Prepared Testimony of Hendrik Verfaillie

Mr. Chairman, Members of the Committee.

Good afternoon, I’m Hendrik Verfaillie and I’m the President and Chief Operating Officer of Monsanto Company.  Monsanto, headquartered in St. Louis, Missouri, is a life sciences company committed to finding solutions to the growing global needs for food and health by sharing common forms of science and technology among agriculture, nutrition and health.

As a Belgian who has lived, raised a family and worked in this country for over 20 years, it is a high honor and privilege to be here today, and to represent both Monsanto and the biotechnology industry.

I want to share with you our vision and experience about the benefits and potential of agricultural biotechnology.  There are three points about agricultural biotechnology that I wish to make:

First, it  is directly and dramatically benefiting farmers and the environment.

Second, the industry is driven both by our growing technological capabilities and by growing global pressures to produce more food on less land and in ways that are more efficient and environmentally sustainable.

Third,  while the current benefits strongly favor the farmer, American and global consumers will be the ultimate beneficiaries of this technology.

Let me begin by putting agricultural biotechnology into context.  Since humans first cultivated seeds, over 10,000 years ago, they have tried to improve plants.  Though it has taken hundreds of years and hundreds of plant generations, farmers have always bred  new plant varieties and created new foods and crops that deliver greater yields and more useful traits.   Almost everything we eat today is the result of this successful process of improvement over time -- a successful process, albeit one that is hit and miss one.

However, from Gregor Mendal in the 18th century through the discovery of DNA by Watson and Crick in the 20th century, we have continued to learn a great deal about biology and how genes work.  As a result, we can now be more precise and efficient in how we create new varieties and traits, and how we farm.  Rather than rely on randomly crossing thousands of genes in the hope of creating a new, desirable trait -- or possibly and unknowingly creating a harmful trait -  we can  now be far more selective for the specific traits we want.

For example, we can take a single gene that expresses a desired trait - like disease resistance --  and place that gene in a seed, creating a plant better able to defend itself.

Biotechnology is a technology of information management, taking the information contained in the genetic sequence of a plant and expressing it in new and beneficial ways.  Crucially, it is unlike any other high-technology on the market today.  A new computer chip or software program, for example, can come to the market and recover the development investment relatively quickly.  Biotechnology innovations take considerably more time.

Over 20 years ago, pioneering Monsanto scientists convinced company executives, like me, that biotechnology could create better crops and agricultural products. To bring the first crops to market required years of safety and environmental tests, reviews by EPA, USDA and FDA, and hundreds of millions of research and development dollars

Just three years ago, we finally brought the first genetically modified plant to market -
a herbicide resistant plant that makes it easier for farmers to manage weeds and increase yields in a less labor intensive ways.

Today, as a result of our growing understanding of biology, new agricultural products offering greater consumer benefits are delivering an ever-wider range of benefits more efficiently and without environmental harm.

For example, we can produce crops that fight insect and bacterial pests; that  enhance the vitamin and nutrition content of the plant; and, that grow in adverse conditions - such as in highly salinated ground or arid conditions.

One potent example of the practical power of this technology is Hawaii’s papaya crop - once  threatened by a deadly virus.  Through biotechnology, papaya plants were created with a gene able to resist this harmful virus.  Today, this agricultural industry, made-up mostly of small growers and once on the verge of extinction, is beginning to flourish again.

American farmers are choosing and planting biotechnology improved crops in record numbers - over 65 million acres nationwide.

In fact, Mr. Chairman, 47% percent of the cotton crop planted in Florida is genetically improved insect resistant seed - 55% percent nationwide.

If you could walk through the fields with me you would see a remarkable change in the way America farms.  You would see farmers using fewer agricultural chemicals to protect and nurture crops - this means fewer chemicals in the soil and in the water runoff.   In fact, recent studies by the USDA and other organizations show that, nationally, farmers used over 2 million fewer pounds of agricultural chemicals.

You would see farmers using fewer natural resources - gas for tractors, chemicals for fertilizers - to grow and harvest crops.

And, you would see farmers reaping greater yields and potentially earning more profit even in a slow farm economy.

The reason these benefits are so important has much to do the forces that are driving future development of agricultural biotechnology.

Currently, 6 billion people live on Earth.  In twenty five years, there will be eight billion.  These are people that must be fed.  Additionally, they deserve the same things that we want for our own children --  something more than mere subsistence  -- a chance to grow, thrive and contribute.

To feed this additional two billion people will require global agricultural production to increase by 75% percent.

Today, nearly six million acres of arable land - an area about the size of South America - are farmed to feed the world.  Experts agree that this is about the limit of available arable land.  Feeding the world in 2025 will require almost 15 million acres - about the size of North and South America combined.

Meeting this challenge with conventional and traditional agricultural technologies is problematic.  Creating the arable land we need to grow sufficient food will require consuming sensitive ecological resources such as forests, wetlands and deserts.  For most people, this is not an environmentally sustainable solution.

Or, we can try to bring new tools - like agricultural biotechnology - to bear.

Biotechnology is not a solution in and of itself - government and market reforms, better processing and distributions efficiencies, as well as empowerment of local farmers are all critical.  However, without the benefits of plant biotechnology, the challenges ahead will be difficult  - both for the United States and for the globe.

Today, American farmers play a critical role in feeding the world.  Nearly 17% of global food exports originate here.  Their importance will not diminish in the future.  It will  only increase as more efficient, effective and safe production methods are needed.

I opened my remarks speaking about how American farmers benefit from agricultural biotechnology.  But, it is consumers who are the ultimate beneficiaries.

The benefits of the first generation of agricultural biotechnology products accrued mostly to farmers - and I would argue that that in of itself is a good thing.  However, next generation of products -  those beginning to come on-line today - will directly benefit the health, nutrition and well being not only of American consumers, but global consumers of American agricultural products.

Let me cite some examples:

high stearate soybeans -- no hydrogenation is needed to produce margarine or shortenings, and it eliminates transfatty acids and lowers cholesterol and other health risks.

oilseed plants with elevated vitamin levels - such as vitamin A - that will help prevent millions of  cases of  blindness and reduce infant mortality resulting from vitamin A deficiency.

We are proud of this achievement and it is so important that we donated the technology to the USAID and other development groups so that it gets to people in need as soon as possible.

Bt Corn for controlling Corn Bores and -- according to Iowa State University --   reducing mycotoxins.  Mycotoxins are  potentially hazardous substance to both human and animal health, released by fungus that grow where Corn Bores damage the corn plant.

Additionally, products will soon be available that lower blood pressure or that contain antioxidants that may help prevent cancer as well as products with nutrients to help fight heart disease - particularly important traits as America’s population ages.

Further, as our abilities and understandings improve, we will be able to provide health and nutritional products tailored to meet a consumer’s special diet and nutrition needs.

The US biotechnology industry and market is, by far, the world leader. With over 140,000 people employed in the United States directly in biotechnology, it is not just an industry of the future, it is an industry of today.  The positive impact of this growth can be felt nationwide.  For example, in Massachusetts, we recently created a genomics alliance between Monsanto and Millennium Pharmaceuticals Inc.  This venture will apply genomic technologies to the discovery and development of plant and agricultural products.  It will also encourage innovation and new, emerging business.  Today, this project employs over 100 people in high-paying, high-tech jobs.  Tomorrow, the benefits of the discoveries made by this alliance will benefit the economy of the entire region and country.

However, it takes 8 to 10 years to bring a new product to the market and the investment is substantial.  Research and development costs are growing - over $9.4 billion in 1997 alone (according to the OECD).

To maintain global leadership, industry, consumers and policy makers must continue to work together.  Regulatory processes and programs must be constantly revisited and refined as the technology changes and progresses.  Research and development tax credits - which you, Mr. Chairman have so admirably championed -  should be extended to encourage further growth and innovation, new ideas and new businesses across the industry.  We must also prepare our children with the scientific education and skills needed for the jobs being created.

Today, as we speak, this industry is still in its infancy - there are possibilities and benefits that we’ve not yet contemplated.  There are also challenges - both of public acceptance and understanding  -- that we’ve not yet met.

Public confidence in the safety, science and oversight of this technology is critical.  When that confidence is challenged - as we see today in Europe - issues such as trade and suspicion dominate the public discussion.  We recognize our responsibility both to hear the concerns that are raised about this emerging technology and to act to meet those concerns.  We also must reinforce the strong scientific verification - including years of testing and regulatory oversight - that has made agricultural biotechnology safe, healthy and environmentally sustainable.

Working together with Congress, our customers, consumers and scientist we are committed to cement the exemplary health, safety and environmental record achieved by our industry.

The challenges are many, yet we are proud that the benefits of this technology - for both farmers and consumers - are both clear and growing.  And, also, as a leading pharmaceutical  manufacturer, Monsanto joins with our colleagues at the table to underscore the potential and power of  pharmaceutical biotechnology to improve human health through better drugs and medical treatment.

We are willing and eager to work closely with you, Mr. Chairman, and with Congress to create an environment that will encourage and enhance this emerging industry.

I look forward to answering your questions.