By William McCall

AP Business Writer

PORTLAND, OR (AP)--They've done it with soybeans and corn. Now wheat is on the list for a little genetic engineering, and Oregon State University is offering its expertise to Monsanto Co. in exchange for some control over whatever kind of crop results.

"We're developing an agreement that essentially puts OSU in control," said Jim Peterson, a plant genetics professor at the Corvallis school. "Nothing will be released commercially without our approval."

Oregon State will provide advanced varieties of wheat to Monsanto, and the St. Louis-based biotechnology company will engineer it to come up with a strain that needs less of the popular weed-killer Roundup.

Researchers say using less weed-killer will make wheat cheaper to produce and reduce harm to the environment.

After Monsanto creates the altered variety, Oregon State will evaluate it for yield and to make sure it's safe to use.

"It has tremendous potential for environmental benefit," Peterson said.

If the research is successful, the key to putting it into production will be consumer acceptance, officials say.

"Wheat farmers want to embrace biotechnology," said Darrell Hanavan, executive director of the Colorado Association of wheat Growers and chairman of a joint national wheat industry committee on biotechnology.

U.S. wheat Associates, the National Association of wheat Growers and the wheat Export Trade Education Committee recently adopted a biotech policy that emphasizes testing, commercial concerns and a cooperative research effort among biotech companies, universities and the industry.

"If we want to embrace this technology, we also have to make sure we've got acceptance," Hanavan said. "We can't just sit on the sidelines and say we want it in hopes the market will accept it."

The stakes are huge.

Farmers exported 1.09 billion bushels of wheat to more than 100 countries last year, Hanavan said. At an average market value of about $2.50 per bushel, that amounted to more than $2.7 billion in foreign sales alone.

Just in Oregon, sales of one variety, soft white winter wheat, amounted to $150 million--with 90 percent exported to Asia and the Middle East, according to Mark Hodges of the Oregon wheat Commission.

"With the caveat that the market accepts GMO products, it will serve to revolutionize the future of crop production," Hodges said.

But many commercial buyers have been reluctant to embrace genetically modified organisms, or GMOs, as engineered wheat and other products are called.

The Japanese, in particular, have rejected food from crops created with biotechnology. So have many European countries, and even some U.S. companies have turned down some genetically engineered foods, including Frito-Lay Inc. and McDonald's.

Growers and Monsanto believe that altered crops eventually will find a market, and that research and tests will safeguard the public.

Monsanto officials said they could not comment on details because the company is in the middle of a federal Securities and Exchange Commission-ordered "quiet period" during completion of a merger with Pharmacia Corp.

But Mike Doane, a leader of Monsanto's engineered wheat project, said the company has conducted more than 5,000 field trials for biotech products since 1987, all according to federal Animal and Plant Health and Inspection Service regulations.

"Other than to say we're in the research and development phase of this project, it's too early to release any information," Doane said.

"But I can say that the more consumers know about biotechology, the more accepting they are," he said.

Still, some researchers urge caution.

Gary Muehlbauer, a molecular geneticist at the University of Minnesota, which is also developing a deal with Monsanto similar to Oregon State, said scientists need to be very cautious with any kind of genetic manipulation.

"Although the testing for biotech products now is proving them fairly safe--at least there are no environmental or safety problems--I don't think it was that rigorous," Muehlbauer said.

"I think the public is right that we have to be careful about what we do, and they're right to tell scientists to be careful," he said. "And we've taken that advice."

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