Farm Press Release
For release WEDNESDAY, November 15, 2000.
Contact Eric Tabor -- 515-281-5112.
Miller Leads States Pressing for Further Action by Aventis on "StarLink" Corn
In an effort led by Iowa, sixteen state attorneys general say "Aventis must take additional action to effectively, quickly, and fairly meet its responsibilities for the consequences of marketing StarLink corn."
Iowa Attorney General Tom Miller is leading a group of sixteen state attorneys general urging Aventis CropScience - the maker of "StarLink" genetically modified corn - to take further action to protect the interests of farmers, grain elevators, consumers and others in responding to the revelation that StarLink corn has gotten into the grain chain and food supply.
Miller and the other attorneys general sent a letter drafted by Miller's Farm Division to Aventis Tuesday (see letter below) confirming measures the company has promised to take in response to the situation and urging Aventis to take additional steps -- including establishing claims-handling procedures so farmers and elevators can obtain speedy compensation if they incur costs or losses as a result of StarLink corn.
"We told Aventis that our goals are to protect the food chain, to keep the grain-handling system running smoothly and reduce any additional losses, and to protect the economic interests of farmers, elevators and others in the grain industry," Miller said. "Aventis has taken some initial steps, but we urge them to go further."
The letter was signed by attorneys general from AL, CT, IL, IA, KY, MD, MI, MN, MO, NE, NM, ND, OH, OK, SD, and TN.
StarLink corn must be kept separate from other corn because it is not approved for human consumption. StarLink was altered with a bacterial gene to make it resistant to corn borer caterpillars, but Aventis's EPA license for StarLink does not permit use for human food because the agency could not rule out a link between the StarLink protein and food allergies. StarLink grain can be used for animal feed and non-food industrial products.
Miller organized a group of states to work cooperatively on the StarLink situation. He obtained various assurances from Aventis on Oct. 18, but questions remained whether the terms applied to farmers and elevators nationwide. On October 27, Miller's office organized a conference call with Aventis by many states, in part to clarify that terms the company had assured to Iowa were available nationwide. The joint letter to Aventis Tuesday listed several assurances the company made to the attorneys general, including:
- Aventis has extended the deadline for farmers to participate in the "StarLink Enhanced Stewardship Program" (SES), and agreed that farmers who participate in it do not waive any rights to recover any additional damages they may incur as a result of growing StarLink corn. Within the SES program, Aventis will pay 25 cents per bushel for StarLink and "buffer corn," but not for commingled corn. However Aventis will pay logistical costs (such as transportation and storage costs) for StarLink and commingled corn delivered to approved sites. Aventis also will "work with" growers if there are value discounts assessed against their commingled corn.
Miller said: "We consider it important for Aventis to say it will 'work with' growers, elevators or others if there are losses in value, because it indicates the company acknowledges certain responsibility for the situation."
- "Buffer growers" - growers who grew corn within 660 feet of StarLink corn - also are eligible to participate in the SES Program for the buffer strip corn, if the corn is contained or fed on the farm. Again, Aventis will pay storage and transportation costs for delivering buffer corn and commingled corn to approved delivery sites. If buffer growers use StarLink Logistics (working with Aventis to move grain to approved sites), then Aventis agrees to "work with" them if there are value discounts for commingled grain.
- Grain elevators that receive StarLink corn will be paid for additional transportation, demurrage and testing costs incurred in getting StarLink and commingled corn to approved delivery points. Aventis will "work with" grain elevators if there are value discounts for StarLink and commingled grain delivered to an approved site.
Our letter restated those assurances by Aventis and asked Aventis to confirm them in writing, both so there is no misunderstanding of the company's responsibilities and so that it is completely clear that the same terms are available to farmers and elevators anywhere in the country," Miller said.
"We all view those assurances as important, but they are only a first step," Miller said. "We think Aventis must take additional action to effectively, quickly, and fairly meet its responsibilities for the consequences of marketing StarLink corn."
The attorneys general urged Aventis to take further steps, including:
- Aventis should quickly establish a claims handling system to compensate farmers, elevators and others who incur costs. The attorneys general said they had reports that claims to Aventis are not being paid expeditiously. "Delays in payment can jeopardize the financial position of many in the grain handling industry," the letter said. "Undisputed claims should be paid within 30 days. This claims handling system should be made widely available, preferably on the Internet," it said.
- Aventis should markedly increase logistical capabilities to prevent serious disruptions of the grain handling system. The attorneys general said "the food system can be protected and economic losses can be reduced" if StarLink and commingled grain can be moved efficiently to approved sites for feed and industrial uses. To reach that goal, Aventis should identify more approve sites, hire additional staff to answer questions and remove bottlenecks, provide additional testing resources, and improve its communications about StarLink Logistics through the Internet and other means.
- "Aventis must take further, concrete steps to accept responsibility for economic losses," the attorneys general said. "It is inevitable that StarLink corn and commingled corn will suffer some loss in value," at a scope to be determined. They said they wanted to have further discussions with the company about Aventis's pledge to "work with" producers, buffer growers, grain elevators and others concerning such loss in value.
"Aventis has made important assurances, but the company needs to take further steps to fulfill its responsibilities in this situation," Miller said.
Miller also said that farmers and others could take several measures to minimize the impact of the StarLink situation. He advised farmers to attempt to use Aventis's StarLink Logistics System in marketing their corn, since the company has taken a position that it will pay for logistic costs or loss in value more readily if corn is marketed via StarLink Logistics. Farmers should keep good records of payments and losses, and keep seed bags and any correspondence about planting, selling and handling StarLink or commingled grain. Miller also encouraged farmers to test any grain if there is a question of StarLink contamination.
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Letter to Aventis CropScience - the maker of "StarLink"
November 14, 2000
Vice President, Commercial Operations
Aventis CropScience, USA LP
2 T.W. Alexander Drive
Research Park, N.C. 27709
Via facsimile: 919/549-2500
Dear Mr. Wichtrich:
We, the Attorneys General of Iowa, Alabama, Connecticut, Illinois, Kentucky, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota and Tennessee, write to convey our concerns regarding your company's decision to market StarLink corn and the negative impact that decision continues to have on our states' farmers, grain elevators, consumers, and others. We thank you for recognizing the very serious nature of this problem and cooperating with us to seek solutions.
We have several objectives in dealing with this issue. First, we want to protect the food chain by ensuring that StarLink corn and StarLink corn commingled with other corn (commingled corn) is directed to approved uses. Second, we want to facilitate smoother operation of the grain handling system in order to reduce as many additional costs as possible. Finally, we intend to protect the economic interests of our farmers, elevators, and others in the grain industry who have suffered losses as a result of StarLink corn.
Assurances Made to States
We are encouraged by the October 18th assurances made by Aventis to Iowa Attorney General Tom Miller and the statements you made during the conference call with states on October 27th to extend those assurances to producers and elevators in all states.
We think it is important to restate those assurances so there is no misunderstanding of Aventis' responsibilities in all states:
- The October 20, 2000, deadline set for farmers to decide to participate in the StarLink Enhanced Stewardship Program (SES) has been extended, as has the May 1, 2001, deadline for on-farm feeding with the SES program. Discussion continues to establish a new deadlines.
- Farmers who participate in the SES Program are not waiving any rights to recover any additional damages they may have incurred as a result of growing StarLink corn.
- Within the SES Program, Aventis will provide logistical support (including payment of the costs of transportation, storage, demurrage, etc.) relating to commingled corn stored on the farm that is subsequently delivered to an approved location. However, the $0.25 per bushel incentive or Logistics Service Fee will be payable only for actual StarLink corn and buffer corn contained within the commingled lot. The portion of the commingled corn stored on the farm which is not StarLink corn or buffer corn will not be included in the SES Program.
In addition, if growers utilize StarLink Logistics, then Aventis agrees to "work with" growers should any value discounts be assessed against their commingled grain. If growers do not utilize StarLink Logistics, then Aventis will "work with" growers with respect to such value discounts on a case-by-case basis.
- Growers who can verify to Aventis that they grew corn within 660 feet of StarLink corn (buffer growers) will be eligible to participate in the SES Program regarding the corn grown in the buffer strip as long as the above-referenced corn is contained and/or fed on-farm. Aventis will pay the storage and transportation costs associated with delivering the buffer corn and corn commingled with buffer corn to an approved delivery location.
In addition, if buffer growers utilize StarLink Logistics, then Aventis agrees to "work with" buffer growers should any value discounts be assessed against their commingled grain. If buffer growers do not utilize StarLink Logistics, then Aventis will "work with" buffer growers with respect to such value discounts on a case-by-case basis.
- If grain elevators received StarLink corn, Aventis will work with them to assure that both StarLink and commingled corn are directed to appropriate approved delivery points. Aventis will pay for additional transportation, demurrage, and testing costs incurred by a grain elevator in directing the above-referenced grain to an approved delivery point. Aventis will "work with" grain elevators to address problems related to discounts in value for StarLink and commingled corn delivered to an approved delivery site.
6. Aventis will make the sites on the approved delivery site list available on a case-by-case basis and as necessary to assist delivery of StarLink corn and commingled corn to those locations.
7. Aventis will provide testing and test kits at no charge to growers and elevators who request them, in those cases where there is a demonstrated need for testing.
We would request that you confirm these assurances in writing to each state which has signed this letter by November 17, 2000.
Further Steps Aventis Needs to Take
We appreciate Aventis' cooperation in providing the assurances just discussed. However, we view this as a first step. We think Aventis must take additional action to effectively, quickly, and fairly meet its responsibilities for the consequences of marketing StarLink corn.
1. Liquidity of Farmers and Grain Elevators. The grain handling system is a "just-in-time" inventory system that requires very rapid payments to all participants to maintain cost effectiveness and efficiency. Delays in payment can jeopardize the financial position of many in the grain handling industry. While Aventis has agreed to pay storage, transportation, and demurrage costs incurred by farmers, elevators, and buffer growers, we have reports in our states that claims made to Aventis are not being paid in an expeditious manner.
There is a critical need for Aventis to establish a procedure whereby those incurring costs can receive quick compensation. As soon as possible, Aventis should establish a claims handling system to rapidly handle the paperwork associated with repaying these costs. Aventis should make clear exactly what documentation is required for payment. Undisputed claims should be paid within 30 days. This claims handling system should be made widely available, preferably on the Internet.
Also, Aventis should make it clear that submission of claims and acceptance of payment by a person under this system is not a waiver of the right of that person to recover any additional damages incurred as a result of growing StarLink corn.
2. Logistical Support Needed to Make Grain Handling System Work. Aventis has stated that its chief goal in this situation was to efficiently direct StarLink corn and commingled corn to sites where it could be used for approved feed and industrial uses. In this way, the food system can be protected and economic losses can be reduced We share these goals.
While we appreciate your explanation of StarLink Logistics on the October 27th conference call, we are concerned that Aventis has not dedicated adequate resources to prevent serious disruptions of the grain handling system. We would ask Aventis to markedly increase the logistical capabilities presently in place to address several problems we have experienced in some of our states. First, Aventis needs to identify more approved sites. Second, Aventis needs to hire additional staff to answer questions and to address bottlenecks, such as rejected rail cars. Third, Aventis should provide additional testing resources so that StarLink corn and commingled corn is not shipped to unapproved sites. Finally, Aventis should improve its communication efforts about StarLink Logisitics with interested parties through the Internet and other means.
3. Loss in Value of StarLink Corn and Commingled Corn. It is inevitable that StarLink corn and commingled corn will suffer some loss in value (scope is yet undetermined). While Aventis has agreed to "work with" producers, buffer growers, and grain elevators concerning this loss in value, we feel Aventis must take further, concrete steps to accept responsibility for these economic losses. We would welcome the opportunity to discuss this issue in the coming weeks.
It is impossible to state that these measures are themselves a definitive list of what Aventis will need to do to address its responsibilities associated with the decision to market StarLink corn. We have appreciated your willingness to cooperate with us on this difficult issue and we hope you will continue to cooperate with us on the matters raised in this letter.
Thomas J. Miller
Iowa Attorney General
State of Connecticut
Albert B. Chandler III
State of Kentucky
Jennifer M. Granholm
State of Michigan
Jeremiah W. "Jay" Nixon
State of Missouri
Patricia A. Madrid
State of New Mexico
Betty D. Montgomery
State of Ohio
State of South Dakota
State of Alabama
State of Illinois
J. Joseph Curran, Jr.
State of Maryland
State of Minnesota
State of Nebraska
State of North Dakota
W. A. Drew Edmondson
State of Oklahoma
Paul G. Summers
State of Tennessee