LONDON, Sept 17 - Genetically modified crops in North America have been an economic disaster, which has caused some farm groups there to call for a moratorium on GM wheat, the next proposed crop to be altered, a report released on Tuesday said.

The study by the Soil Association, Britain's leading organic organization, estimated that gene-altered maize, soya and rapeseed may have cost the U.S. economy $12 billion since 1999 in farm subsidies, lower crop prices, loss of major export orders and product recalls.

Scientists have said that the advent of such crops could be the answer to world hunger, but the report said claims of increased yields have not been realized overall -- except for a small increase in some maize yields.

The report said farmers are not achieving the higher profits promised by the biotech companies as markets for GM food collapse, citing widespread GM contamination at all levels of the food and farming industry as the source.

"Within a few years of the introduction of GM crops, almost the entire $300 million annual US maize exports to the EU had disappeared, and the US share of the soya market had decreased," the report said.

"The lost export trade as a result of GM crops is thought to have caused a fall in farm prices and hence a need for increased government subsidies, estimated at an extra $3-$5 billion annually," it added.

MORATORIUM

It found that severe problems with gene-spliced crops has led more than 200 groups representing farmers and the organic sector in North America to call for a moratorium on the introduction of GM wheat.

For the last several years, leading biotech company Monsanto has stressed the benefits its genetically modified Roundup Ready wheat can bring to farmers.

The herbicide resistant strain, for which Monsanto is currently seeking regulatory approval, could mean efficiencies and potentially higher yields for farmers, according to the firm.

Public opinion in Europe is wary of gene-altered crops after a string of food safety scares, including mad cow disease, and there is a three-year de facto ban in place on approvals of new GM varieties.

Soil Association Director Peter Melchett said the report came as a timely note of caution to Britain ahead of a decision due next year on whether to commercialize GM crops following its three-year field test program.

"With UK agriculture still suffering a deep economic crisis, the temptation to seize a new technology is great," he told the media at the report's launch.

"GM technology was introduced to the USA when farmers were financially vulnerable. The biotechnology industry's claims that their products would bring benefits were widely accepted, but GM crops have now proved to be a financial liability," he added.

Melchett said he hoped the report would result in a better informed public debate, and a more independent, less pressurized decision about the commercialization of GM crops in the UK.

Britain's government formally launched a public debate on the issue earlier this year, but trust in biotech companies took a battering recently with the disclosure of small impurities in field trials for oilseed rape, which threatened to derail the government's field trial program. on the environmental impact of such crops.

The blunder also prompted UK environment minister Michael Meacher to break with the government's broadly GM-sympathetic government line, saying that the country was being pressured by the U.S. to allow commercial planting of gene-spliced crops.

"I do think it's right that there are people in the government who are beginning to see that you cannot both promote organic farming and promote GMO's at the same time," Melchett said.

Copyright 2002, Reuters News Service

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