Business Forum: Real impact of 'Monsanto Protection Act' is modest

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If you have read anything about the "Monsanto Protection Act," chances are what you have read is wrong.

The provision in question was part of a wide-ranging bill to keep the government funded that President Barack Obama signed into law in late March. Its horrified opponents think the legislation will furtively protect biotechnology companies, such as Monsanto Co., from legal action if they produce genetically modified organisms that have harmful side effects. They argue it would make federal courts "powerless to stop Monsanto," and claim it was produced in a "hidden backroom deal" and "snuck" into budget legislation. Oh, and it also "shreds the Constitution."

Actually, the law, which expires Sept. 30, leaves both courts and federal regulators free to pull products they find dangerous. And the law's real impact is modest. Let's say that the Agriculture Department, after a laborious process of review, has allowed the sale and use of a genetically modified organism. Let's say that a court then finds, perhaps several years afterward, that the department didn't follow the proper process in deciding to allow it. Under those conditions, the law says farmers are still allowed to use the product, pending a final determination.

In fact, we don't need to imagine this scenario because it happened in real life and led to the law's enactment. In 2005, the department approved a kind of alfalfa that was genetically modified to resist a mild herbicide, thus enabling farmers to avoid having to use harsher weed killers. Several environmental groups sued to overturn the approval.

They didn't argue that the product would cause any health hazards. Instead they claimed, among other things, that it would hurt organic farmers -- that, for example, farmers would lose the right to label their unmodified alfalfa "organic" because it would be contaminated by the new product.

Greg Conko, who studies biotech issues for the libertarian Competitive Enterprise Institute, points out that this fear is overblown, since organic standards require farmers to keep their crops isolated from possible contaminants, and don't penalize unintentional cross-pollination.

In 2007, however, a federal judge ruled that the department should have done a more thorough review and blocked new seeds from being sold. Three years later, the Supreme Court ruled 7-to-1 that the lower court had gotten it wrong.

In 2010, another judge made a similar ruling about herbicide-resistant sugar beets, which at the time made up 95 percent of all sugar beets in the country. Two years later, the department concluded that yes, it is all right to plant the beets.

The same activist groups that filed the lawsuits went into overdrive blasting the new law. The issue took off, partly because a lot of people find genetically modified crops alarming, no matter what the evidence says about their safety. And in a post-bailout world, legislation that looks like a favor for particular companies receives heightened suspicion across the political spectrum.

Sen. Barbara Mikulski, the Maryland Democrat who runs the committee that had responsibility for the law, felt moved to distance herself from it, saying it was on its way to passage before she took charge. Fox News backed up her story by noting that Stonyfield Farm Inc., a subsidiary of Danone that makes organic yogurt, had warned against the law before her tenure.

The involvement of Stonyfield -- and other organic-food companies and their supporters -- casts a different light on the entire controversy. It may be that these companies believe that genetically modified crops really are a threat to the integrity of their products. But they are surely a threat to their bottom line.

In other words, on one side of this issue are companies that would benefit if nuisance lawsuits pushed their competitors' products off the market. On the other side are companies and farmers wanting to limit the impact of such a tactic. I'll leave it to you to decide which side has the better case.


Ramesh Ponnuru is a Bloomberg View columnist, a visiting fellow at the American Enterprise Institute and a senior editor at National Review.


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