The company that mishandled genetically engineered corn in Iowa and Nebraska agreed yesterday to pay a $250,000 fine, the first such penalty the federal government has ever imposed, and to spend as much as $3 million to destroy tons of soybeans that might have been mixed with the corn.
The outcome is a severe financial hit for tiny ProdiGene Inc. of College Station, Tex., and government administrators said it was meant in part as a signal to other companies that they must comply scrupulously with regulations designed to keep plants containing drugs or industrial enzymes out of the food supply. Many environmental and consumer groups had questioned whether the government was doing enough to regulate such plants.
"It's a significant demonstration, I think, of the rigor of our regulatory system," said Bobby R. Acord, administrator of the animal and plant health inspection service at the Agriculture Department. "I think we've taken the right action for the right reasons."
The $250,000 fine was half what it could have been. Acord said the corn, which had been modified to include a protein that serves as a pig vaccine, did not make its way into the food supply. The Agriculture Department is studying additional safeguards to prevent such cases, he said.
"We have learned some valuable lessons," Anthony G. Laos, ProdiGene's president and chief executive, said in a prepared statement. "We hope the entire industry will benefit from our endeavors as we work with USDA on an enhanced compliance program."
The government will seize about 500,000 bushels of soybeans at a warehouse in Aurora, Neb., that may contain small amounts of genetically modified corn plants. ProdiGene, which admitted that it failed to do what was necessary to keep gene-altered corn out of the beans, had hoped to sell the soybeans for fuel. That plan proved unworkable, however, so the government will incinerate the beans at ProdiGene's expense.
The company had already bought and destroyed 155 acres of crops in Pocahontas County, Iowa, admitting that it failed to take adequate safeguards there to prevent the spread of pollen from nearby gene-altered corn.
In a settlement announced yesterday, the company agreed to submit to a rigorous oversight program in its future efforts to grow gene-altered corn containing drugs or industrial chemicals. Its employees and contractors will get extra training to make sure they know how to comply with the conditions of government permits.
The settlement will also force ProdiGene to undergo an annual audit of its compliance with government rules, and the company will have to post a $1 million bond to guarantee its financial responsibility for any future problems.
ProdiGene is a leader among a small number of biotechnology companies that have spent more than a decade introducing new genes into plants, mostly food plants. The genes contain instructions for making proteins not meant as food. In some cases they are pharmaceuticals, to be refined out of the plants, and in others they are enzymes designed for use in industrial processes.
The biotech industry is battling conservation groups, which have raised environmental concerns about "pharming," and food-processing groups, which fear expensive product recalls. ProdiGene recently committed to moving its production out of the Corn Belt, and other companies are planning to do the same to keep their plants as far as possible from crops grown for food.
Most industrial or pharmaceutical proteins are readily digested and would be unlikely to harm people, even if consumed in large quantities. But such harm is theoretically possible, and for most of the gene-altered plants in question, human-safety studies haven't been done to rule it out.
Acord and Lester M. Crawford Jr., deputy commissioner in the Food and Drug Administration, said they meant the government's actions in the case to signal a policy of "zero tolerance" for food containing plant material such as ProdiGene's. "This sort of stuff does not belong in food," Crawford said.