Statement of

John B. Ohlrogge, PhD
Professor
Department of Botany and Plant Pathology
Michigan State University
East Lansing, Michigan
Before the Senate Committee on Agriculture, Nutrition, and Forestry
October 6, 1999

Thank you Mr. Chairman for the invitation to appear today before the Committee. My name is John Ohlrogge and I am a Professor at Michigan State University.

I would like to share with you today a vision about how genetic engineering will transform crop plants from their traditional role of providing low-cost food and fiber toward a much more diverse and profitable role of producing an array of higher-value products. This vision arises from three simple observations. First, plants can be viewed as efficient chemical factories which use sunlight and carbon dioxide to produce an extremely wide range of organic products. Second, US agriculture has excelled in producing oils, starch, protein and fiber in surplus quantities for commodity markets at extremely low cost. And third, recent research advances in biochemistry, genomics and genetics have resulted in unparalleled new opportunities to engineer plants to produce entirely novel, value-added products.

Approximately 80 million acres of transgenic crops were planted worldwide this year. Included in this was at least 50% of the soybean acreage in the U.S., over 60 % of the canola acreage in Canada, nearly one-third of the U.S. corn crop and over one third of the cotton acreage in the U.S. Clearly, transgenic crops are already making an immense impact on agriculture, particularly in North America. This year, land area greater than the state of Iowa was planted with transgenic crops.

Over 90% of the transgenic seeds which are now planted for commercial production have been genetically engineered to provide either herbicide or pest tolerance. These traits represent the first phase of crop genetic engineering. The traits now available in most transgenic crops provide farmers with either lower costs of production or higher yields or both.

Phase two of plant genetic engineering is just beginning but can be expected to have even greater impact on agriculture than phase one. Phase two can be considered the engineering of plants, not for higher yields, but to provide new or improved products or more complex traits. This second phase promises to have a much larger economic impact on agriculture because it will provide farmers the opportunity to produce higher-value products for new markets. Over the past several decades, a most serious problem for farmers in the U.S. has been the low prices which they have received for agricultural commodities. The low prices result at least in part from the high efficiency of modern agriculture and the over-capacity of our agricultural production systems.

As you know, dealing with overproduction by price supports and acreage "set-aside" programs has cost taxpayers many billions of dollars each year. Although the herbicide or pest tolerant crops produced during phase one provide benefits to farmers who use them, these improvements have not addressed the central issue of low prices. Although low farm prices benefit consumers, they have also made it very difficult for small farms all over the world to compete with the new large "industrialized" agribusinesses. Thus, the technological successes of agriculture have until now largely contributed to the trend toward ever lower commodity prices. However, phase two of plant genetic engineering presents the opportunity to offer farmers new, high-value cash crops and begin a reversal of this trend.

Plants can be considered as sophisticated chemical factories which use sunlight as a power source and atmospheric carbon dioxide as the feedstock. With these abundant and inexpensive inputs, together with a highly evolved agriculture, our crops produce complex organic molecules such as starch at a cost of 10 cents per pound and oils at a cost of 25 cents /lb. For centuries, plants have also provided the building blocks for the chemical and pharmaceutical industry. In 1930, 30% of the industrial carbon-based chemicals were derived from plants, but by 1960 this proportion had been reduced to less than 1% as the petrochemical industry developed cheaper or improved alternatives. However, two major factors suggest this trend may reverse. First, the costs of agricultural products have declined steadily over the past 75 years, while oil prices have generally increased. Today, a pound of corn now can be produced for less than the cost of a pound of crude oil. Second, we now have the ability through genetic engineering to tap into the vast chemical diversity produced biologically. Within the plant kingdom alone, over 50,000 different organic chemical structures are produced and the microbial world provides even more opportunities. The recent demonstration that, using bacterial genes, a biodegradeable plastic can be produced in plant leaves at levels up to 14% of dry weight was a dramatic demonstration of the potential to radically alter plants to allow the production of new products. Biologically produced products can also provide the chemical industry with much greater diversity than available from the comparatively limited structures found in crude oil.

Can plants really take over synthesis of many products we now obtain from petrochemicals and is biotechnology ready to provide phase two of plant genetic engineering? Although a number of areas are under development, engineering of plant oils is perhaps the most advanced toward commercial production of new plant products. There are now two examples of transgenic plant oils in commercial production which have been modified using a single gene. Calgene used genetic engineering to develop high-lauric acid canola which can be used in a variety of applications including specialty foods and soap and detergent manufacture. DuPont developed a transgenic soybean variety with very low saturated fatty acids and nutritionally ideal unsaturated fatty acids. Such oils are both healthier for human consumption and are extremely stable making them useful as biodegradable lubricants. Both of these advances rested upon federally-funded basic research conducted at Universities and demonstrate the very first examples of the power of this technology and where we are headed. Several large companies in the U.S. and Europe have clearly realized the potential of this technology and are investing heavily in research to engineer crops for production of new products. One of the larger investments in plant biotechnology recently announced was $2 billion dollars by BASF, the worlds largest chemical manufacturer and based in Germany.

What are some other potential products which biotechnology can engineer into plants? My laboratory is working closely with industrial chemists to develop plants which will provide the feedstocks for new types of polyurethanes, nylon with stronger and more flexible fibers, and biodegradable lubricants. These are not niche markets. The U.S. now produces nylon, polyurethane and other plastics to supply multi-billion dollar markets. Producing the chemical building blocks for these products in crops instead of from imported petroleum will provide very large new demand for U.S. farm production. For example, to produce in crops the monomers for current U.S. nylon manufacture would involve 10-20 million acres and create over $2 billion annually in new farm income. Furthermore, these products will enter domestic markets meaning that production of chemical building blocks in plants will benefit several sectors of the U.S. economy and our society. Farmers, will benefit because they will have new markets for their products, the chemical industry will benefit because it will have new structures on which to build improved plastics and other products and the consumer will benefit because more of our products will be based on renewable and biodegradable resources that do not contribute to landfill overflow and higher atmospheric CO2 levels.

In summary, continued U.S. leadership in plant biotechnology will provide American farmers and consumers with many new opportunities to harvest a rich supply of new, higher-value products in their fields. For American consumers, domestic production of plant-based petroleum replacement products will help address the frightening trade deficit that is threatening our nation's future prosperity. Plant produced chemicals will bring the benefits of a cleaner environment for all of us. We appreciate the strong support provided by this committee for plant research which is making these enhanced crops possible.