Advisory Committee on Biotechnology & 21st Century Agriculture ...


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Advisory Committee on Biotechnology & 21st Century
Agriculture (AC21) Meeting:
June 16
17, 2003

Meeting Summary

First Plenary Meeting of the Advisory Committee on Biotechnology
and 21st Century Agriculture

June 16
17, 2003

On June 16 and 17, the United St
ates Department of Agriculture (USDA)
convened the initial plenary meeting of the Advisory Committee on
Biotechnology and 21st Century Agriculture (AC21). The meeting objectives
included: 1) develop a clear understanding of the AC21 scope, purpose, and
rational process; 2) discuss how to organize overall work and
examination of individual issues, and potential types of outcomes; 3)
determine the most effective way of moving forward subsequent to the first
meeting, including scheduling the next plenary me

The AC21 includes representatives of industry, state and federal government,
governmental organizations, and academia. The following AC21
members were in attendance: Dr. Patricia A. Layton, Dr. Daryl D. Buss, Mr.
Leon C. Corzine, Dr. Carole Crame
r, Dr. Richard T. Crowder, Dr. Michael D.
Dykes, Dr. Randal W. Giroux, Mr. Duane Grant, Dr. David A. Hoisington, Mr.
Gregory A. Jaffe, Dr. David C. Magnus, Mr. Terry L. Medley, Mr. Ronald D.
Olson, Mr. Jerome B. Slocum, and Ms. Lisa W. Zannoni. Dr. Patrici
a Layton
chaired the meeting. Dr. James Maryanski, U.S. Food and Drug
Administration, and Dr. Vincent Vilker, National Institute of Standards and
Technology (NIST) attended as ex officio members. Ms. Abby Dilley of
RESOLVE, and Ms. Cynthia Sulton of HW&W.
facilitated the meeting.
RESOLVE is an independent, non
profit dispute resolution organization with
particular expertise in environmental, health and other public policy issues,
including biotechnology. HW&W is a consulting firm that offers analytic,
ing, meeting facilitation and process review services to the Federal
government. A full transcript of the proceedings was prepared and will be
available on the USDA website
. Presentations will also be
available on this website. Below is a summary of the proceedings, prepared
by the facilitation team.

I. Welcome and Opening Comments from the Secretary

Dr. Michael Schechtman, the AC21’s Executive Sec
retary and Designated
Federal Official (DFO), USDA opened the proceedings at 9 a.m. by welcoming
all the members, ex officio representatives, and the public in attendance. He
briefly introduced David Hegwood, Special Counsel to the Secretary, Dr.
Layton, AC21 Chair, and facilitators Ms. Abby Dilley and Ms. Cynthia

Mr. Hegwood then introduced the Secretary of Agriculture, the Honorable
Ann Veneman, who offered opening comments. Secretary Veneman thanked
AC21 members for serving on the commi
ttee and Dr. Layton for chairing. She
discussed USDA’s involvement with biotechnology through many program
areas and offices as well as the Department’s interest in fostering the
development of the technology while ensuring health and safety. She noted
t the U.S. bears a special burden as one of first developers of
biotechnology. Secretary Veneman explained the committee’s charge to aid
the Department in addressing biotechnology, with an emphasis on potential
future impacts of the technology on the food
and agricultural system in the
U.S. and throughout the world. Following her comments, committee
members took time to briefly introduce themselves to the Secretary.

II. Introductions

Dr. Schechtman thanked the Secretary for her comments. Following a break,

he elaborated on the meeting objectives (listed above) and reviewed the
documents available to the AC21 members and to the public. Dr.
Schechtman reiterated that Secretary Veneman and others involved in
biotechnology issues within USDA have anticipated th
e work of the AC21,
and he expressed his and the Department’s commitment to and support for
the committee’s work.

Dr. Layton added her welcome and introduced herself to the committee. She
emphasized the importance of sharing the diverse views represented b
y all
committee members and operating in the spirit of cooperative interaction.
She noted her expectation for the work to be challenging and for the AC21’s
goals to focus on the future of the technology. Dr. Layton then asked
members to introduce themselve
s and to share why they are participating
and what they hope to accomplish as a committee. Dr. Layton then turned to
Ms. Dilley for a more detailed review of the meeting agenda.

III. Overview of Agenda and Ground Rules

Ms. Dilley reviewed the proposed age
nda, highlighting the first meeting’s
importance in framing the committee’s work for the rest of their process. She
outlined suggested ground rules: 1) focus on the task at hand, 2) observe
time limits, 3) stay in one conversation, and 4) be tough on issue
s and not
on people or organizations. The committee members agreed on these ground

IV. Overview of FACA Guidelines, Charter, Roles, and Bylaws

Dr. Schechtman reviewed the history of the Federal Advisory Committee Act
(FACA). The FACA created a forma
l process for establishing, operating,
overseeing, and terminating committees such as the AC21. He articulated
certain expectations of individuals and of the committee as legislated through
the FACA. He explained that committee work is meant to be transpar
ent to
the public, including committee documents. All FACA meetings must be
approved by the designated Federal Official and noticed to the public.

Under the FACA, a committee charter is required. The charter explains the
basic purpose of the committee, the

overall structure of the committee,
terms and duties of members and officers, kinds of records kept, nature of
the advice to be given, estimated costs, number of meetings, and reporting
and committee support. The AC21 charter was drafted and reviewed with
USDA, approved by the Secretary, and filed with the General Services
Administration (GSA) on February 21, 2003.

Dr. Schechtman pointed out that, under the AC21 charter:

Subcommittees and additional advisors and consultants may be

There are w
ide ranges of expertise and viewpoints represented by
appointed members;

Equal opportunity practices were to be employed for committee
appointments, and nominees were sought from a wide range of
minority and disadvantaged institutions;

The function of th
e AC21 is solely advisory;

Members of the committee serve without pay, but USDA will cover the
travel expenses of members who require assistance in order to attend

USDA will convene the committee up to four times per year.

Dr. Schechtman also
reviewed the AC21’s draft bylaws, some of which are
determined by FACA requirements and some of which correspond to the
committee charter. USDA drafted these bylaws in order to articulate how the
committee will work towards consensus, what the facilitators
’ roles are, and
how members interact. Dr. Schechtman explained that USDA will request
committee input on the structure of committee work, and the approach will
likely evolve throughout the process. However, USDA is not asking the
committee for input on ne
w topics to address.

Dr. Schechtman discussed the roles and responsibilities of AC21 members,
based on guidelines in the draft revised ground rules and the charter. He
discussed the role of the chair, a committee member appointed by the
Secretary for a tw
year term. The chair’s responsibilities include calling,
presiding over, and adjourning meetings, as well as approving agendas and
meeting summaries. Dr. Schechtman also outlined his roles as DFO, which
include approving or calling meetings, approving ag
endas, attending all
meetings, adjourning meetings when it is in the public interest, and chairing
meetings when so directed by the Secretary or a designee. In his role as
Executive Secretary, Dr. Schechtman is further responsible for arranging and
ng members of meetings, maintaining and filing meeting records,
attending to official correspondence, acting as the agent for meeting
expenditures, and preparing and handling reports.

The facilitator’ roles, as outlined in the draft bylaws, are to act as n
parties to facilitate meetings and work with AC21 members to ensure that
the process runs smoothly. The facilitators will generally develop draft
agendas, focus meeting discussions, work to resolve any impasses that may
arise, prepare meeting summar
ies, work with the DFO on background
materials and documents the AC21 needs or develops, and perform other
functions as the AC21 requests.

Later in the day, members reviewed the charter and bylaws in detail. A
member asked whether individuals would be able

to participate by phone if
they are not able to attend in person. Dr. Schechtman said that
teleconferencing may be possible under special circumstances but is
discouraged. He will investigate the logistics of bringing individuals in by
phone for future me

Responding to a question, Dr. Schechtman clarified that the section of the
operating procedures discussing the opportunity to call a “caucus” is meant
in an informal way. It was included in the interest of preserving the ability of
committee member
s to work one on one. It does not imply that there are
specific divisions of interest groups.

Regarding work groups, Ms. Dilley clarified that, apart from resource
constraints, no members are excluded from participating in any work group.
A small subgroup
of members would be charged by the plenary with a task,
and other members could choose to attend or participate in this work.

Dr. Schechtman noted that documents do not become committee documents
until they are brought to the committee. Any documents that
come out of the
committee are public documents and therefore anyone will be able to cite
them. Documents at the work group level are considered drafts, which are
also kept in the record under FACA requirements. Members may share
documents relevant to commi
ttee discussions. For dissemination of
background literature provided by AC21 members, the committee indicated a
preference that USDA compile literature references rather than distributing
entire documents.

Dr. Schechtman will make the changes suggested an
d circulate these
documents to absent committee members for review and comment. The
revised charter and bylaws will then be presented to the entire committee for

V. Basic Assumptions for and Structure of Work, and Intended

David Hegwoo
d addressed the AC21 to help further clarify their purpose and
role as an advisory body to the Secretary and USDA. He expressed that
biotechnology has the potential to profoundly influence agriculture. USDA’s
aim is to realize this potential while having e
ffective safety systems to
regulate the technology as it develops. He acknowledged the tension
between expanding the technology and protecting the health and safety of
the US agricultural system, including consumers, plants, and animals.

Mr. Hegwood empha
sized that the committee should focus on how
biotechnology could impact the entire food system in five to ten years, noting
that the AC21 membership reflects diverse perspectives, from research to
consumer interest. He expressed a concern that expertise in

property may be underrepresented in the committee. If these issues are
discussed, USDA will ensure that there is adequate expertise for the

Regarding committee output, Mr. Hegwood commented that a report would
be useful to synth
esize AC21 discussions and consensus points. USDA would
like a report from the committee in the next 18 months. He encouraged
AC21 members to consider this report to be a starting point, by identifying
critical issues, challenges, and resources needed as t
he Department prepares
itself and its constituencies for changes in agriculture associated with the
future development of biotechnology. He noted that consideration of the
agricultural system necessarily includes production practices, marketing
consumption patterns, trade patterns and regulatory system.

A member asked for clarification and a common understanding of what “long
term” means to USDA. Dr. Schechtman reiterated that the Department wants
the committee to focus on issues five to ten year
s in the future. If a pressing
issue arises, the Secretary may choose to ask the committee for input on a
case basis. Members have the opportunity to bring issues to the
committee for discussion, though USDA’s intent is to have the AC21 focus on
e future rather than working to solve current issues.

Members mentioned the following potential areas of discussion:

the use of biotechnology to preserve endangered plant species

the use of biotechnology to protect basic germplasm

intellectual property,
including issues of fairness, value and value
capture, and facilitating technology transfer

biodefense and biosecurity

research funding needs for future competitiveness

rural development

biotechnology as a driver of economic and social change


mportation of biotechnology

defining and segregating manufacturing processes to maximize the
value of the technology as it evolves

public awareness of biotechnology and USDA’s role in public education

Mr. Hegwood explained that USDA is currently discuss
ing more immediate
issues such as thresholds and adventitious presence. As such issues are
being addressed already, USDA prefers that the committee not make near
term topics its main focus. He pointed out that an advantage of a group with
diverse perspecti
ves is to step back and think further into the future and with
a broader brush about where the technology is headed, and how USDA can
best prepare for the associated impacts on agriculture.

Dr. Schechtman expressed that he was very encouraged to hear these

suggestions from committee members and highlighted the challenge of
addressing a topic as broad as biotechnology. In order to begin considering
parameters to refine the committee’s focus and prioritize their limited time,
Ms. Dilley asked members to consi
der and comment on the five to ten
timeframe and the committee report suggested by USDA.

Regarding the five to ten year timeframe, some members proposed
establishing common assumptions about the current environment of
agriculture and policy, as development
s in international trade and domestic
policies will affect the development of biotechnology the five to ten years
from now. Other members expressed concern that overlooking issues on a
shorter timeframe could negatively impact biotechnology in the future.

Members also shared comments regarding a committee report. Several
members observed that the timeline for a report depends on the components
the committee decides to include in their scope of work. Some cautioned that
covering a broad topic in a fixed time

period often results in reports lacking
substantive detail. A member proposed bringing clarity by focusing on action
items the committee would recommend to USDA. One member suggested
considering a series of smaller reports to be issued as the committee
ogresses. Another member suggested a series of reports on pressing and
term issues, respectively. Yet another member noted the importance
of being responsive to USDA’s needs and dealing with issues for which their
expertise would be most useful in t
he limited time period. He proposed that
larger issues of interest that the committee does not have the time to
address could be noted in the report.

VI. Public Comment Session

In accordance with FACA, members of the public were given an opportunity
to com
ment on the ACAB deliberations. The public comment period was held
at the end of the first day. No members of the public offered comments.

VII. Scope

Members revisited potential issues to address as a committee. To help focus
and prioritize the universe o
f potential topics, Ms. Dilley presented and
requested feedback on four criteria:

Added: The AC21, given its membership and charge, can make
a unique contribution to the topic.

Not Duplicative: The topic is not already thoroughly addressed in other
venues, committees, or USDA work.

Anticipatory: The topic reflects on trends, questions, or issues
impacting agriculture five to ten years in the future.

Secretary’s Request: Meets the Secretary’s charge to the committee or
is her specific request to the

AC21 to address the topic.

Dr. Schechtman revisited the committee charge as stated in the charter,
specifying USDA’s interest in the committee’s advice on trends, factors
influencing those trends, and how those factors and trends are likely to
change ove
r five to ten years. He acknowledged that, as a step in projecting
future trends, it would likely be necessary to briefly describe the current
state of agriculture and biotechnology. He also pointed out that the most
useful recommendations are those that w
ould fall within USDA’s regulatory

Some members expressed a need for specific objectives before identifying
topics. Mr. Hegwood responded, specifying that a report with
recommendations is one objective of the committee. With regards to report
ent, USDA would like advice on how to realize the potential of
biotechnology by

implementing a robust regulatory system,

promoting global understanding and acceptance,

examining and achieving broad benefits, including environmental,
health and safety, an
d consumer benefits,

determining external constraints such as adequacy of resources in the
regulatory system, research and development, and trade, and

projecting impacts on agriculture, including the food chain,
merchandising grain, and crop production.

After discussion, members reviewed and modified a possible description of
the committee’s scope:

The AC21 will provide advice and recommendations on future vision and
facilitation of the use of biotechnology consistent with environmental, health,
and saf
ety needs through:

analysis of trends, factors affecting trend, and

determination of resources

evaluation of constraints, and

assessment of implications.

Ms. Dilley conveyed that this draft statement would likely be revised af
further discussions with the Secretary’s office, and suggested the committee
begin a discussion on categories of potential issues. Members spent time
brainstorming ideas in three general categories:

“New” Products/Product profiles



Transgenic Animals




Pharmaceutical production

Nutritionally enhanced products


Turf grasses


Ornamental plants

Biologicals (e.g., vaccines

human and veterinary)

Mycorrhizal fungi

“New” Scientific Developmen

Gene stacking

New non
transgenic genetic manipulations resulting in novel products


Products vs. process


Criteria for when such applications will be regulated

Modified pathways and function with very complex implications

cutting Issues

ory issues/gaps

Resource needs

International aspects




Risk assessment and regulatory harmonization


Interim policy for accepting products while a regulatory system
is being established

Intellectual property

Consumer acceptance/confidence


Informational issues




how are they defined and captured


Testing and verification


Efficacy of USDA’s organizational structure (e.g., plant and animal

U.S. regulatory agency issues


rity of authority and jurisdiction


Interagency coordination


Risks associated with any regulatory gaps

Mr. Hegwood told the committee that the list of issues was generally on the
right track. Members commented that additional feedback and guidance from
SDA would be important. Further, some members noted the need for a list
or glossary of common terms as the committee continues its discussions. Dr.
Layton thanked AC21 members for their work thus far and encouraged the
committee to continue working toward
greater clarity in the scope of their

VIII. Reflections on Day 1

Ms. Dilley presented a document drafted by the facilitation team based on
the previous day’s discussions (
Attachment 1
). She explained that the
document was meant to capture themes and categories of topics and asked
for the committee to provide feedback as they continue to work with the
Secretary’s office to refine their scope of work.


New Non
Food Uses in Row Crops

Dr. Schechtman introduced the committee’s first topic, “New Non
food Uses
in Row Crops.” Referring to a few select farmers who are growing new
experimental crops under stringent conditions, he highlighted the need for
o understand the implications of biotechnology’s impact on the
production of new medicines, on the production of enzymes and other
chemicals, and on agriculture. He outlined questions of interest to USDA for
the committee to consider during the two present

Where is this trend coming from?

What is in the works or on the horizon?

At what scale and where?

What will this mean for farmers in the future?

How does and will the presence of these crops affect farmers and

How will it affect t
he business of farming and the culture of farming?

Dr. Schechtman also made general suggestions to committee members on
how to proceed with discussions following the presentations. He framed the
presentations as tools to set the stage for each topic, afte
r which the
committee must examine the issues and decide on an approach for working
on each subject. He told the committee that the most useful focus for USDA
would be on the future; especially trends, factors causing those trends, and
how those factors an
d trends will change. Dr. Schechtman said that the
committee could consider making policy recommendations after
characterizing the “big picture” of long
term trends.

Dr. Schechtman then introduced Dr. Scott Deeter, President and Chief
Executive Officer of
Ventria Biosciences, in Sacramento, CA, who gave the
committee a presentation on “Plant
made Pharmaceutical and Industrial
Products: Expectations and Realities” (
Attachment 2
). Ventria is a private
company that was started in 1993 in California to produce plant
pharmaceuticals (PMPs). He expressed that his presentation was meant to
convey an industry perspective and that his views are based on the system
and approaches used by his company.

Companies such as Ventria are using some traditional food crops for
manufacturing pharmaceutical or industrial products because grains have a
natural protein storage mechanism, do not carry viral vectors, and can be
roduced inexpensively once developed. Costs of building a new biotech
pharmaceutical facility are very high, as are the costs of the clinical
development process. These expenses can limit what products are pursued
and are reflected in the price of the good

Dr. Deeter stated that environmental stewardship is an important issue for
PMPs and plant
made industrial products (PMIPs). He said that technology,
such as male sterility and self
pollination, can help manage environmental
drift of genetically modified
plants. He mentioned the USDA draft guidance
on environmental stewardship that is being developed to standardize
requirements for management practices that protect the environment.
Inspections are one aspect of ensuring environmental stewardship and are
nducted by USDA’s Animal and Plant Health and Inspection Service
(APHIS) as well as organizations such as California Crop Improvement
Association (CCIA).

Dr. Deeter shared some of his expectations about the future of his industry.
He predicts that, in the
next ten years, PMP and PMIP production will be part
of “mainstream” agriculture. He noted that the industry is currently
competing on platforms for producing products rather than products
themselves, but he predicted that the number of companies will drop

from 18
to 6 as certain platforms become preferable or show more success. One
future application of the technology could be to address global health
problems requiring the production of large amounts of low
pharmaceuticals to supply populations in ne
ed. Dr. Deeter emphasized that
developing these products could take many years.

Dr. Deeter answered several questions about environmental and containment
measures taken by his company. He explained that impacts on nontarget
organisms are studied as part of

the determination of which proteins should
be expressed in plants brought to the field. He elaborated on pollen flow
strategies, from geographic to temporal to mechanical separation, noting
that there are multiple approaches specific to different companie
s and
products. He stated the importance of training, noting that his entire
company was trained on the extensive standard operating procedures
(SOPs). He also noted that storage measures are very stringent and access
to stored materials is restricted.


member expressed surprise at Dr. Deeter’s prediction of the drop in
number of companies, stating that methods using biotechnology are similar
to any other manufacturing facility and that the public will not distinguish
between methods of pharmaceutical pr
oduction. Dr. Deeter replied that, as in
any innovative industry, the market would eventually determine which
approach among many is most effective. Thus, companies using less
favorable technologies are not likely to succeed in the long run.

A member also
asked about on
farm production and job creation. Dr. Deeter
shared his opinion that his industry will not have a large economic impact in
most rural areas. He believes that a relatively small number of farmers will
likely grow multiple specialized crops, r
ather than many farmers each
growing single crops. From his perspective, human health benefits will be
greater than rural development benefits. Another member agreed with this
analysis, stating that the acreage involved in such production is small in the
cope of U.S. agriculture.

When asked to comment on his industry’s broader impact on agriculture, Dr.
Deeter proposed that their new systems might be best viewed outside the
framework of traditional agriculture, as old SOPs and skills are not sufficient

PMPs. He noted that one large challenge as the biotechnology industry
develops would be to find skilled managers for these processes. Dr. Deeter
said that, while intellectual property is an important issue to industry growth,
it need not impede competitio
n or distribution of products. Those who own
intellectual property ultimately hope to generate income, and so will in most
cases issue licenses.

Dr. Schechtman then introduced the second speaker, William Horan, a
farmer from Rockwell City, Iowa, of Horan
Brothers Agricultural Enterprise,
and a former President of the Iowa Corn Growers Association.

Mr. Horan made a presentation entitled, “On
farm challenges in producing
pharmaceuticals and industrial compounds in genetically engineered plants”
3). He first discussed findings of the Future Structure of
Agriculture Task Force sponsored by the National Corn Growers Association.
This group found that South America has become increasingly competitive in
production agriculture. In the U.S., with small
er and smaller profit margins,
bigger farms are needed, and this trend towards bigger farms has impacted
rural America. He believes that identity
preserved (IP) crops are the future
and will be 20% of the market, requiring partnering between farms and othe
entities that is not required for the production of traditional (i.e., non
crops. Mr. Horan acknowledged that this would create logistical and economic
challenges for vendors and others, though the transition is important for the
U.S. to remain compe
titive globally.

Mr. Horan then shared his background as a fourth generation farmer. He and
his brother have been growing IP crops for 25 years. His vision is that corn
should be grown in areas where it has been traditionally successful, and that
SOPs and
core competencies are being developed to deal properly with
containment issues. On his farm, they follow requirements set by APHIS and
Meristem, the French pharmaceutical company for which he produces grain.
He showed some of his dedicated facilities and e
quipment and described
some of the containment procedures used on his farm. He emphasized the
importance of trained, experienced producers.

Members asked Mr. Horan for clarification on several points. One member
asked him to speculate on the acreage used f
or pharmaceutical crops. Mr.
Horan agreed with Dr. Deeter’s near
term estimates that numbers would be
low. He noted that these agricultural biotechnology products will not
necessarily boost rural development but could spur the economy and
business in other


Regarding equipment, Mr. Horan specified that dedicated equipment is
needed because it is likely impossible to remove all protein from combines
and other equipment. APHIS regulations now require dedicated equipment.
Some of this equipment is shared
among farmers growing the same crop
after careful cleaning. Another member presented the issue of ensuring the
security of fields. Horan responded by citing the efficacy of his solar powered
electric fence and having his farm operation relatively distant f
rom large
media markets.


Following a break, Ms. Dilley opened a discussion on the topic of New
Nonfood Uses of Row Crops. She reminded the committee about the
framework suggested by Dr. Schechtman as a starting point, which included
a focus on f
uture trends and effects on farmers and agriculture. She
acknowledged the need for continued conversation with the Secretary’s office
to further clarify the focus of future deliberations on this topic and she
encouraged the group to begin discussions on wh
ether to pursue this topic at
future meetings.

Members discussed the term “row crop.” Dr. Schechtman explained that the
intent of the term was to include food as well as other crops, such as
tobacco, that could be altered genetically to produce a pharmaceu
tical or
industrial product. A member noted that using the term “row crop” excludes
crops such as wheat and barley. Members decided that the term “crop” would
better capture plants of interest. Members further noted that, to be
comprehensive, they should d
iscuss production within the context of both
food and feed.

Members also discussed identity preservation and segregation. Some
suggested that the term “segregation” more accurately described the
systems discussed by the presenters. Members commented that t
here are
many regulatory aspects associated with segregation, including containment
requirements and, potentially, tolerance levels.

Another main topic dealt with characterizing industrial and pharmaceutical
plants. Members had previously agreed to keep th
ese two categories
separate and attempted to further refine these definitions. One member
expressed the view that vaccines should be a distinct category of
pharmaceuticals. The committee lacks a definition of industrials that captures
the variety of produc
ts that can be produced in crops. One member divided
bioengineered crops into three potential regulatory categories: 1) those that
receive full approval for food and feed, 2) those that are not intended for
approval or consumption, and 3) those that may be

approved with tolerances
after a risk assessment. A member acknowledged that this perspective on
categories could shift when considering economic as well as regulatory

Members concluded their discussion by considering frameworks within which
to h
old future conversations about this new non
food uses in crops. One
member proposed that the committee define general categories of products,
assess how these new products would impact the food and feed chain, and
eventually refine classes of products base
d on potential impacts. Another
member recommended the committee consider both positive and negative
projections of the biotechnology industry when forecasting trends and effects
on the agriculture and stakeholders. In considering policies and regulations,

one member emphasized the importance of using a scientific basis. Another
member supported this perspective, and added that considering the risk of
new products to current products on the market should also be a part of
decisions in the regulatory arena.
Other suggestions included assessing the
risk to U.S. farmland, determining effects of geographic distribution of crops,
and keeping a global perspective on the issue.

X. Impacts of Biotechnology Along the Food Production Chain

Dr. Schechtman introduced th
e second topic of biotechnology impacts along
the food production chain. He outlined questions to help the committee guide
its discussion:

How is biotechnology
induced decommoditization changing the
structure of markets for agricultural products?

What sor
ts of changes have occurred, or are likely to occur over the
next 5 to 10 years?

How are communications between different sectors in the food chain,
from biotechnology providers to the seed industry to the grain trade to
consumer product producers, to con
sumers, being conducted?

How should USDA facilitate this dialogue as we move into the next 5 to
10 years?

He then introduced Dr. Elise Golan, Senior Economist with USDA’s Economic
Research Service, and former staff economist with the President’s Council
Economic Advisors. Dr. Golan gave a presentation entitled, "Consumer
Driven Agriculture: New Demands and New Supply Chains” (
Attachment 4
She began by s
tating that American agriculture is a large but agile system
responsive to consumer demand. Farmers, processors, manufacturers, and
retailers are using technology to innovate solutions to meet these demands.

Dr. Golan shared three new trends arising as pl
ayers along the food
production chain compete.New technologies, consolidation, precision
agriculture and increased productivity on the farm help save costs and
ultimately reduce prices. She shared that biotechnology is boosting
productivity in Bt corn and
cotton, contributed to minor net farm income
gains with herbicide
tolerant soybeans, and minor negative returns with Bt
corn. However, even though biotechnology may not be directly increasing
farm income, off
farm income has increased with its use due to t
ime saved in
the field.

Dr. Golan outlined potential trends in on
farm costs, including

externalities, such as impacts of biotechnology
derived crop production
on organic farmers and the increase in activity at the State level on
biotechnology legislation;

consolidation for economies of scale in many sectors along the food
production chain, which could lead to market efficiency and equity;

precision agriculture for quality and safety, which has driven a growth
in third
party certifiers and vertical in
tegration and contracting to
verify attributes.

Dr. Golan discussed increased state regulation of biotechnology, citing 19
pieces of legislation introduced last year. Referring to another trend, she
mentioned substantial consolidations across the food sup
ply chain through
mergers, acquisitions, etc. Dr. Golan also discussed the trend of 47 to 50 of
the largest food retailers becoming distributors of their own products.
Further, she explained potential issues of asymmetric information as markets
become more

differentiated. She stated that fraud, unfair competition,
incomplete or faulty market differentiation, and labeling of traits could result.
She discussed the evolution of views on biotechnology
associated liability
issues and discussed the related topics

verification and certification. In
closing, Dr. Golan emphasized the US agricultural system’s remarkable
agility, and that the food supply chain has shifted in many ways to a food
demand chain.

Dr. Golan then answered questions of AC21 members. She discus
sed the
prevalent driving factors of the food supply chain evolving into a food
demand chain. She reported that the demographic change of more women in
the workforce has led to increased household income and reduced time to
prepare meals, leading to a need

for more convenient and prepared food.
She talked about traceability systems and added that advances in
information technology have allowed the industry to monitor, understand,
and streamline supply chains to respond to new consumer needs.


Sulton referred back to the questions offered by Dr. Schechtman and
opened the discussion regarding “Impacts of Biotechnology Along the Food
Production Chain.” Members discussed biotechnology and decommoditization.
Many noted that while markets have moved
more toward specific traits than
commodities, biotechnology has not led to decommoditization. Further,
various applications of biotechnology involve new traits that create or
respond to specialty markets. One member noted that, for some crops like

genetically engineered varieties might be sold as commingled
commodity, rather than traditional varieties. Others mentioned that many
specialty crops are not genetically engineered and that specialty programs
can create enhanced value. Another member comm
ented that biotechnology
traits affect commodity markets by creating further diversification or an
addition of classes within those markets.

Members also focused on issues of communication. Some members have
observed that biotechnology has increased commu
nication, especially
between the different levels of the food production chain, including
developers, growers, retailers, and consumers. One member stated that
increased communications has helped developers consider customers farther
downstream than the fa
rmer and therefore to respond to consumer needs.
One member said another result is increased segregation in the marketplace.
Members considered aspects of international communication, noting the
importance of communicating the US safety system to customers

consumers in other countries. Another member raised written contracts
between different elements of the food production chain as an important
method of communication.

Several discussed certification, by the government or third parties, as a way
to com
municate a trait to consumers or perform product traceback through
the food production chain. Members said that the source of this information
is important, emphasizing that the safety message should come from the
government and third parties can certify o
ther attribute claimed by third
parties. One member highlighted consumers’ interest in safety, and noted
that some consumers and organizations see a need for increased
communication about some additional issues that may not be addressed by
the regulatory s
ystem. For example, future products, such as transgenic
animals, involve ethics issues that cannot be quantified with scientific risk
assessments currently used to review and regulate products.

XI. Looking Forward, Information
Sharing, and Planning Next S

Ms. Dilley remarked on the valuable discussion on the first two topics
introduced to the committee. Dr. Schechtman conveyed that USDA would
consider the topics raised during the first meeting and work to create a
framework to bring back to the committ
ee for organizing future discussions.

Specific action items mentioned by members included:

Creating a list of references provided by committee members;

Developing a list of common terms and definitions that would be
modified and added to over the course o
f the committee’s work;

Developing an outline of options for a committee report; and

Drafting an overall work plan to be discussed during the next plenary

Mr. Hegwood asked for the committee’s input on the meeting format and the
use of presenta
tions to generate discussion. A member replied that
presentations are useful, and added that involving subgroups in setting the
agenda and choosing speakers would be an additional improvement to help
focus future topics and bring in other stakeholder issue
s. Another member
suggested that speakers should be invited for the beginning of meetings so
members could consider their presentations throughout the meeting. Dr.
Schechtman responded that the first meeting was a special case, requiring
attention to many
administrative issues, and that he hopes to incorporate
members’ perspectives in organizing subsequent meetings.

A member asked Mr. Hegwood to comment on how the committee should
deal with crosscutting biotechnology issues that fall within the context of t
coordinated framework but not solely within the purview of USDA. Mr.
Hegwood advised that the committee need not limit discussions based on
questions of agency jurisdiction, noting that USDA has a broad interest in

XII. Closing Remarks an
d Wrap

Dr. Layton thanked all the members for their attendance and teamwork, and
encouraged all AC21 members to contact her between meetings with ideas or
questions. She then adjourned the meeting at approximately 4:45 p.m.

Attachment 1

Facilitator’s Draft Discussion Summary from Day 1

Attachment 2

ation by Dr. Scott Deeter

Attachment 3

Presentation by Mr. William Horan

Attachment 4

Presentation by Dr. Elise Golan