USDA to buy seed tainted with StarLink bio-corn Updated 9:30 PM ET March 7, 2001 By Randy Fabi WASHINGTON (Reuters) - The U.S. government said Wednesday it would spend about $20 million to purchase American corn seed suspected of being contaminated with StarLink, a bioengineered corn variety banned from human food. The USDA found that less than 1 percent of U.S. corn seed for spring planting was tainted with traces of StarLink's Cry9c protein, the key component that protects young plants from destructive pests. Industry officials discovered traces of the StarLink protein as they prepared to ship bags of seeds to American farmers for spring planting. The bioengineered corn is approved only for animal feed. StarLink, made by the Franco-German pharmaceutical group Aventis, was barred by U.S. regulators for human use because of concerns that it might cause allergic reactions. The discovery of the gene-altered corn in taco shells last September triggered the eventual recall of more than 300 U.S. foods. At the request of the USDA, the American Seed Trade Association surveyed its 250 member companies to pinpoint how much StarLink had become commingled with seed corn. The USDA said the tainted seed corn had already been withdrawn by companies and that none was sold to farmers. "Companies involved have recovered and taken control of all lots of hybrid corn seed found to have this protein," USDA said. USDA TO BUY TAINTED SEED As a precaution to keep any contaminated seed off the market, the USDA's Commodity Credit Corporation will immediately offer small seed companies between $35 to $50 for each bag tainted with the StarLink protein. Ralph Linden, USDA's assistant general counsel, told reporters the department estimated about 400,000 bags of corn seed would have to be purchased. Each bag contains about 80,000 kernels of seed. "If only one seed tested positive in a bag, we are buying the whole bag," Linden said. The cost of the buy-back was estimated at $15-$20 million. The USDA said it would destroy the confiscated seed. Dale Moore, USDA chief of staff, said Monsanto, Dow , Pioneer Hi-Bred International and Garst opted not to participate in the program since they have licenses to sell StarLink corn. A Monsanto spokesman denied that it had a license to sell StarLink corn. Moore said the USDA was not ruling out seeking reimbursement from Aventis for the buy-back program, although no negotiations were underway. Aventis declined to comment on the buy-back program. "We are and will do all we can to channel StarLink corn and corn commingled with StarLink to approved uses." RENEWED WORRIES FOR U.S. CORN EXPORTS The fresh StarLink controversy has renewed worries among U.S. commodities traders that American corn exports could be hurt. Japan, the biggest buyer of U.S. corn, briefly halted purchases last autumn because of the contamination. At the Chicago Board of Trade, corn futures for May delivery closed lower Wednesday, down 3 cents at $2.20-1/4. USDA officials sought to reassure foreign buyers, saying it had no evidence that tainted U.S. seed was sold overseas. U.S. seed companies exported approximately $85.1 million worth of corn seed in 2000, up from $74.8 million the previous year, according to the USDA. "Because of the relatively small amount of seed involved, this action will not affect the price or the availability of corn seed this year," USDA said. Last week, the American Farm Bureau Federation, the nation's biggest grower group, urged farmers to demand documentation from seed dealers that corn purchased for spring planting is free of StarLink. Vast amounts of the U.S. corn harvest were accidentally contaminated with StarLink last year by elevators, grain handlers and farmers who failed to segregate the corn from other varieties. INDUSTRY, LAWMAKERS PRAISE USDA ACTION Some lawmakers praised the USDA for taking action to halt the spread of StarLink seed before the planting season. "We cannot stand another market disruption like StarLink caused last year," said Sen. Tom Harkin, an Iowa Democrat, referring to the reluctance of foreign buyers to buy seed they feared might be tainted with StarLink. "USDA's plan to get seed corn with traces of StarLink off the market should help significantly to reduce the risk of such a repeat," Harkin said. Aventis, which tried to buy back as much StarLink as possible last year, faces at least two lawsuits filed by Midwestern farmers who contend they were hurt by a drop in overall U.S. corn prices and exports caused by the flap. Some 17 states signed an agreement with Aventis in late January that requires the company to pay farmers and grain handlers for losses during the next four years. Japanese importers indicated in late February they might also take legal action against Aventis to seek compensation for costs of testing corn shipments to detect any contamination. The U.S. Environmental Protection Agency is currently considering a request by Aventis to grant temporary approval for StarLink to be used in human food products. An independent science advisory panel said in December it still had reservations about the safety of StarLink for humans.