European Union Approves Bayer Genetically Modified Soybean

BRUSSELS -- The European Commission Monday approved imports of a genetically modified variety of soybean developed by Bayer AG (BAY.XE), a move that may help prevent European animal feed shortages in the coming years.

Without the approval, E.U. farmers would be effectively blocked from importing soybeans from the U.S., where millions of acres of the new crop, known under the code A2704-12, are expected to be planted next year. Importers would be unlikely to ship soybeans - a crucial source of protein in animal feed - from the U.S. for fear that their cargoes would be contaminated with the biotech soybean.

The approval, which lasts for 10 years, comes after the European Council couldn't agree whether to approve or reject the soybean for import, sending the final decision back to the commission under the E.U.'s complicated procedure for approving genetically modified crops. The commission usually accepts the decision of the European Food Safety Authority, which last year said Bayer's soybean was safe to import.

The E.U. is also considering whether to allow imports of another soybean that will be grown next year in the U.S., the Roundup Ready 2 soybean, developed by Monsanto (MON). The soybean must be approved for import before the end of the harvest in 2009, or importers might not be able to ship any soybeans from the U.S. due to fears that their shipments may be contaminated by a prohibited crop.

Over 20 new genetically modified soybeans are under development by the biotech industry, and farmers fear the E.U.'s biotech approval process, much slower than in the U.S., will eventually prevent them from importing soybeans into Europe from the U.S., once a biotech soybean is grown in the U.S. that hasn't received European import approval.

The situation has led the E.U. to consider allowing trace amounts of unapproved genetically modified plants in agricultural imports to maintain trade in soybeans and other crucial products. The E.U. imports about three quarters of its total soybean supply, mainly from the U.S., Argentina and Brazil.

-By Matthew Dalton, Dow Jones Newswires; +32 2 741 1487; matthew.dalton@dowjones.com