Crouching agribusiness, leaping soybeans

G.M. soy is colonizing China. Is Archer-Daniels-Midland easing the way?

Published June 2, 2006 6:20PM (EDT)

One sentence shouldn't undermine an entire paper, but I was a little disconcerted to read the following passage in an otherwise interesting new study, "China's Relations With Latin America: Shared Gains, Asymmetric Hopes":

"[Brazil] supplies 30 percent of China's total soybean imports ... Brazil is the world's second largest producer of soy after the United States. Soy is genetically modified in the United States but not in Brazil; China prefers genetically unmodified soybeans."

There are a couple of problems here. First, while Brazil long maintained a stance against genetically modified crops, and certain states still ban their farming or even transportation, the Lula administration started lifting restrictions on G.M. soy in 2003 and removed all national prohibitions in 2005. Production has been growing like gangbusters. Second, while China does prohibit domestic farming of G.M. soy, it has no such ban against imports. China is, in fact, the world's largest market for biotech crops grown in the United States.

And therein lies a little story. The soybean plant is native to China, where it has been farmed for thousands of years. For centuries, China dominated worldwide soybean production, until it was overtaken in the 1950s by the United States. In 1996 China became a net importer of soybeans -- most of which are genetically modified to resist herbicides.

China is reluctant to plant its own G.M. soy not because its own citizens have expressed any distaste for it -- there's little evidence of that -- but because consumers in Japan and the European Union have made it very clear that they prefer non-G.M. soy, which means there are potentially valuable markets for Chinese soy farmers, provided they keep their soy untainted. But with the huge amounts of imported GM soy flooding processing facilities, keeping domestic soy clean may be impossible.

The most intriguing aspect of this story has to do with the processing facilities in China that transform soybeans into the multitude of products that line supermarket shelves. In the U.S. politicians have gotten awfully prickly about the prospect of the Chinese buying American corporations. But globalization cuts both ways, and in China, there's a similar sensitivity. According to one report, the American agribusiness giant, Archer-Daniels-Midland, already controls one-third of China's soybean processing facilities.

That same report quoted an anonymous Chinese scientist as noting that demand from the processing facilities, not consumers, was pushing forward imports of G.M. soy. Another report indicates that China's soybean-growing regions are actually experiencing an oversupply of soybeans. But not of the kind of soybeans that the processing facilities want. Imported G.M. soybeans are reportedly cheaper, have a higher oil content and lower transportation costs.

It is one of the miracles of globalization that soybeans farmed in the American Midwest are cheaper for Chinese processing plants than soybeans grown in China. But it's also a a latter-day taste of 19th century-style extraterritoriality. China is the ancient home of the soy plant, but today, foreign-owned soy processing plants are propelling the importation of G.M. soy from across the sea. Can domestic soy farmers compete without themselves moving into genetically farmed soy? And what would the potential spread of monoculture, Roundup Ready Monsanto soy mean for the thousands of wild strains of soy native to China?

Brazil, for the most part, has given in to the likes of Monsanto, swayed by the cost advantages of G.M. soy. Will China be next?

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

MORE FROM Andrew Leonard

Related Topics ------------------------------------------

China Globalization How The World Works