China’s Silence Over GMOs Sends Biotech Company to U.S.

A Beijing, China-based agritech company, Origin Agritech was planning on launching China’s first seed company on its home turf, but with the country feeling uneasy about biotech seed sales, and the recent news concerning Monsanto’s RoundUp containing a likely-carcinogen, Origin will test its seed technology in the US instead. [1]

Months ago, Chinese firm China National Chemical Corp (CNCC) showed its eagerness to enter the international biotech market, but after a failed attempt to fast-track its plans with a bid to purchase the Swiss-based Syngenta (just after Monsanto tried and failed), the company also found that officials in Beijing are not excited to host field trials of GM products, namely GM maize. This was to be the first home-grown GM product in China meant for a world market.

This doesn’t mean that China is completely against genetically modified foods. The country’s track record is a little more schizophrenic – with billions of dollars being spent to develop GM technology aimed at feeding 1.4 billion people. On the other hand, no major GM food crops have been given approval for cultivation. The country has also seen bumper harvests with non-GM seed in recent years, so the reliance on biotech’s promise of ‘more food’ with GMOs seems unnecessary.

Consumer attitude toward GM crops are another hurdle for the company to overcome. Huang Dafang, professor at the Biotechnology Research Institute under the Chinese Academy of Agricultural Sciences, says:

“Consumer attitude is one thing, but the government attitude is even more important.”

Origin may have to look overseas for customers who want to consume its product.

U.S.-listed Origin has invested more than 300 million yuan ($46.90 million) in biotech since 2005 and, without an opportunity to market its product at home, it now plans to enter the United States in 2016, according to a presentation on the Securities and Exchange Commission website.

Entering the U.S. market could take several paths from licensing its technology to setting up a unit here, Origin’s chief financial officer, James Chen, told Reuters.

We’ll see if Monsanto, Syngenta, Bayer, and Dow Chemical allow Origin to get their feet in the door, or if another hostile takeover will be attempted, as it was with Monsanto’s attempted purchase of Syngenta.

Origin’s most advanced technology has resulted in a corn with two different ‘traits’ meant to resist pests, but Monsanto has already developed corn that has up to eight traits combined in one crop.

Carl Pray, professor at Rutgers University’s agricultural, food, and resource economics department, said:

“The only way they might be able to break into the market is if their technology fees are going to be cheaper than Monsanto.”

We do know the U.S. is friendly to the biotech industry as far as regulatory approval goes, so if Origin has nothing else to gain, they can likely get approval for the commercialization of its products through the USFDA, as Chinese government officials are more hesitant.

Sources:

[1] Reuters