to change cropping patterns in the
U.S. and elsewhere.

Maintaining the integrity and traceability of the streams of products
coming off the farm and into various supply chains including chemicals,
energy, cosmetic, and food became ever more important. This meant that
much of the production during the first years of this broad biotech
revolution continued within the US market and expanded to other
agricultural exporting countries. Countries with a long history of
technologically intensive, greenhouse-based production, became
formidable competitors for specific products. Higher margins and a need
for tight control over all aspects of the food chain made the idea of
moving production of the specialty applications of crop biotechnology to
the developing world less attractive for U.S. companies.

Not all was positive however: changes in global consumption and
production patterns -- increased global demand for animal feed,
increased demand for energy uses and continued population growth and
urbanization - created its own set of pressures. As farmers increasingly
used commodity crops for other uses besides food, commodity prices rose
and there was increased clamor to bring ever more land under
cultivation. Environmentalists throughout the developed world lobbied to
limit this trend. Biotechnology was utilized as a tool to increase the
efficient use of agricultural land. There was continuing concern over
long-term environmental degradation resulting from the exclusive focus
on output optimization. However, the overwhelming impact of biotech
crops grown on large areas was to reduce the environmental impacts of
agriculture. Less overall water, fuel, chemical pesticides and packaging
were used compared to non-biotech agriculture, and soil erosion problems
were reduced.

Governments adopted compatible regulatory systems, essential for
development of, and trade in, new products. However, the poorest
developing countries found themselves ever more marginalized. Much of
the benefits and profits of this revolution went to those who had done
the biotechnological research and provided sophisticated services. There
was increased talk and concern of a life sciences divide as well as the
digital divide.

While the increased number of new patented seeds, animals, and
techniques reflected a broader acceptance of the importance of
intellectual property, intellectual property remained a significant
battleground between developed and developing countries. However, a few
developing countries saw the future and joined the developed world with
respect to these techniques. Some countries also began producing generic
versions of popular products.

II\. "[Continental Islands"]{.underline}

New products of biotechnology continued to be developed and introduced
into the marketplace. Farmers in a number of countries in the Americas
and Asia continued to adopt biotech crops, based on significant positive
economic impacts. Many of these new products were plant varieties with
two or more new traits in a single variety, providing additional value
for growers, and some new agronomic and consumer focused products have
come to the market. Development of transgenic animals continued for
niche applications, including xenotransplantation, but not for food
uses. Given smaller markets, little investment was made in minor crop
biotechnology.

The process for bringing transgenic agricultural products through the
regulatory approval process to commercialization remained efficient in
the U.S., Canada, and Argentina, and China, Mexico and Brazil joined
their ranks. In some other countries with much slower regulatory
processes, such as India, Australia, the European Union, and some
African countries, additional products were only commercialized slowly.
In other countries the approval processes remained non-existent or
cumbersome.

Despite continued efforts, no international harmonization of regulations
occurred and restrictive regulations continued to serve as trade
barriers. Different countries or regions had varying regulatory systems
and procedures. Labeling of biotechnology products varied by country and
was non-standard.

The United States continued to be a major producer and distributor of
biotechnology products. Other major growers and producers were Canada,
Argentina, China, India, Brazil, and South Africa. One or more of these
countries commercialized a major transgenic crop not commercialized in
the U.S. Asia and the rest of Africa remained divided, with some
countries accepting or promoting the technology, and others rejecting it
(even as food aid).

The EU (including the accession countries) continued not to accept food
products in general, though they accepted products for feed uses and
approved some products for field testing and importation. Despite the
approvals, though, no products were actually tested (except for very
small-scale field trials) nor were many food products imported and
offered for sale.

Commodities destined for food use and those for feed use continued to be
handled differently in different continents or regions.

The impacts seen in the farming community varied from farmer to farmer,
depending on whether their principal markets were domestic or export.
The domestic market continued to utilize transgenic products. Some
exporters continued to test for their absence since non-transgenic
certified products could be sold at a premium to food manufacturers
wanting to avoid labeling and other compliance issues. Premium contracts
with growers were often used to meet these non-transgenic crop needs.

Along the agricultural food chain, the pattern was similar. Products
containing ingredients derived from transgenic varieties were acceptable
and widely used for domestic markets, while food products for export
largely sourced for non-transgenic-derived ingredients. Multinational
food companies also used non-transgenic ingredient sources where there
was mandatory biotech food labeling, or used non-transgenic ingredient
sourcing globally. Since much of the biotech corn, soy and cotton
produced in the U.S. was destined for domestic markets or markets with
approval of biotech crops, farmers continued to plant large amounts of
biotech corn, cotton and soybeans and realize the associated economic
returns. With an increased demand for ethanol, the demand for corn in
the U.S. continued to increase, creating additional growth and
consumption of biotech corn.

Research and development activities by multinational technology
providers and developers focused more on basic research since the market
for new transgenic products was limited, and there was more emphasis on
leveraging genetic understanding into targeted breeding programs, etc.
There was continued consolidation among technology providers, but little
additional capital for expansion. Research and development activities by
public universities now focused on basic research.

Consumers worldwide remained divided and/or ambivalent. Those in the
U.S. and most of the Americas continued to accept products containing
ingredients derived from the first generation of transgenic plants
without special labeling. Those in the EU and some other parts of the
world were either opposed to the technology (and supported mandatory
labeling as a means of product avoidance) or were ambivalent. Consumers
in other countries varied in their sentiments, depending on the views of
their governments. The situation was most confused in Africa, given the
dire need for food and given confusion regarding trade-related issues,
especially with the EU.

There continued to be no negative health implications from
transgenic-derived food products. Continued positive environmental
impacts were realized in the U.S., particularly with respect to
decreases in pesticide use and increases in conservation tillage.

International trade remained complicated given regulatory and acceptance
differences. USDA, the State Department and other agencies continued to
expend a significant amount of resources in fighting for biotechnology
in the trade arena. Several other countries opposing the spread of the
technology devoted comparable resources on the opposite side.

III\. ["Biotech goes niche"]{.underline}

After a splashy debut, genetically engineered crops products did not
turn out to be major components of world commodity agriculture, but
continued to thrive in important niche markets. The first two products
of crop biotechnology\-\-- Bt and herbicide tolerance products, widely
adopted in the U.S., Canada, and South America, were not followed by
other blockbuster products. Some major agricultural regions continued to
reject genetically engineered crops.

No transgenic varieties of wheat were ever commercialized. None of the
promised new traits---drought tolerance or cold tolerance---panned out
for corn, soy, cotton, or canola. The first generation of adopters
remained enthusiastic about herbicide-tolerant and insect resistant (Bt)
crops but was gradually forced to turn away from them because of lack of
global acceptance and increased use of marker assisted technologies for
development of improved germplasm in conventional seeds, but not
"transgenic crops".

The public did not accept the genetic engineering of animals for food
uses, and given the technical difficulties associated with many of the
modifications, there was no enthusiasm for commercializing genetically
engineered animals for those uses. However, applications involving
genetic engineering of animals for producing pharmaceuticals or tissues
for xenotransplantation came on line.

The reasons for the fading away of transgenic products were complicated.
First, the technology never overcame the barriers inherent in
engineering useful traits involving multiple genes. Research costs
remained high. The few products with claims to improved nutrition were
never attractive enough to enjoy large price premiums. Without those
price premiums it was hard to justify big investments in continued
research and identity preservation schemes.

In the regulatory arena, mandatory food safety approval and
transboundary movement requirements continued to increase as did the
cost and time it took to go to market. There were some efforts amongst
countries to harmonize requirements. However, the majority of countries
developed their own regulatory systems based on local needs and market
protection preferences. Consequently product developers had to deal with
multiple diverse regulatory schemes in order to do international
business. This was further complicated by farm-to-table traceability and
labeling requirements and country-of-destination requirements imposed by
the Cartagena Protocol on Biosafety and several other international
treaties. Frequent detections of transgenes in both traditional and
other transgenic crops posed interrelated policy challenges. Attempts to
address those challenges with new approaches to adventitious presence,
approved detection and sampling methods, and what constitutes a "novel"
product never met with consensus.

Another part of the equation was consumer resistance. Consumers in the
United States continued to be generally receptive or somewhat
indifferent to transgenic crops, but consumers in many other countries
remained opposed to the technology. In the increasingly interconnected
global marketplace, international retail companies simply found it
easier to source non-transgenic material. There was no consumer demand
for genetically engineered products, so there seemed little reason for
food companies to take on the extra burden of selling "GMOs" to
customers who did not want them.

Food manufacturers, fast-food chains and mega-retail enterprises began
specifying non-transgenic-sourced food ingredients and raw materials for
their branded products. Many consumers failed to recognize potential
benefits of the technology and questioned whether benefits from
transgenic commodities were being directed to big business. Business
economics demonstrated that new transgenics would only be profitable in
the specialty "niche" market. Concerns grew stronger over the potential
discovery of a pharmaceutical gene product in a food product. Although
scientists said it did not present any human health risks, customers
nevertheless tended to reach for other food options.

Although interest in new commodity transgenics faded, agricultural
innovation continued. On the scientific front the complete genomes of
the major food, feed and oil crops were made available through public
databases to scientists, researchers, breeders and others in developed
and developing economies. There was welcome progress in the ability to
translate sequence information into agricultural improvements.
Agricultural advances were facilitated by exponential growth of data
delivered from various technologies, such as genomics, proteomics, gene
expression assays, and bioinformatics.

Some innovations resulted from marker-assisted or traditional breeding.
While the fruits of genomics were a while in coming, the mountains of
data were eventually digested. Because traditional breeding could more
readily accomplish selection for interacting sets of genes, the new
products wound up providing a broader variety of traits than did genetic
engineering. In addition, because they were traditionally bred, the new
products could be brought to market with little regulatory oversight.
However, some problematic new diseases, for which enhanced traditional
approaches were not effective, emerged. Except for some groups focused
on patenting and monopoly concerns, most of the new, innovative products
escaped consumer opposition.

Some innovations depended on new non-biotech systems of agriculture and
included new ways of enriching soil, protecting against pests and
increasing yields. Many of these ideas were generated in the research
done in support of organic and other new systems made possible by
research funds diverted from investment in biotechnology products. With
steady increases and double digit annual growth, these new food
production systems rose to constitute 6 percent of total food
production. Several large multinational food companies launched new
product lines. Marker-assisted breeding programs became integrated with
farmer and producer needs and were welcomed into these new systems.

Scientists did not abandon genetic engineering, but aimed their research
at niche markets that generally did not involve the food system. The new
genetically engineered products included a few energy crops, although
most energy crops were produced using traditional or marker-assisted
breeding. The production of pharmaceuticals in transgenic non-food crops
also became a niche market. Two genetically engineered foods, for which
developers were able to make compelling claims for prevention of heart
disease and Alzheimer's, performed well in clinical trials and were
expected to be commercialized soon. Companies redirected their efforts
onto new niche markets, like energy-based or pharmaceutical products.
These markets offered viable survival strategies for seed and technology
companies.

The trade arena continued to be dynamic. China emerged as both a market
and a competitor to the U.S. in the global commodity arena---huge and
unpredictable. The demand for commodity products increased but so did
global agricultural production as new areas in South America and Central
Europe came on line. The result was an unpredictable seesaw of prices.
There was growing concern globally that farmers in China were benefiting
from the widespread use of biotechnology products in China without any
regulatory oversight in the international markets. Some U.S. biotech
companies transferred their research and development efforts to China
and other developing countries with more open trade policies and greater
food security needs.

With regard to farm subsidies, deadlines for agreed-upon reductions in
payments were not met. National and regional trade restrictions
continued, as did high tariffs. Through two election cycles since the
last Farm Bill, both the U.S. farm policy and the European Common
Agriculture Policy remained surplus-friendly. A number of developing
economies led by several small Asian and African countries continued to
fight against subsidies in the WTO round of discussions by demanding
that subsidies and protective tariffs be eliminated and markets opened
to products grown in these developing economies. Global trade in
agricultural products continued to be characterized by a maze of
national/regional phytosanitary standards, but the adoption of genetic
engineering technology faded as a factor in global competition..

Developing countries---the poorest countries of the world---remained
poor, because the world community remained unable to help them develop
the infrastructure, access to markets, and targeted agricultural
research investments that would result in an agriculture that could
increase incomes and exports.

Without a barrage of new transgenic products on the horizon, the State
Department and USDA and other agencies did not need to expend resources
in fighting for market access for commodities and other agricultural
products generated through biotechnology in the trade arena, in Codex
Alimentarius and in other arenas. Overall, the drop-off in introduction
of new transgenic commodity crops decreased the U.S. policy focus on
international acceptance of those crops, and consequently lessened
global agricultural trade frictions. This freed up some resources for
other purposes, including assistance to poor countries.

A decrease in biotechnology crop plantings resulted in a return to
agricultural farm practices based on conventional crops. This resulted
in an increase in overall volumes of insecticides and herbicides used to
protect crops, and an increase in the use of energy and water in the
manufacture, transport and application of these products. Additionally,
soil erosion began to increase as more farmers used tillage in their
fields.

You have now visited three very different worlds. Here are a few
questions you might wish to consider for these and other scenarios you
might envision. These questions are designed to provoke discussion and
help prepare for an uncertain future.

1.  What is the economic impact of the scenario?

-   Competitive drivers

-   Economic growth

-   Trade development/exports

-   Farmer income and rural development

-   Market segmentation

2.  What is the impact of the scenario on the natural environment?

> 3\. What are the implications of the scenario for USDA?

-   Resources

-   Regulatory structure

-   Trade and promotion

-   Impacts on other government agency resources that could affect USDA

-   Public research agenda

4.  What are the implications of the scenario for consumers and for
    public acceptance?

5.  What are the implications of the scenario for addressing global food
    sufficiency/food security?

[^1]: Biotechnology is a range of tools, including traditional breeding
    techniques**,** that: (1) alter living organisms (or part of
    organisms) to make or modify products; (2) improve plants or
    animals; or (3) develop microorganisms for specific uses. Much of
    the discussion of biotechnology in this report focuses on "products
    of modern biotechnology" and "transgenic (or genetically engineered)
    organisms" (or their products), namely organisms produced through
    genetic engineering or recombinant DNA processes, and products
    derived from them.

[^2]: Several authors have detailed the methodology of scenario
    planning, including Peter Schwartz, in "*The Art of the Long View."*

[^3]: Although population growth has slowed somewhat over the past
    decade it continues to expand in absolute numbers, particularly in
    the developing world.
    <http://www.census.gov/ipc/prod/wp02/wp-02001.pdf>

[^4]: <http://www.agribusiness.asn.au/review/1998V6/chinameat.htm>

[^5]: <http://www.niddk.nih.gov/health/nutrit/pubs/statobes.htm#preval>

[^6]: "Xenotransplantation" refers to transplantation of organs derived
    from other animal species for therapeutic purposes. As of 2004,
    there is active biotechnology research to "humanize" animal organs
    to make them less likely to be rejected by organ recipients.