NEW YORK (Reuter) - Armed with seeds impervious to pests or disease and able to promise crops that can survive scorching heat or freezing temperatures, a handful of companies are set to revolutionise the agriculture industry.
Biogenetics -- the science of adding or manipulating genes to achieve particular traits -- has already begun to change the way crops are grown, marketed and consumed, analysts say.
"We have begun an evolution or a revolution,'' said Leonard Teitelbaum, a food and agricultural products analyst with Merrill Lynch. "You decide.''
Seeds for cotton, corn, and soybeans contain genes that can resist insects, potentially saving farmers billions of dollars in pesticide costs and reducing chemical runoff from fields into water supplies, "biotech'' proponents say.
Critics argue that companies are using consumers as guinea pigs for genetics testing, and warn that tampering with nature will lead to a host of health and environmental risks.
Such protests may grow. With only a limited number of products on the market so far, new seed technology is expected to increase exponentially over the next several years.
"This is the first large year of commercial rollouts for genetically engineered corn, and the second year for cotton and soybeans,'' said NatWest Securities analyst Mark Wiltamuth, who said sales were up considerably this year from last.
Monsanto Co.'s Bt cotton, which resists caterpillar-type insects, accounted for 16 percent of the nearly 19 million bales of cotton produced in the United States last year, making it the largest agricultural product introduction in history, Wiltamuth said.
"I am planting all of my acres with Bt cotton this year,'' said Kenneth Hood, a Mississippi-based farmer who was one of 5,600 U.S. growers to plant the seeds last year.
He said that Bt cotton cost $32 per acre compared with $12 for conventional seed, but that it also allowed him savings on pesticides, herbicides and fertilisers.
"You're paying on the front end but as long as it does the job it's supposed to do environmentally and economically, it is better than the old scenario we farmed under,'' Hood said.
Consumers can expect several new products in the next few years from technology leaders like Monsanto, Pioneer Hi-Bred, Dekalb Genetics Corp., Mycogen and Novartis.
Monsanto is developing Bt corn, which carries a gene that resists the corn rootworm. DeKalb will introduce ``Roundup Ready'' corn next season, following brisk sales of Roundup Ready soybeans, which were developed by Monsanto. The line of products enhance the effect of Monsanto's powerful and popular Roundup herbicide.
Other products in the works include genetically altered wheat that promises a 15 percent to 20 percent rise in yield, and high-stearate soybeans, which yield an edible oil with a healthier fatty-acid content.
"People are spending a lot of money,'' said Wiltamuth, who estimates that agricultural biotechnology will add over $1 billion in sales to the seed industry in the next five years.
The potential for biogenetically engineered crops has already fed a corporate merger frenzy in the seed industry.
Kenneth Lee, a partner with Ernst & Young, said that with developmental costs so high and an average 10 to 12 years before a company turns a profit, many small firms do not have the resources to survive alone.
In the past 18 months, St. Louis-based Monsanto has acquired 40 percent of DeKalb, seed researchers Agracetus, for $150 million, and Asgrow for $240 million. It also bought remaining shares in Calgene Inc. for $240 million and Holden's Foundation Seeds for $1.02 billion.
Pioneer has bought a stake in Mycogen, while Novartis was formed in a merger of Swiss giants Ciba-Geigy and Sandoz.
Biotech opponents see the mega-merger trend as a threat to farmers and consumers, with consolidation and fewer seed suppliers viewed as healthy for profits but not for consumers.
Critics have also gained attention by playing on consumer doubts, charging that genetically altered crops will cause new allergies, mix with natural species and create antibody resistance in animals that consume them.
"What you are doing by releasing these foods is conducting a giant experiment on the public and hoping that there are no complications,'' said Bill Barclay, a biotechnology specialist with Greenpeace International.
Manufacturers are not required to submit scientific research on a product's safety or even tell consumers that a food has been altered genetically, according to the U.S. Food and Drug Administration, which oversees new food products.
FDA biotechnology specialist Jim Maryanski said companies generally discuss research plans with FDA at an early stage.
"They are not legally required but encouraged to do that so everyone has a sense of what is changing in the food supply and what the impact is,'' Maryanski said. "There are checks and balances.''
Last week, the European Union passed a law requiring all genetically altered food be labeled -- a position that both the U.S. government and agricultural community opposed strenuously.
