GMOMG – MAY 11, 2015

Recently, Chipotle Mexican Grill became the first national restaurant chain to mandate the use of NON-GMO ingredients in their dishes. GMO stands for Genetically Modified Organism, and the debate surrounding GMOs and the global food supply has been a contentious one.

It’s a power technology to be sure and Chipotle’s announcement puts the topic back in the spotlight. One of our main objectives with this writing, however, is to first clarify what GMO actually means and what it does not mean.

GMOs were first introduced in the mid 1990’s, and the concept is simple enough to understand. Favorable traits from the DNA of one species are inserted into the genes of another animal or plant. As a result, the animal or plant receiving these traits often exhibits more favorable qualities which can better serve the engineer’s purposes. Genetic modification can alter a wide variety of characteristics in plants and animals to suit any particular situation and the possibilities are endless.

Take the exotic example of genetically modified goat’s milk. Spider silk is one of the strongest materials in nature, but having a viable way to produce it efficiently on a commercial scale did not exist. Researchers attempted to solve this problem by inserting a spiders’ dragline silk gene into a goat’s DNA. When the goat produces milk, the milk would contain the silk protein which could then be used to manufacture a web-like material called Biosteel.

This is what it means for something to be genetically modified. What people should not confuse GMO(s) with is the issue of using antibiotics. Antibiotics are often employed by farmers to treat sick animals. Crowded and unsanitary conditions often characterize the typical non-organic farm that raises animals. These conditions lead to health problems which require farmers to treat their animals with antibiotics. The antibiotics get absorbed into the bodies and bloodstreams of these animals and the fear is human ingestion may lead to a buildup of resistance. It is standard protocol to implement “withdrawal time” before the animal treated with the antibiotic can be made available for consumption. This “withdrawal time” refers to the amount of time it takes for the antibiotic to metabolize so that the concentration within the animal is reduced. Even taking this into account, it is still an unsettling process present in the operations of our food supply. But again, people should not confuse this issue with the issue surrounding GMOs.

All of this leads us to the issue of food labelling and some of the confusion that can arise when shoppers see the label “Non GMO Project Verified” vs “USDA Organic” amongst others. Understand that just because something is labeled “Non GMO” does not necessarily mean it is “Organic”. Furthermore, “USDA Organic” should be considered to be a more comprehensive set of standards for measuring food ‘wholesomeness’.

Now that we’ve made the distinction between what GMO is and what it is not, we can approach the debate solely on whether GMOs are good or bad. Most of us are familiar with the more common GMOs relating to corn, soybeans, and other staple food crops. And the mere idea that our food is first being taken in the lab, genetically tampered with, and grown for our consumption can seem unsettling. A large part of the argument against GMOs isn’t necessarily “rooted” in the science itself but rather the industry that GMOs perpetuate. In recent articles written in response to Chipotle’s move, a Pew Research Center poll is often cited which says that 88% of scientists believe genetically modified foods are safe compared with only 37% of the public. In an article in Fast Company titled, “The Story Behind Chipotle’s Dubious Decision To Defy Scientists And Go GMO-Free”, Chipotle’s communications director, Chris Arnold, responded by pointing to a peer-reviewed study published in Environmental Sciences Europe that says there is no scientific consensus on GMO safety. Reputable bodies including the World Health Organization, the US National Academy of Sciences, and the American Medical Association have all endorsed the safety of genetically modified food. However, animal testing at the American Academy of Environmental Medicine found evidence that GM foods can cause immune dysregulation, altered liver function, and changes in the pancreas, kidney and spleen. Who’s right?

Aside from the science itself and whether GMOs are safe to consume, the growth in GMOs has given rise to a host of hotly debated issues from increased herbicide usage, impact on yields, as well as the financial and social impacts.

Has the adoption of GMOs over the years really increased yields for farmers? Again it depends on who you believe. The International Service for the Acquisition of Agri-Biotech Applications claims that GMO crops increased production by more than $98B from 1996 to 2011. Conversely, A Union of Concerned Scientists review of 12 academic studies covering 20 years revealed no evidence of increased yields among GM crops except Bt (Bacillus thuringiensis)-corn.

What have been the social and financial benefits/pitfalls resulting from GMO’s growth? The GMO giants that dominate the industry, Monsanto, Syngenta, and Pioneer have profited mightily over the last 20 years, and that’s been good for investors in the entire agriculture supply chain. GMOs also purportedly allow farmers to grow more crops which results in the feeding of more people while using less land. Downsides to the argument include potential for litigation in the instance when GMO seeds spread naturally to non-GMO farms. The non-GMO farmer can be held liable for growing these invading seeds without paying a royalty. Also, the costs of these new seeds may be unaffordable to poorer farmers in developing countries potentially putting them out of business. Do the social and financial benefits offset each other?

The herbicide, Glyphosate, was introduced by Monsanto in the 1970s and marketed under the name Roundup. Glyphosate is controversial because of the World Health Organization’s recent stance to classify this substance as “probably carcinogenic to humans”. It seemed to make sense that if you could plant GMOs that are engineered to be resistant to Roundup, which was a highly capable weed killer on its own, then you could reduce the overall usage of other herbicides that were previously required. The problem is, as the adoption of GMOs increased over time, it directly translated into increased usage of Roundup. Also, over time these weeds develop higher resistance to current herbicide treatments, leading farmers to increase not just the amounts of herbicide needed, but also pesticides as well. These more tolerant weeds are often referred to as ‘superweeds’. The point surrounding global herbicide usage is one of the stronger arguments to curtail GMOs, and clearly more sustainable methods to deal with the propagation of superweeds is needed as an alternative to potentially carcinogenic chemicals.

GMOs will likely continue to make news as more and more restaurant chains and food providers seize on Chipotle’s move and decide whether they, too, want to vote for or against carrying GMOs in their offerings. The purpose of this piece is to dispel some of the common misunderstandings relating to technology of GMOs and to isolate the science of GMO from other health related issues impacting our food supply, i.e., antibiotics. There are certainly other points to consider in the whole GMO debate in addition to the ones we listed here. Given the significance food plays to the sustainability of our planet, it is an issue everyone should be aware of.


Sustainability is at the core of everything we do on behalf of our clients. Please click below to learn more about what sustainability means to AJF Financial Services

Check the background of your financial professional on FINRA's BrokerCheck.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Advisor Launchpad to provide information on a topic that may be of interest. Advisor Launchpad is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

*Securities offered through American Portfolios Financial Services. Member FINRA and SIPC.