POTATO, THE NEW GLOBAL TRAVELLER
Over the last 30 years, the spectacular rise of the fast-food and processed food markets has come to dominate patterns of potato growing in Western Europe, the US and Canada. The share of the crop destined for fresh consumption has been decreasing steadily, and now stands at 26% in the US, 18.5% in the Netherlands, and a mere 2% in Flanders, Belgium. Instead, potatoes are destined to become pre-cooked frozen french fries or potato chips. Alternatively, they may be dehydrated, canned or used to produce flour or starch for an increasing number of industrial applications.
In 1998, 90% of frozen fries in the US were sold by fast food outlets. The market is extremely concentrated, with only three companies (J.R. Simplot [a major supplier of the main french fry outlet, McDonalds], McCain Foods and Lamb Weston [owned by food giant ConAgra]) accounting for almost the entire North American market. This concentration grants potato processors a high degree of control over the crop, and forces potato farmers in the vulnerable position of being contract growers. The processor contracts farmers to grow given varieties under given conditions, and a price for the harvest is set before the season begins. This is a high-risk strategy for farmers because the crop is highly prone to disease and reliant on the use of agrochemicals (see "Potato: a Fragile Gift from the Andes", Seedling September 2000, Vol. 17, No 3). In Europe supermarkets are extending contract growing to table potatoes as well as those destined for processing.
Parallel breeding strategies
The sustained growth of the potato processing sector has attracted the efforts of potato breeders. Their priorities have included building resistance against pests, diseases and abiotic stress on one hand, and fulfilling industry quality requirements (tuber size and shape, dry matter and sugar content, sensitivity to cold, discolouration and bruising, and starch structure) on the other.
The similar patterns which have emerged in Western Europe and North America in terms of breeding goals, industry-led production and contract growing have converged from very different breeding strategies in the two continents. While in Western Europe potato breeding has been the concern of the private sector, in the US the public sector has taken the lead. The Dutch potato seed sector is a good example of private sector-led development. Dutch potato seed companies control 70% of the international certified potato seed trade. Two co-operatives, Agrico and HZPC, account for 80% of this market share. There are 250 Dutch potato varieties, 169 of which the country exported in 1994.
The Dutch have achieved their dominant position by specialising in developing new varieties suitable for export and then monopolising their use. This has been achieved by asserting protection via Plant Breeders Rights (PBR), which lasts up to 30 years. Some 80% of the potato seed exported by the Netherlands in 1996/97 was protected by PBR. In contrast, sales in the national seed market are dominated by certified seed of varieties in the public domain, where competition makes profit margins much lower. PBR has led to concentration of the international potato seed market, which in turn gives the companies a strong bargaining position in countries such as Spain, where imported seed potato accounts for around 70% of total consumption. This translates into high prices and restricted access to varieties.
In contrast, large potato seed companies are absent in North America, where public breeding programmes continue to dominate production. Only one company, PepsiCos Frito-Lay, is involved in breeding. Publicly developed varieties are released free of charge. One consequence of this is that farmers there are not used to paying royalties for new varieties, and show little interest in buying Europes PBR-protected varieties.
This means that Europe and the US have quite different potato portfolios. Another is that until recently, there has been little accumulation of capital in the US potato seed industry, so that most seed has been produced by independent growers who are able to sell directly or through a broker. But the entry of the biotech giants into the potato market, particularly Monsanto, is rapidly changing this scenario and weakening the position of the grower (see below). Public sector breeding has been fairly prolific: between 1932 and 1994, the United States and Canada released in average about five varieties every year: some 259 altogether.
In both Europe and North America, breeding programmes have released varieties that foster intensive farming practices and have greatly exacerbated genetic uniformity (see Seedling, September 2000, Vol. 17, No 3). Market leaders Russet Burbank (US) and Bintje (Europe) are highly susceptible to virus, blight, nematode and fungus attack and their cultivation relies on heavy pesticide use. But they have very good qualities for the processing industry, which to a point has developed around them The costs associated with adapting processing machinery to new varieties has also contributed to growers reluctance to adopt greater potato diversity in the crop that they plant.
It is possible that public concern about pesticide use may change the parameters determining variety choice. In Europe, pressures from the large supermarkets are already leading to farmers being required to maintain logbooks on pesticide applications. In the near future, Integrated Pest Management criteria may also be required, which will necessitate the introduction of disease-resistance potato varieties. These are likely to be PBR-protected varieties from the potato seed industry. The substitution of old, public domain varieties with protected varieties would shift the balance of power between potato seed producers and processors back towards the seed industry. But if genetically modified potatoes start to make a big hit on the market, a whole new set of players will appear on the scene.
A big hit with the engineers
Potatoes and genetic engineering have a special relationship. Because of the relatively ease of introducing foreign genes in the potato genome through infection with Agrobacterium tumefaciens, the potato has long been a favourite amongst genetic engineers. An analysis of patent applications indicates that it is not the potato seed companies, but the agrochemical and seed giants, which are leading the way in genetic engineering (see table). Top patent applicants also include large public research institutions (the Max Planck Society and the Cornell Research Foundation), a large chemical group (ICI), an specialised biotech company (Advanced Technologies) and a food processor (Danisco). Most of the 112 patent applicants left hold just one patent application. Somewhat surprisingly, none of the large Dutch potato seed companies have patents on transgenic potatoes, and only two big processors the Dutch Avebe and the US Simplot hold patents of their own.
Main patent applicants on genetically modified potatoes
The predominance of the agrochemical and seed giants in transgenic potato production has arisen for several reasons. Many patents cover technologies that are to be used in a number of commercial crops, not specifically the potato. Some of the potato-focused patents have arrived via corporate acquisitions. Aventis inherited Plant Genetic Systems patents and Advanta group acquired those submitted by Mogen, a Dutch biotechnology company. In addition, some agrochemical companies had undertaken their own R&D. Monsanto has focused on virus and insect resistance, while Aventis parent company AgrEvo has filed patent applications on potatoes with altered starch content. The priority for research has been to counter the crops susceptibility to infection, pests and stress, rather than quality traits.
Narrowing objectives: field testing
Field tests of transgenic potatoes have been reported in the United States, Canada, European Union member countries, Argentina, Brazil, Egypt, India, Mexico, Peru, Russia, South Africa and Ukraine. In the US, field test leaders are Monsanto (68%), the Agricultural Research Service of the US Department of Agriculture (9%), and Frito Lay (8%). Potatoes engineered with Bacillus thuringiensis (Bt) toxin against the Colorado Beetle have accounted for 48% of all potato field tests, with virus resistance the next most favoured trait (see table opposite). Monsanto has conducted 158 field tests on Bt, virus-resistant potatoes. All field tests involving potatoes with altered product characteristics have been undertaken by Monsanto. Up to December 2000, three transgenic potatoes had been authorised for commercial release in the United States, all belonging to Monsanto. They are Bt NewLeaf TM, Bt and potato leaf roll virus-resistant NewLeaf Plus TM), and Bt and potato virus Y-resistant NewLeaf Y TM.
In the European Union (EU), the field test scenario is different. From October 21, 1991 to January 10, 2000, there were 164 field tests involving transgenic potatoes. In contrast with the US, half of these involved an alteration in potato starch content, while insect, virus and fungal resistance accounted for the other half. The potato seed industry has also conducted field tests, mainly on the amylose-free potato developed by Avebe. Other players have included public high-tech centres (the Max-Planck Institute and the Scottish Crop Research Institute), small biotech companies and agrochemical giants Aventis and Advanta. The private sector has also dominated field testing in the European Union. As of December 2000, no transgenic potato had been authorised for commercial release in Europe. Avebes amylose-free potato, designed for industrial application, was not allowed in the market because it contains a gene coding for resistance to amikacin, an antibiotic.
A global future
The promotion of Northern culinary tastes is pushing potatoes onto the international market. The most evident expression is the rapid expansion of the fast food sector. McDonalds, the sector leader, has increased its outlets outside the US from 2,344 in 1987 to 11,320 in 1998. In 1996, its main competitor, Tricon Global Restaurants (owner of Kentucky Fried Chicken, Taco Bell and Pizza Hut) had 8,620 outlets in some 95 countries.
As international markets for processed potatoes are increasing, so is the pressure for countries to import potato tuber seed. In 1997-1998, Africa accounted for nearly 20% of the Dutch seed industrys potato seed exports. Much of this market is based in off-season production for export to the EU. In 1998, Egypt exported 228,467 metric tons valued at US$ 43.2 million mainly to Europe and the Arab countries. New targets for potato seed exports include Eastern Europe, Asia, Oceania, West Africa and South America. Dutch efforts to increase potato seed exports have not gone unrewarded. In June 2000, Dutch seed companies were the first foreign companies to be allowed into China. "Today we are opening up a continent," announced the Dutch Seed Association in its press release. The potatoes that are to be introduced will be grown by US Simplot and Dutch Farm Frites, and will be processed into chips near Beijing.
Transgenic potato traits field-tested in the US up to August 2000
Source: APHIS Biotechnology Permits Database, http://www.aphis.usda.gov/bbep/bp/database.html
The European seed sector is turning potato seed into a global traveller. The US has not traditionally focused on export markets, but this is likely to change in the near future. The traditional isolation of the European and the North American potato sectors will be broken as they compete for international markets. What the outcome of the competition between these publicly-funded and private breeding strategies will be remains to be seen.
In Europe, the strengthening of environmental standards in potato cropping could result in a massive increase in PBR-protected varieties. This would put the seed companies in a position to exert greater influence on European processors at home and abroad. Another key factor determining the future control of potato production will be the degree of adoption of transgenic potatoes, which are currently owned by actors other than European private and US public breeders.
Because potato is such a vulnerable crop, insect, disease and stress-resistant transgenic potato varieties are potentially huge money-spinners. This is the reason why Monsanto has been pushing its insect-resistant and virus-resistant transgenic potatoes very aggressively in the US and beyond. Monsanto has introduced its NewLeaf potatoes in Ukraine, without either prior environmental assessments of the potential adverse impacts of these potatoes, nor the consent of either the Environment or Health ministries. Different NewLeaf varieties have been field tested in Russia, and they have also been introduced in Georgia.
Up to now, the European potato seed industry has relied on agreements with specialist biotechnology companies to conduct patent-protected genetic engineering research. But if genetic engineering evolves into the main tool for developing new varieties, European seed breeders may need to develop their own transformation technologies in order to maintain their advantage. The European potato seed industry is most likely to bear these concerns in mind when dealing with the hot potato of genetic engineering. All eyes are on Monsantos fate. Public opposition to genetic engineering led McCain Foods, Lamb Weston and Simplot, the largest french fry manufacturers in North America, to refuse to buy genetically modified potatoes. NewLeaf potatoes labelled as genetically engineered failed to impress the Canadian public. Concern about public rejection is leading the Dutch potato seed industry to "wait and see" before they push transgenic potatoes onto the market. They even seem prepared to drop them altogether, which is probably not an option for Monsanto.
Many factors including the extension of plant breeder protection, the power allocation between the seed and the processing sectors, and the adoption or shunning of genetic engineering will influence on the future development of the potato. But one thing is for sure: the potato is increasingly becoming bought and controlled by industry. The potato is shifting from being an important family staple to an industrial material. Not only will the potato look and taste different, but this shift will imply dramatic changes in the way in which the potato is produced and in the livelihoods of potato growers around the world.
Potatoes Briefing Room, Economic Research Service, United States Department of Agriculture, http://www.ers.usda.gov/briefing/potato/index.htm
GJ Scott and L Maldonado (1998) "Globalisation Takes Root: Potato Trade in Latin America", CIP Programme Report 1997-1998,
R Plaisted et al (1994), "Potato Improvement by Traditional Breeding and Opportunities for New Technologies, in Eds WR Belknap et al, The Molecular and Cellular Biology of the Potato.
NIVAA web page http://www.nivaa.nl