Dunn, Michael V.

English

Research Papers in Economics

Under Secretary Dunn’s Panel Presentation
“Federal Government Perspective on Regulatory Issues”
Agricultural Outlook Forum
February 24, 2000
Arlington, Virginia
—Thank you for inviting me here to discuss the regulation of products derived from biotechnology.  While
today I will focus primarily on those issues that fall under USDA’s jurisdiction, I will also touch briefly on the
roles other Federal agencies have in regulating these products.
  
—Biotechnology holds enormous potential, and dramatic breakthroughs in agriculture, medicine, and other
areas have already occurred.  However, it also raises many questions.  Our challenge as regulators and
policymakers is to grapple with these questions and find satisfactory answers.  We need to make sure that our
regulatory systems continue to protect public health, safety, and the environment, and that they remain flexible
enough to respond effectively to future needs.
—Federal authority for reviewing the safety of new, genetically enhanced products is shared among three
agencies, the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and
USDA’s Animal and Plant Health Inspection Service (APHIS), an agency under my mission area.         
—FDA ensures that all food products meet the safety standards of the Food, Drug, and Cosmetic Act.  EPA
ensures that any pesticidal substances, some of which may actually be synthesized by plants, are used safely in
the environment in accordance with the Federal Insecticide, Fungicide, and Rodenticide Act.  EPA also sets
tolerance limits for substances used as pesticides on and in food and feed or establishes exemptions from such
requirements.  
—USDA’s APHIS regulates the development and field testing of certain genetically engineered organisms,
primarily new plants and plant products, to ensure that they are as safe to use in agriculture as traditional
varieties.  Prior to introducing a genetically modified (GM) plant into the environment, an individual must obtain
a permit from APHIS or meet the Agency’s notification requirements.  APHIS also makes decisions about
whether to deregulate new GM plant varieties, thus clearing the way for their commercial use.  APHIS also
regulates the development of veterinary biologics, including genetically engineered vaccines.    
—Each of these agencies—EPA, FDA, and APHIS—play integral, interdependent roles in determining the use
and safety of these products, and all of the regulatory processes that are now in place were developed after
extensive scientific review and solicitation of public opinion.  Technical experts in EPA, FDA, and APHIS
review new products according to the characteristics of the new products, their proposed use, and their
experience with other, comparable products.  Each Agency bases their ultimate decisions on careful analysis
and the most current scientific information. 
—This regulatory framework has been a remarkable success.  The United States has been proactive in leading
the world in developing a regulatory system for the safe development and commercialization of plant
biotechnology.  Our challenge as regulators has been—and remains today—to address safety 2
concerns in an open, transparent manner that ensures public and producer confidence in the genetically
engineered products we have evaluated and approved.         
—In all of our efforts, science plays the central role in evaluating risks and developing appropriate regulatory
action.  Our approach to reviewing the products of biotechnology continues to evolve in accordance with new
advances. 
—Federal regulators work with scientists both here and abroad to obtain the best independent, technical, and
scientific information pertaining to biotechnology.  USDA and other government officials participate in biosafety
workshops and international symposia on various subjects related to this technology.  They also perform
extensive searches of a wide variety of scientific literature, including pest surveys, threatened and endangered
species lists, and previous petitions and determinations of nonregulated status.  To ensure the thoroughness of
its scientific decisionmaking, APHIS has contracted with the National Academy of Sciences to review the
Agency’s methodologies, identify any potential gaps, and recommend any needed changes.  As the science
advances, we want to be sure we continue to ask the right questions, look at the right information, and analyze
it in the right way. 
—Last summer, Secretary Glickman outlined five principles to guide in our efforts to address the many complex
issues surrounding biotechnology.  The first, an arm’s length regulatory process, directs Government regulators
to stay an arm’s length, dispassionate distance from the companies developing and promoting these products,
and continue to protect public health, safety, and the environment.  
—The second guiding principle, consumer acceptance, is fundamentally based on an arm’s length regulatory
process.  As the public’s understanding and trust in these processes grows and educational efforts increase,
consumer acceptance should follow.  
Fairness to farmers, the Secretary’s third principle, means that biotechnology has to result in greater, not fewer
options for producers.  The industry has to develop products that show meaningful results for farmers,
particularly small and medium size farmers. 
—In regard to the fourth principle, corporate citizenship, biotechnology companies must understand that
they—as businesses—must also respect the interests of farmers and consumers.  The fifth and final principle,
free and open trade, dictates that we cannot let others hide behind unfounded, unwarranted  claims to block
commerce in agriculture.  We will continue to work toward maintaining free and open trade by communicating
about the science behind our decisionmaking.  
—In this regard, we in Government are doing all we can to strengthen our relations with our trading partners to
prevent polarization and outright trade wars over biotechology issues.  The finalization of the first global treaty
regulating trade in GM products—known as the Cartagena Protocol on Biosafety—is an important step in the
right direction.  While the United States is not an official party to the Protocol, the Administration has agreed to
abide by its provisions.  We believe it will help protect the earth’s biological diversity without making trade3
more difficult.    
—While some of the parties demanded labeling and segregation of GM organisms, U.S. and other negotiators
argued that doing so would be cost-prohibitive because of the common practice of commingling commodities
during the shipping process.  The language finally agreed to by all of the parties states that such shipments
would be accompanied by documentation stating only that they “may contain living modified organisms...not
intended for introduction into the environment.”
—The Protocol also establishes a “biosafety clearinghouse” to help countries assess potential risks from GM
organisms.  The notification provisions of the Protocol affirm the rights of individual nations to regulate the
importation of GM products.  These provisions may be useful in addressing the concerns of many countries that
believe their current regulatory systems are inadequate to deal with the potential implications of this new
technology.  Critically, however, those provisions that call for transaction-by-transaction notification and
consent from countries do not apply to shipments of commodities.    
—On the domestic side, USDA is also working to be an informed and honest facilitator of a constructive dialog
on agricultural biotechnology.  For example, we have established the Biotechnology Coordinating Committee,
comprised of the USDA agencies that deal with biotech issues, to serve as an information clearinghouse and
review and planning body for the Department.  In addition, we have established the Secretary’s Advisory
Committee on Agricultural Biotechnology.  The Advisory Committee is comprised of 38 members drawn from
academia, industry, and environmental and consumer interest groups.  Committee representatives will provide
us with essential input on USDA policies related to the social, scientific, and economic issues pertaining to
biotechnology.  It will meet for the first time here in Washington in little over a month.    
—As I indicated earlier, we certainly support any initiatives that will allow consumers to make more informed
choices, and we are actively listening to the public’s concerns about various issues associated with
biotechnology.  For example, the Agricultural Marketing Service (AMS), which is within my mission area,
responded to the concerns of thousands of commenters who were opposed to including unapproved GM
commodities in organic production and labeling standards.  While such crops are safe and have important roles
to play in agriculture, they do not fit current organic practices or consumer expectations of organic products. 
Accordingly, we intend to publish a revised proposed rule in the near future that, if finalized, would revise the
standards for the National Organic Program.    
—The certification and labeling of crop varieties and food products produced through genetic engineering raises
significant questions for USDA and other Federal agencies.  For example:  How do we address our domestic
and international customers’ concerns and protect America’s farmers by ensuring markets for U.S. corn and
soybeans?  And how do we better meet end users and consumer demands for more specialized, sophisticated
commodities?  For some market segments, identity preservation (IP) is one tool that may help.    
—IP systems for GM products are in the early stages, and the concept brings with it a new set of marketing
challenges.  First, IP brings increased handling costs and additional recordkeeping.  Further, transportation4
costs are higher, because IP shipments are usually smaller and costlier to ship.  Finally, there is no widespread
market demand for IP crops or a consistent supply available.  Despite these challenges, IP in the soybean and
corn sectors is gaining market acceptance because it makes good business sense.
—To realize the benefits of this approach, markets are seeking improvements in IP marketing systems.  USDA,
specifically the Grain Inspection, Packers and Stockyards Administration, is aiding in this effort by developing
improved grain testing methods to determine the quality of grain.  We are also establishing a reference
laboratory to evaluate and verify the validity of analytical procedures used to detect and quantify GM traits in
grains and oilseeds.  This lab will meet a market need to ensure reliability of genetically enhanced crop detection
methods and to increase overall market efficiency.
—We believe that our policies and processes in the biotechnology arena are well-grounded in science, and that
we have an excellent track record.  It is also our continuing goal as regulators to keep pace with current science
and maintain the lines of communication to address public and stakeholder concerns.  I would like to take some
time now to answer any questions you may have about Federal regulatory issues related to biotechnology. 

FEDERAL GOVERNMENT PERSPECTIVE ON REGULATORY ISSUES

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