Recombinant Bovine Somatotropin in Europe and the USA
By
Jos Bijman

Since February 1994, recombinant Bovine Somatotropin (rBST) has been used commercially in the USA to enhance milk productivity. In the European Union (EU) the use of rBST is banned until the end of 1999. In both regions, this new agricultural biotechnology has generated much political debate. Despite similar outcomes of various scientific studies, government responses to rBST have varied, due to political, cultural and economical factors. This article evaluates the EU debate and the US experience.

Some facts about rBST Dairy cows naturally produce a protein hormone called bovine somatotropin (BST). It plays a role in the distribution of feed to vital bodily functions like growth and lactation. In the early 1980s, the natural gene governing the synthesis of BST in cows was isolated and cloned by the US private biotechnology company Genentech. Since 1982 it has been possible to produce large quantities of BST through genetically engineered bacteria. The hormone that is harvested from the bacteria (through a purification process) is called recombinant bovine somatotropin (rBST).  When rBST is administered to lactating dairy cows it results in an increase in milk production of about 10 percent. Productivity increases vary considerably depending on the particular dairy herd, with larger increases occurring with better management. This productivity increase is obtained by an improved efficiency of feed utilization. Cows treated with rBST need more feed. For optimal results of rBST treatment, good quality feed and sufficient protein rich feed is required.  Foreseeing the commercial opportunities for rBST, four large pharmaceutical companies started extensive R&D-programmes to develop a commercial rBST product. These companies were Monsanto, Eli Lilly, American Cyanamid and Upjohn. After several years American Cyanamid and Upjohn discontinued there R&D, while Monsanto and Eli Lilly’s veterinary pharmaceutical division Elanco have developed commercial products.  Monsanto’s version of rBST, sold under the brand name Posilac, has been sold in the USA since February 3, 1994. It is administered to healthy cows every two weeks, beginning during the ninth week of lactation. Assuming a 310 to 315 day lactation period, this implies 18 injections per cow per lactation period. One injection contains 500 mg of rBST and costs US$ 6.60 (US$ 0.47 per cow per day). It claims to lead to a 2.5 to 7.5 kilogramme increase in daily milk production.

In the USA and in Europe, a large part of the public debate about agricultural biotechnology has focused on rBST, not only because rBST was one of the first commercial agro-biotechnological products, but also because it involves many of the issues that are also important for other agro-biotechnological products. At least five major issues can be distinguished that have played a role, at one time or another, in the rBST debate in particular and the agro-biotechnology debate in general: food safety, impact on natural environment, socio-economic impact, animal welfare and ethics.

Food safety
Perhaps the most important concern over agro-biotechnological products is their safety for human consumption. In a situation in which food supplies are abundant and concerns over health aspects of food are growing, consumers in industrialized countries become more and more critical about the food safety aspects of new food production and processing technologies. In the case of rBST, many studies have been carried out on the human safety aspects. Most scientists agree that the use of rBST does not pose any threat to human health. Still, some scholars disagree. Particularly the higher concentration of insulin-like growth factor-1 (IGF-1) has worried some health scientists. IGF-1 stimulates cell division in the infant’s intestines and thus promotes intestinal development. Increased amounts of IGF-1 in the milk of cows treated with rBST could exert significant effects on the intestines of human consumers.
The fact that rBST is a hormone has caused additional health worries in Europe, even though BST occurs in milk naturally. The European ban on the use of all hormones in animal production, together with some incidents of illegal use that appeared in the newspapers, have made the European consumer very sensitive to the word ‘hormone’ itself.

Natural environment
Another major issue in the agro-biotechnology debate comes from the concern about the impact of modern agricultural production methods on the natural environment. In the case of rBST, the environmental concerns are related to the intensification of dairy farming and the concomitant concentrated emission of minerals and ammonia.

Socio-economic impact
A third issue is the socio-economic impact of rBST on the structure of agriculture, on rural communities, and on the domination over agriculture by large agrochemical and pharmaceutical companies. Before rBST was introduced, it was expected that the increase in milk production of 10 to 15 per cent per cow would benefit large farms more than small farms. Although rBST is administered to cows individually, and therefore its application is assumed to be scale neutral, realization of the productivity enhancement requires rather intensive monitoring and management of feed rations, milk production, animal health, breeding programmes, and overall system coordination. These monitoring and management activities and the equipment needed are not scale neutral. Larger farms tend to have better management and are more likely to have computers for monitoring feed intake, health and production per cow. Many believe that rBST will increase the size and reduce the number of dairy farms. Since many small farms would go out of business, this process would also negatively affect the viability of rural communities.

Animal welfare
In industrialized countries attention for animal welfare and animal rights has increased over the years. In the case of rBST, numerous studies have been conducted on its impact on animal health and welfare. The vast majority of these studies indicate that no adverse effects are to be expected. Veterinary advisory boards in both the USA and the European Union (EU) have approved the use of rBST. However, a few studies do indicate that there may be a negative impact on the health and welfare of the cow. Part of the uncertainty results from the health effects that coincide with higher milk production itself, like a higher incidence of mastitis, an inflammation of the udder. One of the welfare issues in this debate is that rBST is administered to the cow by injection, every two weeks. Thus, the debate lingers on and a definite answer cannot be given.

Politicization and regulation of rBST
In addition to the debate about the factual impact of rBST, there is also the issue of how to balance advantages and disadvantages. This is basically an ethical and political discussion, where values and beliefs of the various stakeholders and of society in general are important. To evaluate a biotechnology like rBST on an ethical basis, one has to know the costs and benefits to various stakeholders and how they are perceived, as well as the advantages and risks for the future.
Given the broad diversity of societal issues that are at stake in this debate, a wide range of interest groups have entered into the discussion. The main issue in this political debate is whether biotechnology products can be approved under existing legislation, or that new legislation should be implemented to avoid adverse impacts. As both proponents and critics see rBST as a test case for regulation of agro-biotechnology in general, the introduction of rBST has become a very politicized issue.
Because of the politicization of agricultural biotechnology, and the differences of opinion even among scientists, regulating rBST has not been a straightforward issue. Consequently, different countries have come up with different regulations on rBST. Government officials have to take into account the reserved public attitude towards agricultural biotechnology in general, the targeted critique by special interests groups, and the uncertainty over consumer reaction to the introduction of milk from cows treated with rBST. At the same time, government agencies dealing with the promotion of science and technology, seconded by private biotechnology industry, do not want the development of biotechnology to be hampered by strict regulations.
While the USA, Mexico and many other countries have approved the use of rBST, the EU has placed a ban on its sale and use. Other countries, like Canada, have yet to make a decision. But even within countries, regional governments may demand additional regulation, as is the case with the different labelling requirements in a few states of the USA.

rBST in the EU
The EU Council in 1994 decided to ban the use and sale of rBST until 31 December 1999. The EU decision was based on two considerations. First, the introduction of rBST would not be in line with the reform of the Common Agricultural Policy (CAP), as it would negatively affect dairy and beef markets. Second, a strong aversion to the use of rBST prevailed among consumers. The Council feared, together with the European Commission and the European Parliament, that the consumption of dairy products and beef would decrease considerably and that the image of dairy products would be negatively affected. Most consumers also found it hard to accept the need to increase milk production while the EU was already suffering from overproduction. Another issue supporting an extension of the existing 1990 ban was the ongoing uncertainty about the impact of rBST use on the health of cows.
Although no international comparative studies exist on how European consumers would react to rBST-derived dairy products, the EU-12 Eurobarometer studies on public attitude towards biotechnology may provide some insight. In the 1991 and 1993 editions of the Eurobarometer, questions were asked about the knowledge and risk perception of biotechnology and genetic engineering. From these studies it appears that the public is more likely to accept genetic engineering of plants and micro-organisms than genetic engineering of animals. Although rBST has nothing to do with genetic engineering of animals, the combination of biotechnology and animals makes the average consumer wary.
A large part of the differences in public attitude towards biotechnology can be attributed to cultural differences and variation in fundamental, ethical values. Recent studies indicate that people’s attitudes toward modern biotechnology are based on fundamental values. In contrast to (scientific) knowledge, fundamental values remain relatively stable over time. From these studies one may cautiously draw the conclusion that the current negative attitude of Europeans towards rBST is likely to remain, and that on this basis the EU authorities will not easily lift the ban on the use of rBST after the year 2000.

Milk production quota in the EU
But the general attitude is not the only factor that will determine the future position of rBST in Europe. The future decision on the rBST ban is closely related to the future of the milk production quota system. Both the quota system and the ban on the use of rBST expire at the end of 1999. The quota system is a system of production rights under which all dairy farmers in the EU are allowed to produce up to a certain maximum amount of milk (the quota). For every kilogramme of milk in excess of the quota, a levy has to be paid to the European Commission. This levy is prohibitive in nature, as it is more than the price farmers receive for their milk.
In order to assess the potential socio-economic impact of the use of rBST in the EU, a recent study of the Agricultural Economics Research Institute (LEI-DLO) in the Netherlands developed qualitative scenarios for the dairy sector in the early years of the 21st century. The abolition of the quota system is expected to result in increased production and net exports. Additionally, an acceleration in structural change in the dairy sector towards more concentration of production, on farm as well as regional level, can be expected. The adoption of rBST reinforces these effects: more production and exports, lower internal prices, fewer but bigger dairy holdings, and more regional concentration of production. Those effects may be socially negative if the pace and extent of structural change exceeds certain limits, i.e., if many farmers are forced to leave the sector.
Abolition of the quota system and adoption of rBST are likely to contribute to improving the international competitiveness of the EU dairy industry, as it creates opportunities to profit from economies of scale in milk production. Such a structural development may be necessary if the EU wants to maintain current levels of production, while at the same time it has to lower export subsidies that are needed to sell excess produce on the world market. However, the competitiveness of EU dairy products also depends on quality aspects like food safety and animal welfare. In high income markets like Japan and Switzerland, consumers may not be willing to accept dairy products from rBST treated cows. Problems might arise, however, to separate milk produced with the use of rBST and milk produced without rBST, since it leaves no traces in the milk. It is expected that these high income export markets will become more important as export subsidies are reduced. Unfortunately, there is little information on consumer attitude towards rBST in the major export markets for EU dairy products.

rBST in the USA
After several years of controversy and debate, the Food and Drug Administration (FDA) approved the commercial use of Posilac, the version of rBST developed by the US company Monsanto, in November 1993. Commercial sales in the USA began in February 1994. After two years of experience with its use, a little more than 10 per cent of all US dairy farmers were using rBST. These farmers keep around one fourth of the 9.5 million US cows.
To date there is no evidence of any significant adverse consumer reaction in the United States, despite the debate in the news media prior to the approval of rBST. In fact, both milk production and consumption have continued to increase. It was originally expected that the adoption of rBST would increase total milk supply and thus would decrease milk prices. Lower milk prices would force small scale farmers out of business, because their fixed costs are higher. Milk prices at the farm level, however, remain at or slightly above levels of the period just before the approval of Posilac so far. Moreover, market determined milk prices are about 20 per cent higher than the government support price. In fact, farm-level milk prices have been consistently above the government price support level since the mid-1980s.
rBST has not been adopted evenly in all states of the USA. In some states in the north-eastern part of the USA, where labelling regulations have been approved, hardly any rBST is being sold. Most dairy processors in these states are producing high quality high price dairy products, and guarantee that the milk comes from untreated cows.
The adoption of rBST also depends on farm size. Based on the experience in three US states it can be concluded that adoption is highest among moderate size farms. In Wisconsin, the second largest dairy state, adoption of rBST has been much lower than the US average, 5.5 per cent adoption at the end of 1994 compared to 11 per cent nationwide. According to a study by the University of Wisconsin, this relatively low level of adoption of rBST was the result of the high level of politicization surrounding rBST in Wisconsin. Furthermore, this politicization process has been intertwined with underlying structural and organizational issues in Wisconsin. With an average of 51, herd size is much smaller in Wisconsin than in most other states and farmers tend to be slower to adopt new technology.
Other major milk producing states are California and New York. In California, adoption of rBST has been lower than national average because of the large herd size (on average 305 head per farm) and the corporate style operations. Hence, some Californian dairy farmers have been slow to adopt rBST since their employees have to milk large numbers of cows each day and cannot easily monitor the individual performance of each cow, as is done more easily on family farms with smaller herds.
In contrast, adoption has been relatively rapid in New York. In this state the average herd size is 66 cows. With moderate size herds, and mostly family farm operations that are smaller than the corporate farms in California, it is easier to administer rBST and monitor the performance of individual cows.
Cornell University has studied the economic effects of rBST in the state of New York. From this economic analysis of a relatively large sample of representative New York dairy farms, it is clear that farmers who adopt rBST have, on average, larger herds than state average and are more profitable than other farmers. With the adoption of rBST they increased productivity per cow and net farm income. Feed cost per pound of milk sold decreased for farmers using rBST, while it increased for non-adopters. Using rBST is relatively easy, but changes in feeding programme and selection of animals to be treated with rBST requires additional management time.

Relevance of US and EU cases for other countries
From the experiences in several states of the USA it becomes clear that adoption rates are not the same for all regions and farms, even though regulation by government authorities has set a common ground, due to politicization as well as the differences in industry structure. Consequently, if the EU were to lift the ban on rBST, it can be expected that it might lead to large differences in adoption rates and therefore in impact on the dairy farming industry given the large cultural and structural differences in agriculture in the countries of the EU.
If we extrapolate the experiences in the USA to developing countries, the farms most likely to profit from rBST are the modern, moderate sized dairy farms, which operate like dairy farms in industrialized countries. In general, effectiveness may be affected by the usually poorer economic and technical context (like veterinary and extension services). Whether rBST will be adopted also depends very much on the milk price and on the price of rBST itself and other inputs, such as compound feed. However, as can be concluded from the case of EU, it is very likely that adoption will not only be determined by technological factors or farm economics: cultural, political and national economic factors will have significant influence as well.
Jos Bijman

Agricultural Economics Research Institute (LEI-DLO), P.O. Box 29703, 2502 LS The Hague, the Netherlands. Phone (+31) 70 33 08 218; Fax (+31) 70 36 15 624; E-mail w.j.j.bijman@lei.dlo.nl

This article is based on: Siemen van Berkum, Jos Bijman, Marshall Martin and Berit Nygård (1996), The Future of Bovine Somatotropin in the European Union: A study on public attitude, dairy policies and competitiveness of the EU dairy sector. The Hague: Agricultural Economics Research Institute (LEI-DLO).