KEEPING THE SUGAR BARONS SWEET

KEEPING THE SUGAR BARONS SWEET

March 2001

Sweetness is one of the primary senses of our taste buds. It is produced mainly by sucrose, which occurs naturally as a minor constituent of most fruits and vegetables. Refined sucrose, which produces the isolated sensation of pure sweetness, was introduced into the human food system mainly as a luxury item some 500 years ago, and it has only become a major source of energy in the human diet over the past 100 years. Global production has doubled in the last 50 years and is rising steadily, particularly in the South. World consumption of sucrose now amounts to an average of 21 kilos per person per year, and is rising steadily.

Sugar cane was originally the only source of refined sugar so the tropical and sub-tropical regions of the world where it grows once held a monopoly of supplies. Over the past 200 years this monopoly has been slowly reduced by competition from alternative sources of sucrose such as sugar beet, and, more recently, alternatives to sucrose, of which there are three types:

1. Bulk calorific sweeteners: such as isoglucose (corn syrup) and inulin.

2. Synthetic super sweeteners: chemically-synthesised and non-calorific, such as sacch-arine and aspartame.

3. Plant super sweeteners: plant-based and non-calorific, such as thaumatin and stevioside.

Cane sugar is now grown on more than 15 million hectares in more than 100 countries in the tropics and subtropics. It accounts for roughly two thirds of world sugar production. Sugar beet is now grown on some 10 million hectares in over 50 countries, almost entirely in the temperate regions of the Northern hemi-sphere. Isoglucose, which is 170% sweeter and 30% cheaper than cane sugar, is produced mainly in the United States (US), where it makes up 42% of the sweetener market. Although the soft drinks giants like Coca-Cola and Pepsi-Co replaced sucrose with isoglucose in the US some twenty years ago, they have not managed to do the same in the European Union (EU), where protectionist policies ensure that isoglucose is allowed only a tiny niche market. Whilst the production costs of cane sugar and isoglucose are broadly comparable, beet sugar costs more than twice as much to produce (see table). It is therefore not surprising that beet production is protected, because a free market in sweeteners would be devastating to the beet industry.

Free world trade in sugar products would certainly wipe out beet production in Europe and could even wipe it out worldwide. Even when transport costs are taken into account, the EU beet industry is still uneconomic. So why is there no panic in the EU beet sector? Why has no other country taken the EU sugar regime to the World Trade Organisation (WTO)? Why, in particular, is the US not campaigning on behalf of its biggest soft drinks manufacturers for an end to EU protectionism? And why are some of the biggest biotechnology companies investing so much in engineered beet?

Part of the reason lies in the fact that the EU is the worlds largest producer of sugar, the worlds fourth largest importer of sugar and the world’s second largest exporter of sugar. So much for the idea that trade is about profiting from comparative advantages in production. The EU is the most important single world player in sugar and sweeteners, even marginalising the influence of the US and Russia. When Brussels takes a decision about sugar or its substitutes, the effects are felt throughout the world, affecting the take-home pay of the poorest workers on the most exploitative sugar plantations in some of the world’s poorest nation. It also affects the cost of a shopping trolley of food in the supermarkets of all of the world’s richest nations apart from the US. The complexities and contradictions within the EU sugar regime affect practically the whole world.

Another factor keeping beet producers in business relates to the US production costs for beet and cane sugar. It costs almost twice as much to produce cane sugar in the US as it does anywhere else in the world, and even more than it costs to produce beet sugar in the US, which in turn is almost twice as costly to produce as isoglucose. Yet the rapid increase in isoglucose use in theUS from 1980 onwards has not stopped the domestic production of both cane and beet sugar from slowly increasing from 2.5 million tons of each in 1974 to 3.6 million tons of each in 1997. Per capita consumption of sugar in the US has also increased over the same period. The brunt of the US isoglucose revolution was actually taken by cane exporters to the US, not by American farmers. Philippine sugar exports to the US declined from 1.75 million tons in 1980 to 0.29 million tons in 1991 and it has stayed at this level ever since In order to protect its domestic cane and beet production, the US simply dumped some of its developing country suppliers.

Ten years ago it was thought that biotechnology would have significant socio-economic impli-cations in the sweetener sector. It looked as though sugar would be replaced by genetically-modified (GM), non-calorific, teeth-friendly alternatives. In fact, this shift has not happened - at least not yet. There are three main reasons why this has not come about:

1. The protectionist politics of the biggest players in the sweetener sector (eg Tate & Lyle, Unilever) have severely limited the introduction of sucrose substitutes into the market.

2. The genetic engineering industry over-estimated its technical abilities at the start and has been technically unable to deliver designer sweeteners to the consumer-led food sector.

3. The genetic engineering industry has encountered heavy political opposition from consumers and environmentalists, especially to the introduction of GM foods.

Somewhat surprisingly, research and development of GM sweeteners remains a relatively low priority for the sugar giants. A decade ago it looked as though biotechnology was going to be the engine of innovation in the sweetener sector, but actually the chemists still dominate the field. In 1999, the applications for sugar and sweetener patents accounted for 9% of the total in the agri-food sector. However, only 4% of these applications were for GM sweeteners whilst 70% were for the industrial production of alternative sweeteners. The remaining 26% covered innovations in agri-cultural production (16%) and refining (11%), mainly of sucrose and isoglucose.

There was an initial burst of research interest in GM sweeteners in the 1980s, during which the invention of a GM super-sweetener that could replace sucrose seemed to be the modern equivalent of the alchemist’s dream. Companies are taking their time to bring GM sweeteners to market. By the mid 1990s, the genetic engineering industry had turned its attention to sucrose, thinking that profits were more likely to be found in the protected sweetener sector. The industry has, furthermore, focused on the most protected part of the sucrose sector, namely beet (see box opposite), partly because beet is an easier plant to engineer than cane. Key biotechnology companies such as Monsanto and Astra-Zeneca are clearly inves-ting in GM sugar beet on the assumption that the WTO will never open up the protectionist preserve of beet sugar and expose it to world market conditions. There is a profound conflict of interest between capital invested in sugar beet and capital invested in any other source of sweetness. To date, the traditional sweetener industry based on sugar has been remarkably successful at seeing off the establishment of any competition.

Genetic engineering is seen as the only hope of making beet production competitive with other sweeteners. The regulatory authorities in the US and the EU have been as helpful as possible to the sugar industry, by insisting that refined sugar is an inert chemical containing no genetic material so it does not need to be labelled if it comes from GM plants. This sits somewhat uncomfortably with the sugar industry’s insistence that refined sugar is a "natural food," but might work as a strategy to keep consumers in the dark. But it could also backfire spectacularly. Consumers tend to get angry when they discover that they have been kept in the dark, and they can react with devastating economic effect simply by not putting certain items in their shopping trolleys.

Sucrose has more than maintained its market over the last two decades partly because the bulk and super-sweetener alternatives cannot substitute for sucrose in food processing at a time when more and more food worldwide is being consumed in processed form. However, with the increasing market penetration of products such as sucralose, which is 600 times sweeter than sucrose and suitable for use in many processed foods, it is not clear whether sucrose will continue to compete. The world’s most successful super-sweetener market is the US, with artificial sweeteners accounting for 17% of the market.

Our consuming passion for sweetness has a bitter history. Although sugar is no longer produced by slaves, a cane worker’s lot has changed very little from those days. Most plantation workers still find it difficult, if not impossible, to feed their families on the wages they get. Many face persecution and oppression for demanding anything better. The sugar market bears exploitation as its trademark. While GM sweeteners have not yet made any serious impact on the sugar market, it may only be a matter of time before they do. In some ways, the loss of export markets to alternative sweeteners might even be a blessing in disguise for many Southern countries, if their poisoned plantations could be transformed into productive farmlands for the local economy. But GM sweeteners come armed with their own array of exploitative practices and injustices.

But there are some positive signs. It is now possible to buy organically grown cane and beet sugar that is less damaging to the environment. It is also possible to buy fair trade sugar that guarantees better livelihoods for cane workers. Now we need to demand organic fair trade sugar that is produced by environmentally and socially responsible methods - and insist that the food industry uses it in processed foods.

Main sources:

* H Hobbelink (1991), Biotechnology and the Future of World Agriculture, Zed, London.

* N Simmonds, ed. (1976), Evolution of Crop Plants, Longman, London.

* FAO, Production Yearbooks 1980-2000, Food & Agriculture Organisation of the UN, Rome.

* FAO, Trade Yearbooks 1980-2000, Food & Agriculture Organisation of the UN, Rome.

* ISO, Sugar Year Books 1980–2000, International Sugar Organisation, London.

* R Jenkins et al (1996), Socio-Economic Implications of New Biotechnology in the EU

Sweetener Sector, DG XII, European Commission, Brussels.

* RAFI (1987–2000), RAFI Communique, Rural Advancement Fund International, Pittsborough, NC, USA.

* Landell Mills (1994). World Survey of Sugar and HFCS, Landell Mills Commodities Studies.

* USDA, Sweetener Market Data, 1980-2000, United States Department of Agriculture, Washington, USA

* Mintel (1991), Sugar and Artificial Sweeteners, Mintel Market Intelligence, London.

* ED & F. Mann, European Union Sugar Statistics 1990-2000, ED & F Mann Sugar Ltd, London.

* Various articles from the International Sugar Journal, 1995-2000.

* Derwent Biotechnology Abstracts, 1990-2000, Derwent Publications, London.

A FAMILIAR TALE OF GENES GOING ASTRAY

Sugar cane is a perennial grass with no single genetic origin. The plant appears to have derived, either spontaneously or by human intervention from two wild plants - Saccharum spontaneum and Saccharum robustum. Various S. spontaneum varieties with 40-128 chromosomes have been found in Africa, India, South-East Asia and on some mid-Pacific islands. S. robustum varieties with 60 or 80 chromosomes (and on occasion up to 200 chromosomes) have been found throughout the Indonesian-Malaysian archipelago from Asia to Australia.

It seems that sugarcane was first used as a food in New Guinea. From here the cane was taken westwards to the mainland of Asia and eastwards to the isolated islands of the Pacific, with different consequences. In Asia, S. officinarum crossed with the naturally-occurring S. spontaneum to form S. sinensis, a relatively thin cane that formed the basis of sugar production in Asia and most of the rest of the world until the latter part of the 19th century. Meanwhile S. officinarum, known also as the "noble cane" because of its greater size, spread eastwards through the Pacific islands, where Europeans first encountered it during their voyages of discovery in the 18th century.

The two main varieties of cane remained geographically and genetically separate for at least two millennia until European breeders brought them together in the late 19th century. The modern sugar cane is a very different plant from the sugar cane of history. The 20th century breeding programme nearly defeated its own aims by relying on a very narrow breeding stock. In the 1970s, it was discovered that modern canes throughout the world were founded on no more than twenty S. officinarum and less than ten S. spontaneum varieties. Some thirty new S. spontaneum varieties have been incorporated into recent breeding programmes to broaden the genetic base of the crop, but the ways in which cane varieties cross are still not fully understood. Modern canes have between 100–125 chromosomes and derive almost entirely from a handful of breeding centres. Despite the fact that it is grown throughout the tropics, there is very little genetic variation from one continent to another.

BEET’S UNLIKELY RISE TO STARDOM

Beetroot, mangold, chard and sugar beet all originated from the same plant, probably the wild seakale beet, which grows in the coastal regions of the Mediterranean. The Greeks and Romans both played a role in its domestication. Sugar beet resulted from the selection and breeding of fodder beet in the late 18th century. Beets producing 6% sugar had been developed by 1775 and that might have been the end of the story had it not been for the Napoleonic Wars. The British Navy cut off France from its Caribbean suppliers of cane sugar and Napoleon responded in 1811 by ordering a crash programme for breeding and growing beet. When the cane sugar trade to France was restored after 1815, France restricted imports in order to protect the domestic production of beet sugar. Other European states were quick to see the strategic military importance of having a domestic supply of sugar at a time when the British held a virtual monopoly of sea power. Similar policies for the protection of beet were swiftly adopted by other European nations. In effect, the current deeply protectionist EU sugar regime dates back in all its essentials to 1815. Equally, the continuing British reliance on cane sugar is a leftover from the era of its naval supremacy.

There are many new plant-based sweeteners in the pipeline, including thaumatin, monellin, hernandulcin, stevioside, miraculin and brazzean. These are all natural "super-sweeteners," so called because they are thousands of times sweeter than sucrose. The extraction of these sweeteners directly from the plants is expensive, so most research has gone into isolating the sweetness genes and engineering them into bacteria. Thaumatin, which is derived from the West African katemfe bush, is already on the market. The genetically engineered route for the production of thaumatin is far cheaper than harvesting it. But both Unilever and Tate & Lyle seem to be waiting to see what happens to the market for genetically modified foods before switching over to GM production.

Biotechnology companies have a choice between presenting their sweetener products alongside the chemical alternatives, thus risking association with all the carcinogenicity scares that regularly afflict this sector, or presenting their products the product of modern biotechnology. In the case of thaumatin, industry has opted for the former. It is clear that neither the chemists nor biotechnologists are yet able to deliver the "dream sweetener" that does everything consumers would want of it, but with no harmful health or environmental effects. The estimated cost of developing such a sweetener is so high that only a handful of multinational corporations could possibly do it. Even global giants like Johnson & Johnson and Tate & Lyle had to team up to finance the development of sucralose.

ENGINEERING A FUTURE FOR SUGAR

The biotechnology of beet improvement is economically reliant upon the continuation of protectionist sugar policies. The fact that just about every major biotechnology company in the world is investing in beet biotechnology says something about the likelihood of reform. Most of the research has focused on resistance to the herbicides – glyphosate, gluphosinate and sulphonylurea – but some work has also been done on resistance to frost and drought as well as to virus and fungus attacks. However, wary of the negative public reaction in Europe to genetically engineered food crops, the industry claims that it has no plans to use genetically engineered beet sugar in "the foreseeable future." Beets that can synthesise other sugar polymers besides sucrose have been field-trialed but are far from commercialisation. Increasing the productivity of beet, thereby making its production more competitive, would seem to be an obvious goal for beet biotechnologists

One product is of particular interest to the food industry. Fructan genes can be engineered into beet , which is far cheaper than producing it from sucrose in bioreactors. Fructan tastes and feels like sugar, but contains zero calories. In theory, fructan-producing beet could escape the EU quota system on the grounds that it does not contain human-digestible calories. However, because it is not digestible it must seek market clearance under the legislation for food additives. Other "non-food foods" such as Olestra (a non-digestible fat) have had difficulty getting through the EU regulatory system in the past, though they have obtained marketing consent in the US.

Genetically engineered cane is still at a preliminary stage. The plant is a high polyploid with a large genome and numerous, varying numbers of chromosomes, making the mapping of its genome a highly complicated task. Even in conventional breeding programmes cane does not conform to normal genetic expectations. However, antibiotic- and herbicide-resistant markers have now been successfully inserted into cane, and glufosinate-resistant cane has been field trialed. Such innovations are of little commercial interest. Most weeds are smothered by cane and weed killers are actually not used against weeds in the cane fields but to kill off the residual leaves of the cane plant immediately prior to harvest, thus making harvesting easier.

Of potentially greater interest to cane farmers would be plants resistant to standard pests such as the sugarcane borer (Diatraea saccharalis), the sugarcane beetle (Euetheola humilis), sugarcane mealybugs (Saccharicoccus sacchari, Dysmiciccus boninsis), and the sugarcane delphacid (Perkinsiella saccharicida). The engineering of insect-resistant plants currently relies almost exclusively on the use of Bacillus thuringiensis, but as insects become resistant, attention is likely to shift to another bacterium, Photorhabdus luminescens. Such ventures are fraught by insect resistance problems and normally result in the total loss of the poison as a biologically useful control. Even with annuals, such strategies only delay the onset of insect resistance. No one has devised a resistance management strategy for a perennial like cane.

PATENTS AND PIRATES PREDICT THE FUTURE

Going down the GM route offers companies the advantage of turning sweetener production into an industrial process that is no longer dependent on raw materials from the South and which can be protected from competition by patenting. Whilst some of the new raw materials for the manufacture of GM sweeteners have been invented in the laboratory, most of them are straightforward discoveries which have been pirated from local peoples’ gardens, along with the knowledge of how to grow and harvest them. Thaumatin and Brazzein have both been the subjects of such a fate. In theory it is only possible to patent an invention, not a discovery. But in practice the theft and privatisation of local peoples’ knowledge by giant corporations, otherwise known as biopiracy, is now more or less institutionalised.

The direction taken by the search for the perfect sweetener will probably be determined more by patent laws than by technical questions or biological factors. Research is almost entirely devoted to the industrial synthesis of sweeteners rather than growing them in the field. Tate & Lyle did set up katemfe plantations in Ghana, Liberia and Malaysia in the 1970s and still processes the berries, which are frozen and flown to the UK for the rather expensive extraction of the thaumatin protein. However, it was Unilever that first extracted the genetic code for thaumatin and inserted it into the E. coli bacterium. There are currently three food multinationals, two biotechnology companies and three universities with patents or applications on thaumatin but there appears to be no further research on the katemfe plant as such. The plant is now little more than a source of thaumatin sweetness genes, and the local knowledge that led bioprospectors to the plant and how to process it is now enshrined in corporate patent applications.

The story of Brazzein provides a similar story. Brazzein is a protein 500 times sweeter than sugar derived from a West African berry. Unlike other non-sugar sweeteners, brazzein is a natural substance and does not lose its sweet taste when heated, making it particularly valuable to the food industry. It came to the attention of industry after a US researcher observed people and animals eating the berries in West Africa. Researchers at the University of Wisconsin have been granted US and European patents for a protein isolated from the berry of Pentadiplandra brazzeana, the genetic sequence coding for it and the transgenic organisms to which it has been added. Subsequent work has focused on making transgenic organisms that produce brazzein in the laboratory, thereby eliminating the need for it to be collected or grown commercially in West Africa.

Nektar Worldwide and ProdiGene, a spin-off of Pioneer Hi-Bred International, the world's largest seed company, have genetically engineered corn that produces large amounts of brazzein. They estimate that future demand will be met with one million tonnes of GM corn instead of any source from West Africa. This is a clear example of how the patent system completely disregards local knowledge and innovation of Southern peoples by permitting researchers to claim to have invented something they merely isolated and reproduced in a Northern laboratory.