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16 States Urge More Action From Aventis

Food: The firm looks to spin off unit responsible for altered StarLink corn, but analysts downplay move.

November 16, 2000|KEN THOMAS | ASSOCIATED PRESS

DES MOINES, Iowa — Sixteen state attorneys general are pressing the company that developed StarLink corn to do more to compensate farmers and grain elevators for losses incurred after the genetically modified strain showed up in the food supply.

Meanwhile, the parent company, Strasbourg, France-based Aventis, announced plans to sell or spin off the developer, Aventis CropScience of Research Triangle Park, N.C. Aventis said the move would allow it to focus on its pharmaceuticals, which include allergy drug Allegra.

Analysts downplayed any connection between the StarLink controversy and the company's spinoff plans, saying Aventis had weighed a possible sale before the scandal arose. The decision follows similar moves by rivals AstraZeneca, Novartis and Monsanto Co. to abandon the idea of grouping health care and agriculture under one roof.

"I think what you're seeing is the recognition that drugs have a higher growth rate than agriculture does," said James Wilbur, managing director of Salomon Smith Barney in New York.

The agrochemicals business proved troublesome for Aventis after StarLink corn was found in taco shells, prompting a massive recall. The Environmental Protection Agency has yet to approve the corn for human consumption because of concern it might cause allergic reactions.

Iowa Atty. Gen. Tom Miller on Wednesday urged CropScience to establish claims-handling procedures to compensate farmers and elevators for any losses linked to the corn.

"Our goals are to protect the food chain, to keep the grain-handling system running smoothly to 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 company has agreed to pay farmers 25 cents per bushel over normal local prices for StarLink and "buffer corn"--crops grown near the genetically modified corn--but not commingled corn. Aventis also is reimbursing the Agriculture Department for the cost of shipping and storing the corn to make sure it goes to livestock or industrial uses.

Aventis said Wednesday that it takes the concerns raised in the letter seriously and would continue to work with farmers, elevator operators and grain handlers on a case-by-case basis. The company has acknowledged that some farmers did not know about restrictions on the corn's use.

Aventis last week estimated the cost of recovering the crop at "significantly below" $1 billion.

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