Exclusive: EU to overhaul GM crop system

BRUSSELS (Reuters) - The European Union is to radically overhaul its approval system for genetically modified (GM) crops from next month, opening the way to large-scale GM cultivation in Europe, draft proposals seen by Reuters on Friday showed.

With most Europeans showing no appetite for GM produce in food, EU politicians have approved just two varieties for growing in 12 years, compared with more than 150 worldwide.

Under proposals due to be adopted on July 13, the EU executive Commission will be given greater freedom to approve new GM varieties for cultivation in return for letting EU governments decide whether or not to grow them.

"It is expected that the authorization process of GMO cultivation at EU level will become more efficient," a Commission analysis accompanying the proposals said.

The French Agriculture Ministry said it could not comment on the plans until it had studied them.

EU governments may give initial reactions to the proposals at a meeting of environment ministers in Luxembourg next Friday, where France has called for a debate on the bloc's GMO policy.

Commercial GM planting in Europe last year covered less than 100,000 hectares, mostly in Spain, compared with 134 million hectares globally.

The plan is likely to see an increase in commercial planting in countries already using GM technology, such as Spain, Portugal and the Czech Republic, while legally endorsing existing GM bans in countries including Italy, Austria and Hungary.

But critics said the proposals could spark internal market disputes within Europe, and leave the EU open to legal challenges in the World Trade Organization (WTO), which backed a U.S. complaint in 2006 that the EU's GM policy was unscientific.

The new rules were drawn up by Maltese Health and Consumer Affairs Commissioner John Dalli, who caused controversy in March by approving cultivation of a GM potato used in starch production.

The plans are based on a joint Austrian Dutch proposal, which European Commission President Jose Manuel Barroso pledged to implement last year as part of his bid for reappointment.

TWIN-TRACK APPROACH

The Commission proposal has two main elements, the drafts showed.

The first is an interim measure designed to quickly introduce the changes, which will see the Commission issue new guidelines to member states on the "coexistence" of GM and non-GM cultivation.

These would allow countries to set their own technical standards for GM farming, for example requiring buffer zones of 10 km (6.2 miles) between GM and non-GM fields, which would in effect rule out GM cultivation in entire regions and countries.

The second is a "restricted amendment" to current EU legislation on the release of GM organisms in the environment, that would allow countries to ban GM cultivation altogether for reasons other than safety or coexistence grounds.

The legislative change would have to be agreed by a qualified majority of EU governments and the European Parliament under the EU's system of weighted voting.

If the debate cannot be limited to this one change alone as the Commission hopes, it could mean two or more years of complex political argument before a decision is reached.

When contacted by Reuters, a spokesman for Dalli refused to confirm the details of the plan, but said the commissioner had previously given his backing to the idea and promised to table proposals before the summer.

OPPONENTS SHARE CONCERNS

"These proposals are legally questionable, contrary to the single market and will sow deep division between the member states," said an industry source who had seen the proposals but asked not to be named.

The move could open new European markets for biotech companies such as Monsanto, Dow Agrosciences, a subsidiary of Dow Chemical Co., and Syngenta.

Syngenta's shares initially rose after the news, but closed down on the day.

Monsanto spokeswoman Kelli Powers said without more details the company was not in a position to comment. Officials at Dow AgroSciences also said they were reserving comment until more details of the proposal emerge.

The plan would be a boost to biotech seed companies, said Jeffries and Co. analyst Laurence Alexander, but broad public acceptance that would open up the EU to more imports is a more pressing concern, he added.

The EU currently blocks all imports containing the tiniest trace of unapproved GM material, but the Commission is set to propose a tolerance margin later this year to avoid a repeat of feed supply disruptions caused by this rule in 2009.

Environmental campaigners who were briefed on the proposal by the Commission on Thursday said it confirmed Barroso's intention to promote GM cultivation in Europe.

"The public and environment will only be protected if the Commission's proposal is backed up by Europe-wide measures to prevent our food and feed from being contaminated. Until then we need an immediate ban on growing GM crops," said Adrian Bebb, food and agriculture campaigner with Friends of the Earth.

(Additional reporting by Catherine Hornby in Amsterdam, Carey Gillam in Chicago; Gus Trompiz and Marie Maitre in Paris; Editing by Veronica Brown and Sue Thomas)