BULGARIA: TOUGH GMO LAW HAMSTRINGS BIOTECH INDUSTRY

UNCLAS SECTION 01 OF 02 SOFIA 001173

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SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: TBIO KSTH ECON EAGR ETRD PREL BU
SUBJECT: BULGARIA: TOUGH GMO LAW HAMSTRINGS BIOTECH INDUSTRY

SOFIA 00001173 001.4 OF 002



1. (SBU) SUMMARY: Bulgaria currently has some of the most
restrictive legislation on biotechnology in Europe,
surpassing even the European Union's stringent standards. In
addition to prohibiting the commercialization and release
into the environment of modified products banned by EU
member countries, Bulgaria's law bans almost all forms of
biotech production and field experiments, and prohibits
laboratory research on a number of strategic Bulgarian
crops. Although parliament passed the law in March 2005,
Bulgarian authorities have failed to establish the Bio-
Safety Commission required to implement the law. As a
result, all potential investment and research projects
involving agricultural biotechnology in Bulgaria are
currently on hold and the country is experiencing a vacuum
in the biotechnology industry. Pro-biotech supporters hope
to pressure parliament to revise the law and to establish
the Commission, but expect little progress until after
Bulgaria accedes to the EU. Needless to say, the law has a
harmful effect on both U.S. exporters of biotech products,
and potential American biotech investors here. END SUMMARY

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BULGARIA TAKES HARDLINE STANCE TOWARDS AGRICULTURAL
BIOTECHNOLOGY
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2. (SBU) In March 2005 the Bulgarian parliament passed one
of Europe's most restrictive laws on biotechnology. The law
prohibits the production, commercialization, field testing
or research of Genetically Modified Organisms (GMO) for the
following three crops--tobacco, grapevines, and damask
rose--considered by authorities to be "strategic" crops in
which Bulgaria has a unique comparative advantage.
According to Atanas Atanassov, Director of the Agro-Bio
Institute (ABI),one of the leading organizations in biotech
research, Bulgaria is the only country in the world to
impose a ban on biotech research. Additionally, the law
bans production, commercialization and field testing of many
other transgenic crops, such as wheat, cotton, vegetables
and perennial fruit. Fines for violating these bans are
severe with penalties amounting to 1 million leva (USD
657,000) for breaching the ban on the cultivation of GM
plants or fruits. This sanction applies also to companies
that violate the ban by releasing antibiotic-resistant
plants or seeds into the environment. Additionally, the law
places tight restrictions on the cultivation of GMOs that
receive approval from the Bio-Safety Commission by requiring
a buffer zone of 30 kilometers around transgenic crop
plantings. This requirement is particularly onerous given
the country's small size and the fact that only
approximately 30 percent of land in Bulgaria is arable.


3. (SBU) The law essentially prohibits almost any activity
related to products of agricultural biotechnology. However,
it does allow an opening for planting of corn, soy, and rice
on the condition that an application and detailed risk
assessment is submitted and approved by the Bio-Safety
Commission, the principle executive agent for biotech
issues. The problem, however, is that the Ministry of
Environment has not formed the Commission since the law was
approved more than a year ago. As a consequence, no GMO-
related investments are allowed and the work of Bulgaria's
biotech industry is currently "frozen," according to Atanas
Atanassov. Atanassov told us that the law and the lack of
the Commission have had a devastating effect on his
institution and the biotech industry in general. Most of
ABI's biotech projects are currently on hold due to the law,
and the ban on research has set his Institute back 50 years.
Bulgaria "would have in been the forefront" of GM research
if it were not for the law, said Atanassov.


4. (SBU) Until recently, Bulgaria was doing advanced
research on BT corn and BT potatoes with support from U.S.
firms like Monsanto and Pioneer, and was considered to be
among the best in the field in Eastern Europe. The law,
however, has contributed to a rapid decline in GM production
in Bulgaria. One testament of this is the ever-dwindling
production of GM corn in the country. In 2001, there were
13,000 hectares (or 32,110 acres) of GM corn cultivated. In
2002, this amount shrank to 6,200 hectares (or 15,314 acres)
before falling to 2,000 hectares (or 4,940 acres) in 2003.
In 2004, no GM corn was cultivated. The law has forced ABI
to suspend an ongoing research project on GM cotton that it
was doing with the U.S. company Delta.

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DIVIDE IN SCIENCE COMMUNITY HELPS EXPLAIN TOUGH GMO LAW
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5. (SBU) The original draft law, first proposed to
parliament in late 2004, was much more biotech-friendly and
scientifically informed. However, prior to final approval

SOFIA 00001173 002.2 OF 002


of the law, parliamentary deputies were swayed by GMO-wary
scientists, along with various green NGOs, to pass a much
more restrictive law. According to Atanassov, a major
factor for this reversal was the lack of unity among the
scientific community regarding agricultural biotechnology,
and the fact that the President of the Bulgarian Academy of
Science (BAS),Ivan Juchnovski, was a leading opponent of
the GMO-friendly law. According to Atanassov, Juchnovski
sent various "experts", who knew little about the science of
GMOs, to the Environmental and Agriculture Parliamentary
Committees to critique the draft law. These experts
propagated the view that "the harmful effects of GMOs on
human health and the environment is a fact." BAS insisted
on a ban on the cultivation of modified crops since "no
convincing evidence as to the safety of GMOs" exists.
Taking BAS's concerns to heart, the current law's stated
priority is "to protect human health and the environment"
regardless of the existing economic interests or the
unavailability of sufficient scientific data."


6. (SBU) According to an ABI representative, the anti-GMO
lobby in Bulgaria is bolstered by an overall lack of
knowledge regarding biotechnology in the government and
society. Efforts to reverse this trend have been made more
difficult by the fact that the perception of GMOs has become
more negative in recent years, partly due to unfavorable
coverage by the press, according to ABI. Moreover, many
people believe Bulgaria has more to gain economically from
developing a niche in the organic sector. They argue that
this sector should be the country's first priority because
the EU market demand for organic products will outstrip the
demand for genetically modified products, the common wisdom
being that EU member states are firmly anti-GMO. However,
Atanassov told us that four articles of the law are contrary
to EU legislation and may have to be amended once Bulgaria
accedes to the EU.

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AREAS OF PROMISE FOR BIOTECHNOLOGY IN BULGARIA
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7. (SBU) There are a number of crops in Bulgaria that could
greatly benefit from the use of biotechnology. One is
cotton, of which Bulgaria is a net importer. The local
cotton industry is not likely to survive without the use of
GMOs because the industry is too labor-intensive and
expensive for producers to turn a profit. The same applies
to rapeseed, of which the current varieties are too low-
yielding and sensitive to the low winter temperatures in
Bulgaria. Rapeseed is particularly attractive given its
potential as a source of bio-diesel fuel. These two crops'
biggest advantage lies in the fact that they are not food
products, which could make them more acceptable and
attractive as potential GM products. Likewise, erosion-
resistant trees and bushes could help to prevent flooding,
which has caused millions of dollars of damage this past
year.

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COMMENT
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8. (SBU) The best chance of changing Bulgaria's restrictive
GMO law, according to Atanassov, would be to force the
Environment Minister, Djevdet Chakurov, to finally form the
Bio-Safety Commission. At that point the Commission, which
is expected to be made up of scientists, could begin a more
informed debate on the advantages and disadvantages of GMOs.
Atanassov, however, is skeptical that anything will happen
on this front before Bulgaria's EU accession (expected in
January 2007). He and his supporters are currently
developing a strategy to form a political-science lobby
group to pressure parliament to amend the law. With the
support of Deputy Minister of Agriculture Svetla
Batchvarova, they have sent a letter to the EU Commission
asking if the law is consistent with EU law. Atanassov
believes Bulgaria could face penalties if the law is shown
to be out-of-step with EU policy, which might just be the
stick GMO supporters here are looking for to convince the
government to revise the law. We will continue to work with
local biotech supporters to open the market and research
opportunities for genetically modified products. End
Comment

KARAGIANNIS