by Lisa Shumaker

CHICAGO - Trace amounts of genetically modified varieties of rice that were found commingled in the U.S. rice supply in 2006 caused more than $1.2 billion in damages and additional costs, the environmental group Greenpeace International said on Monday.

U.S. rice exports fell sharply after Bayer CropScience, a division of Bayer, reported in 2006 that trace amounts of its biotech LibertyLink rice variety LLRICE601 were found in a widely grown variety of U.S. rice called Cheniere. Later, a second variety called Clearfield 131 was found to be contaminated with LLRICE604.

"Until we've seen the report, we really can't comment," said Bayer spokesman Greg Coffey.

The discovery of GMO-tainted rice triggered the largest financial and marketing disaster in the history of the U.S. rice industry, according to Greenpeace. At least 30 countries were affected by the contamination and many closed their markets to U.S. rice, including major importers such as the European Union and the Philippines.

The overall cost to the industry, estimated at $1.2 billion, included losses of up to $253 million from food-product recalls in Europe, U.S. export losses of $254 million in the 2006/07 crop year and future export losses of $445 million, Greenpeace said.

"It's impossible to know what the cost is," said David Coia of trade group USA Rice Federation. "It's certainly the most significant event in the history of the U.S. rice industry. The current rice crop is in pretty good shape. We've been able to eliminate most of the genetically engineered material."

Hundreds of U.S. farmers and European businesses have filed lawsuits against Bayer in attempts to recoup their losses, said the environmental group.

Greenpeace is urging India not to go ahead with field trials of GMO varieties because it could risk suffering a similar contamination and loss of exports.

A lengthy U.S. investigation failed to pinpoint how the biotech rice entered the U.S. supply. However, all three varieties of rice were grown at a research station in Louisiana from 1999 to 2001.
© 2007 Reuters