By Tom Polansek
CHICAGO (Reuters) - Mexico has found unexpected allies as it tries to limit imports of genetically modified (GM) corn: some U.S. farmers who grow the crops.
Farmers have for decades planted GM corn, which protects against insects and weedkillers, with seeds sold by companies like Bayer AG (ETR:BAYGN), Corteva (NYSE:CTVA) Inc and ChemChina's Syngenta.
But as believers in a free market, some say the U.S. should agree to sell Mexico non-GM corn, rather than deepen a trade dispute over the proposal, and note they could earn a premium for growing more conventional corn.
"I'm all for free and fair trade," said Fred Huddlestun, who grows GM corn and soybeans in Yale, Illinois. "When they get to the point they're pushing somebody to buy something they don't want, then I have concerns about that."
Mexico is the largest buyer of U.S. corn and the proposed restrictions threaten to disrupt some of the nearly $5 billion of corn the U.S. ships to Mexico annually, or 95% of Mexico's total corn imports.
Mexico said in February it would ban GM corn for consumption by people, backpedaling from previous plans that clouded the future of imports for livestock feed, the destination of the vast majority of its imported corn.
Supporters of the policy say GM corn can contaminate Mexico's age-old native varieties and have questioned its impact on human health.
The Biden administration says restrictions would violate the U.S.-Mexico-Canada Agreement (USMCA) and last month requested trade consultations with Mexico in the first formal step toward a request for a dispute settlement panel under the pact. U.S. officials met with counterparts in Mexico last week.
Mexico's proposed restriction on corn for human consumption is expected to affect white corn imports, used primarily for tortillas, according to a U.S. Department of Agriculture report.
Agriculture Tom Vilsack said on March 30 that he expects the administration will "ultimately compel" Mexico to reverse its policy. The restrictions are not supported by science and fail to adhere to a rules-based trading relationship, he has said.
Industry groups including the Biotechnology Innovation Organization (BIO), which represents biotech companies, and the National Corn Growers Association (NCGA) have lobbied U.S. officials to oppose Mexico's proposals.
Mexico is drawing a "safety distinction" between corn used for food and animal feed without material scientific justification, the groups told Biden in a letter praising Washington's step toward a settlement panel.
On Tuesday, BIO said the U.S. should launch the formal dispute process "without delay" if consultations do not produce a science-based outcome.
But some U.S. farmers say the U.S. should back off.
NCGA has appeared intent on "ramming potential unwanted grain down our trade partners (sic) throats," Matt Swanson, a farmer who grows non-GM corn, wrote on Twitter.
Companies like Bayer (OTC:BAYRY) have spent hundreds of millions of dollars developing GM crops and defending the safety of GM foods. Four companies sell more than 75% of corn and soybean seeds, according to data cited by the USDA.
'WORTH MY WHILE'
U.S. farmers have long had a conflicted relationship with seed companies. Growers benefit from yield-improving and pest-killing agricultural technology, but some are unhappy with consolidation in the sector and the amount of sway the companies have over U.S. agriculture.
"It seems to me like the secretary and this administration are not standing up for all farmers," said Greg Gunthorp, an Indiana pork and poultry farmer who feeds non-GM corn to livestock to produce premium meat products. "What they're really standing up for is the big companies."
Bayer said it works with BIO, NCGA and other groups to promote the need for a science-based regulatory system. NCGA said GM corn is safe and it will fight all illegal trade barriers for farmers.
Some sector experts have warned Mexico's restrictions, if implemented, could prompt other countries to seek bans.
Though there is no hard data on U.S. farmers' opinions, Reuters spoke to about 10 growers and grain traders who said the U.S. should not require Mexico to continue importing GM corn.
Other growers worry about the extra work required to grow non-GM crops, instead of GM grain, and the potential for a new government in Mexico to eventually change the policy again. But many would consider growing more non-GM corn, if the price were right.
"You need to make it worth my while," said Illinois farmer Dave Kestel, who grows GM corn and sells seed for Corteva. "Twenty percent premium would probably be the minimum."