Required Report - public distribution

**Date:** 6/26/2006

**GAIN Report Number:** GM6021

GM6021

**Germany**

**Biotechnology**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)William W. Westman

U.S. Embassy

**Prepared by:**

Dietmar Achilles

**Report Highlights:**

With the new German government in place since November 2005, there is
renewed optimism for the growing of biotech crops in Germany. Farmers
have a problem with the corn borer and the industry can provide a
promising solution. In 2006, 979 hectares have been planted to biotech
corn varieties, three times 2005 levels. The harvested crop will be used
for feeding. Based on the EU labeling rules the resulting livestock
product does not need to be labeled as "biotech". The food chain is
still extremely reluctant to place "biotech" labeled food products on
the shelf.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Berlin \[GM1\]

\[GM\]

Table of Contents

[**Section I: Executive Summary 3**](#section-i-executive-summary)

[Section II: biotechnology Trade and Production
4](#section-ii-biotechnology-trade-and-production)

[Commercial Production of Bt corn in Germany
4](#commercial-production-of-bt-corn-in-germany)

[Research on biotech Crops 4](#research-on-biotech-crops)

[Genetech-free Zones 5](#genetech-free-zones)

[Section III: biotechnology Policy 5](#section-iii-biotechnology-policy)

[Regulatory Framework 6](#regulatory-framework)

[Antibiotic Resistance Marker Genes
7](#antibiotic-resistance-marker-genes)

[biotech Threshold levels 7](#biotech-threshold-levels)

['without biotech' Labeled Products
7](#without-biotech-labeled-products)

[Section IV: Marketing Issues 7](#section-iv-marketing-issues)

[biotech Papaya 8](#biotech-papaya)

[Testing for biotechs 8](#testing-for-biotechs)

[NGO Activities 8](#ngo-activities)

[Section V: Capacity Building and Outreach
9](#section-v-capacity-building-and-outreach)

[Informational Visits to the U.S. and Speaker Programs
9](#informational-visits-to-the-u.s.-and-speaker-programs)

[Changes in the German Political Arena
9](#changes-in-the-german-political-arena)

[White biotechnology 10](#white-biotechnology)

[Section VI: Reference Material 10](#section-vi-reference-material)

# Section I: Executive Summary

A growing number of German farmers are expressing interest in planting
Bt corn varieties since they have a problem with the corn borer and the
biotech industry offers them a solution with a wide range of advantages.
In 2006, almost 1,000 hectares are planted to Bt Corn, which is an
increase of about 600 hectares over 2005. However, research, production,
and consumption of plants and plant products resulting from genetic
enhancement of crops are still controversial issues in Germany. The
scientific community and members of the conservative political parties
have been generally supportive of biotechnology. However, they are
counter-balanced by the Green Party and environment/consumer-related
NGOs, such as Greenpeace, which are very pro-active and vocal in
expressing their concerns about this technology.

Consumer opinion polls in Germany regarding biotechnology fluctuate
widely, depending on the wording of the questions. If opinion polls are
more detailed and scientific information is included in the
questionnaire, responses show a much more supportive and understanding
view of biotechnology. The political and the industry focus is currently
on intensifying efforts in the field of white biotechnology (basically
the use of organic matter such as enzymes, bacteria, and plant tissue
for industrial purposes, excluding open field planting), providing
opportunities in the field of environmental protection, cost reducing
chemical processes, improved utilization of available limited resources,
and waste reduction. In Germany white biotechnology is perceived
positively, in part because Germans believe it does not create
unmanageable risks. Another field of interest to the German biotech
industry could be the production of renewable fuels and other products
for non-food use. The industry perceives that such products will receive
a higher level of acceptance since they do not enter the food chain.

In Germany the regulatory framework for biotech products is set by EU
regulations and directives (see GAIN report E35091), which in their
current form are generally supported by the majority of German
politicians. The European Commission however decided that co-existence
rules would be determined and set by the individual Member States. In
the spring of 2006, the German government finalized its new genetech
law, which fully transfers the EU genetech directives into national law.
Since the industry views the German law as restrictive for research,
production, and trade the new government announced the intention to
amend the law to make the rules more user friendly. An agreement between
the government and the industry seems to be achieved that the government
will no longer demand the forming of a fund to cover financial risks
resulting from adventitious presence of biotech crops in organic
conventional production. The industry in cooperation with the farmers
will develop market-oriented solutions which cover eventual financial
damages. Examples for such solutions are contract farming, marketing
arrangements for biotech containing crops or damage cover agreements by
the seed suppliers. The strict transparency requirements for a public
field register for biotech crops are not expected to be lifted or
weakened.

For seven years, German farmers have been commercially growing a limited
amount of Bt corn (only 300 to 500 hectares). Most of the crop is
consumed on the farm as silage. Many of these farmers face criticism by
biotech opponents. Biotech field releases for research purposes are
frequently destroyed, making biotech companies hesitate to start new
research programs in Germany.

Currently, there are hardly any biotech-labeled food products found on
German retail shelves. The retail business refrains from stocking
biotech labeled products because they fear that anti-biotech activists
may demonstrate in or outside their stores. Consolidation and
competition in the German retail market is very intense and the prime
marketing tool for the retailers is price. Since profit margins are very
narrow in Germany, retailers try to avoid having any negative
impressions of their products in the market.

# Section II: biotechnology Trade and Production

## 

## Commercial Production of Bt corn in Germany

Despite political opposition of the Green Party and to a somewhat lesser
extend also by the governing Social Democrats Party and lack of support
by leading German farmers associations, a small number of farmers
planted 979 hectares of biotech corn varieties on a commercial basis in
2006. With almost three times as much area as in 2005, this can be
interpreted as growing interest in the technology by German farmers.
Originally at the beginning of 2006 farmers had registered about 1,800
hectares for Bt corn planting. A number of farmers later refrained from
planting their fields with biotech varieties, claiming they were
pressured by biotech opponents not to grow biotech crops.

Currently the only commercial biotech crop in Germany is corn and the
only biotech trait approved for production is insect tolerance. Not all
of the German corn production regions are affected by European corn
borer infestation and the root worm has not yet arrived on German farm
land. Current farmers' interest in Bt corn planting is predominantly in
regions with large farm sizes, mainly in the eastern third of the
country. Farmers in Southwest Germany are reportedly less interested in
Bt varieties since that region is also a major corn seed production area
and these farmers wish to be safe that their corn seeds are free of
biotech contact.

Since 2003, genetech varieties are using the biotech trait MON810.
Previously, varieties containing the trait Bt176 were used. Since 2005,
five corn varieties have been registered with the German Federal Seeds
Register and may be planted to an unlimited area. In previous years, a
special planting permit was required for a limited amount of corn seeds.

In 2004, an extensive monitoring program accompanied the planting of
about 300 hectares of Bt corn. The goal of this monitoring program,
sponsored by federal research and state funds, was to determine the
extent of the flow of corn pollen into neighboring fields. The industry
intended to prove that biotech corn does not create a considerable
problem for coexistence with non-biotech varieties. The result of the
tests showed that biotech content in corn samples taken more than 20
meters from the biotech plants were below 0.9 percent, the threshold
which constitutes the need for labeling the harvested product as
biotech.

To avoid any kind of liability problems for the production of biotech
corn in 2005 and 2006, the German feed milling and grain trading company
Maerka Kraftfutter made the public promise to purchase the corn from
fields neighboring biotech corn fields up to a distance of 500 meters.
The purchase price will be equivalent to normal market prices in the
region, regardless of biotech content. Maerka also markets and processes
domestically harvested biotech corn into commercial feed compounds and
labels these products as 'contains biotech corn'.

## 

## Research on Biotech Crops

According to German government reports, so far a total of about 160
research applications requesting to use field released biotech crops
have been filed in Germany. This is well below the 2,100 applications
requested EU-wide. Significantly more field releases were approved in
France, Spain, Italy, and the United Kingdom. The applications for field
releases in Germany covered a wide variety of plants, such as poplar
trees, grapes, grains, oilseeds, beets, potatoes, pulses, and others.
Most of these field releases were for research, and not yet at the level
of biotech event application approval. The next biotech events awaiting
EU approval are amylo-pectin starch potatoes.

Applications for field releases during the past two years concentrated
on potatoes and corn. These are crops, which have a low out-crossing
risk in terms of coexistence. The biotech industry has pretty much
stopped or reduced field studies with higher out-crossing potential,
such as rapeseed, which have the potential to create a major controversy
with biotech opponents. Despite the efforts to promote consumer,
processor, and environment friendly biotech traits, anti-biotech
activists of the NGO Greenpeace continue to destroy test plantings of
wheat and potato field releases. The goal of the researched biotech
event in wheat was an increased resistance against grain fusarium, which
if successfully developed would reduce possible health risks for
consumers. The work in potatoes concentrates on improvement of the
starch composition but also pharm-potatoes have been field released in
northern Germany in mid June 2006. Due to strong opposition to
biotechnology in plant production, leading biotech companies announced
that they intend to relocate research and in particular field test
efforts to countries outside of Europe. However, this does not imply
that the biotech companies and the seed breeders have given up on
biotech in Germany.

## 

## Genetech-free Zones

Aside from the commercial production and research areas for biotech
crops, groups of German farmers have declared about 93 regions in
Germany as biotech-free zones. The total area covered by these
biotech-free zones amounts to about 861,000 hectares with 25,400
participating farmers. A large number of these regions are located in
Bavaria and are primarily composed of grassland for dairy production.
These zones are formed by the voluntary agreement of farmers to not
plant biotech crops in the particular region. In part these declarations
are used for tourism purposes. Other non-biotech regions were initiated
by organic farmers. We understand that there is no legal enforcement
mechanism connected to this declaration that would prevent a farmer from
growing biotech plants. Also the Christian churches are an active NGO
opposing genetechnology on church-owned land.
http://www.gentechnikfreie-regionen.de/

# Section III: Biotechnology Policy

Leadership for biotechnology policy in Germany rests with the Federal
Ministry for Food, Agriculture and Consumer Protection (BMELV). However,
the Ministries of Economics, Health, Research and Environment are also
involved in the opinion and decision-making process and need to approve
Germany's voting decision in EU committees and councils. This split of
responsibility also applies to Germany's role in the Biosafety and
Biodiversity committees. The German regulatory office for biotech
authorization and risk assessment is under the political leadership and
supervision of BMELV.

The willingness to promote or at least tolerate the presence of biotech
foods and feeds and the planting of live genetically modified organisms
is highly dependent on the political leadership of BMELV. In recent
public statements, Minister Seehofer, BMELV, has expressed his support
for intensified research on green biotech but is still reluctant to also
strongly promote the planting of biotech crops. However, in contrast to
the previous German government the current governing politicians no
longer express their straight opposition against the technology. The
coalition contract between the Christian Democrats Party and the Social
Democrats clearly states that the new government is generally supportive
of research in biotechnology and wishes to guarantee fair opportunities
for the production of conventional, organic, and biotech seeds.

## 

## Regulatory Framework

The regulatory framework for biotechnology is set by EU regulations and
directives. While regulations directly apply in all EU member countries,
directives have to be transferred and incorporated into national laws.
This incorporation process requires that national laws have to be
crafted or existing laws need to be amended accordingly. Directives
provide the opportunity for member countries to exercise some discretion
and strengthen or weaken the EU requirement without altering the basic
scope of the EU directive.

The German government took advantage of this discretion while crafting
its national genetech law. In particular, rules about liability,
coexistence, and a public register for fields planted to biotech crops
have been crafted in a way that many farmers generally interested in
growing Bt corn and an increasing number of researcher refrain from
working with biotech varieties or develop biotech events in Germany.

In summary, the current German genetech law makes farmers financially
liable if they grow biotech crops and these biotech events pollinate in
neighboring fields regardless whether the farmer fully complied with
good farming practices. If neighboring farmers wish to sell their
'biotech-contaminated' crop as biotech-free conventional or organic
crop, they might suffer financial losses. The farmer suffering damages
is not required to prove from which field exactly the biotech pollen
originated.

In lengthy negotiations between the BMELV, the biotech industry, the
seeds producers and the farmers association it has been agreed in June
2006 that the liability issue should be solved in a market economy
oriented manner. Options for solutions are contract production of
biotech crops, arranged purchase commitments biotech crops and crops
with limited biotech content by agricultural merchants and processors, a
liability exemption statement by the seeds industry for the farmer and
other like arrangements. BMELV no will longer demand the forming of a
liability fund. The seeds industry and the biotech industry strongly
opposed the idea of a liability fund.

Coexistence rules and good management practices for biotech farmers have
not yet been finalized. The most controversial portion of the proposed
rules is the required minimum distance between biotech fields and fields
planted to conventional or organic varieties. In a first step BMELV
intends to establish such a minimum distance only for biotech corn
varieties because domestic research data are not available for other
crops. The intended protection distance is proposed at 150 meters.
Actually, current production advices of the biotech industry for growing
Bt corn ask the farmers to keep minimum distances and 300 meters to
organic fields.

The current public biotech field register is viewed with concern by the
biotech industry, which fears this information may be used by biotech
critics in order to destroy these crops. They are also concerned that
farmers on the biotech field register may be intimidated into not
planting biotech varieties. The current rules require the farmer to
register his field any time from nine months to a minimum of three
months before actual planting. The farmer has to report the exact
location of the biotech fields, field size, and the biotech trait to the
national public register. The register is accessible to everyone through
the internet.

For the planting season in 2006, farmers had originally registered about
1,890 hectares to plant to biotech corn. In the end about 979 hectares
have actually been planted to\
biotech corn.

## 

## Antibiotic Resistance Marker Genes

The biotech trait Bt176, a construct of the Syngenta company, has been
banned for use as a seed in Germany. The German government argues that
the presence of an antibiotic resistance marker gene in Bt176 has the
potential to pose a threat to public health and to the environment.
Although the German research community disagrees with this negative
evaluation, Germany voted in Brussels against lifting the ban for Bt176.

## 

## Biotech Threshold levels

The EU labeling directive sets a labeling threshold for unavoidable
adventitious presence of biotechs in food and feed at 0.9 percent.
However, a threshold level for adventitious biotech content in seeds has
not yet been set, which actually translates into a zero tolerance for
biotech content in conventional or organic seeds. The previous German
government had proposed setting it at detection level or 0.1 percent.
The new government has not developed a new position but is expected to
support a level as low as possible. The mood within a growing number of
EU member states seems to show that pressure is developing that a seed
threshold needs to be set soon.

Due to the missing threshold level, biotechs are not allowed in
conventional or organic seeds. If traces of EU approved biotech traits
are found in seeds, these seeds need to be labeled as containing biotech
or these seeds cannot be marketed. Additionally, fields planted with
these seeds need to be recorded in the biotech field register. If seeds
with adventitious presence of biotechs are seeded, the regional
supervising authorities usually require that these crops be destroyed.
Not yet EU approved biotechs are totally prohibited in seeds.

## 'without biotech' Labeled Products

Prior to the EU labeling regulations, effective in 2004, Germany crafted
a national law in 1998, which allows the labeling of a product not to
contain biotechs. The term to be used is 'without genetech'. This label
may be used for products derived from conventional seed varieties and
from animals, which were not fed with biotech containing feedstuffs. A
specific threshold level for adventitious and unavoidable presence of
biotechs is not established in the regulation.

The 'without genetech' label has been used very rarely during the past
eight years. Currently, one dairy company advertises that it produces
milk without gene technology. Another product recently found on retail
shelves is kidney beans, where the canner, a French company, claims that
the product does not contain biotechs. However, the 'without genetech'
label may not be used for products, for which no varieties have yet been
genetically modified worldwide, such as oranges or basmati rice among
others.

## 

# Section IV: Marketing Issues

Biotechnology in crop production is a highly contentious issue in
Germany as in most other EU countries. Opinion polls provide widely
varying results. Opponents to biotechnology often point to polling
results that show that about 70 percent of the German population is in
opposition to this technology. Other polls, if questions are asked
differently, come to the result that about 83 percent of the people
interviewed did not see any problem in finding biotech-labeled products
on food retail shelves.

Since the implementation of EU labeling regulations for biotech foods in
April 2004, Greenpeace has reportedly found a number of food items on
the German retail shelves containing biotechs or biotech-derived
products, which in most cases were correctly labeled. Greenpeace
activists have also visited restaurants and take-away food places where
they found biotech soyoil, which was not labeled on the menu. Greenpeace
'convinced' the restaurant owners and the retailers to switch to other
non-biotech products or take the products off the shelf. The products
found were imported candy bars containing biotech cornstarch and soybean
products, such as soyoil, tofu, and bean sprouts.

To avoid biotech labeling of processed food items, the German food
industry as well as most other European food processors switched from
biotech-origin ingredients to non-biotech alternatives. This
substitution was most prevalent for biotech soybean oil, which was
replaced with European rapeseed oil. Because of rising demand for
rapeseed oil in biodiesel production rapeseed oil has become the most
expensive vegetable oil out of the group of standard vegetable oils.
Even sunflower oil is lower priced than rapeseed oil.

One of the main reasons why the industry refrains from using biotech
products in the production of foodstuffs is the very intensive
competitive situation of the German retail market. Low price discount
stores are displacing traditional food markets. At the same time the
growth rate of the sales area is higher than the growth of gross sales.
Competition in the German food retail sector is significantly more
intense than in other EU countries since the retail food floor space per
1,000 inhabitants is highest in Germany, 1,400 sqm in Germany versus 850
in France and 700 in the United Kingdom.

Food sales in Germany are predominantly driven by price. As a result,
generic products, which are generally more affordable, are increasingly
replacing branded products. In view of this intense competition, retail
companies wish to avoid placing biotech labeled products on their
shelves.

## Biotech Papaya

On several occasions in 2004 and 2005 , unauthorized biotech papayas
were detected on the German retail market. Competent authorities forced
the importer to destroy these products which came from genetically
modified plants that were bred to be disease resistant. Since this
biotech trait is not yet approved in the EU, these biotech papayas were
not allowed to be marketed or sold in Germany. Since January 2005, the
importer has had to have all incoming papaya shipments from Hawaii
tested for biotech presence before they can be marketed.

## Testing for Biotechs

Germany has a decentralized system for testing and controlling the
illegal entry of biotech products into Germany. The control authority to
make sure that no unauthorized biotech product enters the German retail
market is with the 16 German states (Laender). The Laender establish
their own monitoring and sampling plans. Since the experts know what
kind of products are potentially 'biotech contaminated' they
specifically sample for these products. Sampling is primarily done at
the wholesale and the processing level.

## 

## NGO Activities

The German green-based NGOs, such as Greenpeace, have undertaken
intensive efforts to keep biotech crops off the fields and biotech food
products off the shelves. Greenpeace met with German food processors and
retailers to request commitments from these companies to keep their
retail shelves and production plants biotech-free. We understand that
the majority of food processors did not sign such commitments. Companies
committing themselves to avoid biotechs are predominantly those dealing
with organic products. As a result of circular mailings, Greenpeace
developed a purchasing guide for consumers in order to announce where to
buy non-biotech foods. Since the German food processing industry has
replaced biotech ingredients with other non-biotech products, such as
canola oil, Greenpeace is now focusing on the dairy industry. Greenpeace
would like to obtain commitments from the dairy companies that they will
require their supplying farmers not to use biotech containing feeds. A
prominent target for Greenpeace are dairy companies, in particular the
Mueller Milch company. Greenpeace used to stigmatize milk products of
Mueller Milch as 'gene milk'. A recent court ruling stopped this
denigrating campaign by Greenpeace.

Due to the long list of field destructions the seeds and biotech
industry as well as research institutes lost their patience with the
'activists' and now takes them to court with the intent to claim
financial compensation for the complete damage, not only the value of
the lost crop. Damages can easily add up to several million dollars.

# Section V: Capacity Building and Outreach

## Informational Visits to the U.S. and Speaker Programs

Since 1997, the FAS Office in Germany has sent numerous groups of policy
makers, scientists, representatives of consumer organizations, farm
leaders, journalists and other interested parties to the United States
to learn about the U.S. system for regulating gene technology.

In addition to these trips to the United States, FAS Germany organized a
number of speaker programs for U.S. biotech scientists and farmers to
inform interested parties in Germany about the experience in the U.S.
with biotech crops. The Agricultural Minister Counselor of the FAS
Office in Germany participated in a number of podium discussions and
seminars on biotechnology.

Most helpful for the success of biotech crops in Germany appears to be
farmer to farmer contacts on national and international levels. On June
16, 2006, 23 farmers from Northern Germany formed a Working Group of
Innovative Farmers (InnoPlanta AGIL) -- www.innoplanta.de. These farmers
are convinced that this technology will be a key technology of the
21^st^ century and play a growing role in world food production,
renewables development, energy, health, and environment. Most welcome
for German farmers is also the exchange of experience with experienced
North American farmers because this tells them that there are not only
the promises of the offering seed companies but also the positive
results for the farmers and the environment.

## Changes in the German Political Arena

Germany held federal elections in September 2005 with the result of a
new more conservative government formed by the Christian Democrats party
and the Social Democrats Party. For almost two years, leading
politicians of the conservative parties have expressed support for green
biotechnology. They are also very critical of the Green Party for
crafting a genetech law, which is seen as a hindrance to the
agricultural biotech industry. The persistent political support for
green biotech by the conservative parties has the potential to gradually
alter the underlying general skepticism of the general public with
respect to green biotech.

Even with the change in government, conservative politicians clearly
support the European approach of process labeling for agricultural
products. Consequently, labeling and traceability requirements remain in
place. What has changed is the general negative attitude towards green
biotech. The idea that biotech crops per se form a risk to health and
environment is possibly diminishing.

The change in government also provides the opportunity to alter the
overly strict regulations of the German genetech law. In particular,
liability and coexistence rules should be re-crafted to make them more
practical. It is the expressed goal of the conservative government to
make Germany a more hospitable environment for biotech research in order
stop biotech researchers and companies from leaving Germany.
Conservative politicians see biotech crops as an opportunity for the
production of crops for industrial use, mainly fuel crops. This would
avoid placing the biotech crop on the food shelf. Actually, conservative
politicians are exploring the option to demand a change of the biotech
labeling rules. They request that all products, which got in touch with
biotechnology in one way or another should be labeled as such. This
would include livestock products, enzymes, yeasts, and others.

With the change of the German government in November 2005, an increasing
number of German farmers are expressing their interest in the planting
of Bt corn varieties. They are aware that the corn borer poses a real
threat to their crops and Bt varieties are offering a promising
solution. For that reason environmental and product health advantages
experienced by producing farmers should be intensively communicated to
German and other European farmers. It could be most beneficial if more
European farmers are meeting with U.S. farmers to exchange their
experiences.

## White biotechnology

During the past year, politicians of almost all leading German political
parties expressed their support for white biotechnology. Even the Green
Party claims that this is a field of research and development, which
provides great opportunities to the German economy without expressing
noticeable risk to the environment and to health. As a result, this
branch of the German biotech industry seems to be faring better than
green biotechnology.

# Section VI: Reference Material

  ---------- ------------- ------------------------------------------------
  Report No. Date          Title

                           

  GM5041     12/19/2005    Bt Corn Varieties 2005

  GM5027     07/15/2005    biotech Annual

  GM5013     03/18/2005    Marginal Improvement of biotech Regulations in
                           Germany

  GM4051     12/03/2004    German Genetech Law and biotech Test Plantings
                           in 2004

  GM4042     10/18/2004    German Genetech Law Expected to be Passed

  GM4029     08/10/2004    European Commission not Happy with German
                           Genetech Law

  GM4023     06/25/2004    German Court Ruling against Greenpeace

  GM4019     05/11/2004    Agricultural biotechnology -- Recent
                           Developments

  GM4016     05//03/2004   biotech Wheat Test Plantings

  GM4015     05/03/2004    Aggressive Greenpeace Campaign against biotech
                           Labeled Food Products

  GM4014     05/03/2004    German Farmers' Interest in Planting Bt-corn
  ---------- ------------- ------------------------------------------------