Wall Street Worried Over
China Bt Cotton Problems

June 4, 2002

Row Erupts In China Over Impact Of Transgenic Cotton
-By Phelim Kyne, Dow Jones Newswires
DOW JONES NEWSWIRES

BEIJING -- A Chinese government-funded report that alleges genetically
modified Bt cotton strains introduced by U.S. agribusiness giant Monsanto
(MON) have damaged the environment and provide few long-term agricultural
benefits has provoked protest within China's scientific community.

The report, produced by a State Environment Protection Administration
research institute in cooperation with international environmental lobby
group Greenpeace, argues Monsanto's Bt cotton has destabilized China's
insect ecology and caused continued farmer reliance on chemical pesticides.

The research study, cited in the official China Daily newspaper, found that
genetically modified Bt cotton, designed to control bollworm, is encouraging
the spread of other types of insect pests.

The study by the Nanjing Institute of Environmental Sciences also concluded
that cotton bollworm will possibly develop resistance to the genetically
modified cotton within eight to 10 years.

"The Chinese government has a role in helping the international community to
ensure that corporations such as Monsanto are held liable for the damage
they are causing by having developed and released (genetically modified)
crops," a Greenpeace press statement said, referring to the study.

However the report's findings have been contradicted by other Chinese
biotechnology researchers.

China Academy of Sciences is understood to be currently preparing a paper
for China's leadership that refutes the allegations in the Nanjing study and
chastises the State Environment Protection Agency for working with
Greenpeace.

The controversy is only the latest to affect China's attempts to regulate
genetically modified agricultural products and agricultural biotechnology.

Since January, four government ministries in China have implemented or began
formulating rules to regulate the import of genetically modified organisms,
or GMOs. April 1, China banned investment by foreign companies such as
Monsanto in joint venture GMO seed development projects.

The study at the center of the row estimates 1.5 million hectares, or 35% of
China's total cotton crop output, consists of Bt cotton. Two thirds of that
Bt cotton has been supplied by Monsanto.

Monsanto's Beijing office declined direct comment on the report, referring
to a report by the director of China's Center for Biosafety Research, Peng
Yufa, that contradicted the findings of the SEPA/Greenpeace research.

The veracity of the Nanjing study was also disputed by the inventor of
Chinese Bt cotton, China Academy of Sciences Professor Guo Sandui.

"Greenpeace is absolutely ignorant about genetically modified cotton and
doesn't know how to protect the environment," Guo told Dow Jones Newswires.

"Through development of GM cotton, we can reduce the use of pesticides by
more than 80%...and can reduce pesticide poisoning cases by 90%," he said.

-By Phelim Kyne, Dow Jones Newswires