To many farmers it sounded like a dream come true: new, improved crops, genetically modified to kill pests with built-in insecticide.
But in Asia and Europe, they literally aren't buying it. In fact, they're paying extra for old, unimproved corn and soybeans.
As CBS Correspondent Wyatt Andrews reports, this growing concern over biotechnology in the food chain is also reflected in a new study, the first field study to show that America's favorite insect, the monarch butterfly, can die from the pollen of gene-altered corn.
Last year Cornell University scientists were the first to drop a bomb on the biotech industry, finding that gene-altered pollen from a crop called BT corn killed monarch caterpillars, when the pollen was applied in the lab.
But in this new study, Iowa State researchers let the BT pollen drift naturally, in the field. "This is the only plant in this area that the monarch caterpillar will feed on," says Laura Hansen, the study's co-author.
"Monarchs are dying from only a two-day exposure," said Obrycki of Iowa State University. "It's important because we show that with naturally deposited levels you can have mortality of the monarch larvae."
Iowa State researchers Obrycki and Hansen said their research showed monarch butterfly caterpillars were seven times more likely to die when they ate milkweed plants carrying pollen from BT corn, compared to conventional corn.
BT is short for bacillus thuringiensis, a naturally occuring soil bacterium that acts as a pesticide. The gene has been inserted into millions of acres of U.S. corn and cotton plants to repel the European corn borer, bollworms and other pests.
The researchers placed potted milkweed plants in and around BT cornfields to simulate naturally occuring conditions.
Pllen from BT crops also drifts onto nearby plants, including those eaten by harmless insects like the monarch. The orange and black butterflies are at greatest risk within 10 meters of BT fields, Obrycki said in an interview.
"There exists a good possibility that we will see some mortality of monarchs in the field, he said. "The level and amount will depend on the timing of when the corn is shedding its pollen and when the monarch larvae are in the fields.
The Iowa study analyzed the impact on larvae from two types of BT corn developed by Novartis AG and sold under the brand names NatureGard and Attribute.
A dozen university researchers stretching from Canada to the Midwestern corn belt are currently studying BT corn fields and whether the pollen impacts migrating monarch butterflies. University of Illinois scientists said in June they found no ill effects for black swallowtail butterfly caterpillars who ate pollen from a variety of BT corn developed by Pioneer Hi-Bred International, a unit of DuPont Co.
But Obrycki's conclusions are hotly contested by both the U.S. government and by the biotech industry that has sold farmers 20 million acres worth of BT corn.
Novartis defended the safety of its BT corn, saying the new study did not duplicate real-world conditions.
"Research conducted outdoors doesn't indicate what happens in a field environment," said Novartis spokesman Rich Lotstein. "The weight of evidence of published and preliminary research indicates that milkweed within one meter of BT corn fields are highly unlikely to be dusted with toxic levels of BT pollen."
BT pollen is not a threat to the monarch butterfly, agrees Michaels Phillips of the Biotechnology Industry Organization. Phillips, an industry scientist says many studies contradict Professor Obrycki's views and show that rain washes away the pollen, that not all BT pollen kills, and that very little Monarch food actually grows within 10 feet of a cornfield.
Said Phillips: "In real world conditions, the access of the monarch butterfly to BT corn pollen is extremely low."
Yet the Iowa State research is not just about caterpillars. It raises the question, "what else did industry and government not know?" before allowing millions of acres of gene altered corn into the ground.
The Clinton administration has faced growing pressure during the past year from consumer and environmental groups, as well as some U.S. trading partners, who say not enough is known yet about the long-term safety of biotech crops. The seed industry and agribusiness contend that gene-spliced crops have undergone thousands of tests and pose no more safety risks than conventional crops.
"Why are we doing studies today rather than five years ago?" asked Margaret Mellon, an environmental scientist in Washington. She asks if BT corn is so safe, why are industry and government funding 20 new monarch studies this ear - five years after the licensing of BT corn - to try to prove that.
And what might this study indicate about other crops the U.S. Environmental Protection Agency has approved, such as soybeans and potatoes? Said Mellon, who is with the Union of Concerned Scientists, "The fair question is, if the EPA missed the monarch butterfly, what else did it miss?"
The Iowa study published in the journal Oecologia comes at a time when the EPA has launched its own review of the safety of corn and cotton plants modified to contain a pest-fighting gene.
An official told CBS News that the agency always knew BT could kill monarchs, but assumed the risk was low and thus acceptable. Some believe the Iowa State study challenges that assumption.
EPA officials said they would review the new Iowa study, along with other scientific research as part of broad assessment of health and environmental risks for humans, animals, insects and other plants.
The agency aims to publish its views by mid-September and will spend the winter months analyzing regulations to see what changes, if any, may be needed in buffer zones surrounding BT fields or other rules. An EPA advisory panel of independent scientists will also weigh in with its own recommendations.
"Based on what we've seen so far, we're not seeing any impact on any non-target organism, particularly the monarch butterfly," Steve Johnson, an EPA deputy assistant administrator, said in an interview.
He downplayed environmentalists' concerns about the latest butterfly study. "If we were confronted by information that raised significant public health or environmental issues, then certainly we could take immediate action," Johnson said. "Based on the reviews of all the data that have come in, we don't see any reason to take any kind of action at this time."
Rebecca Goldburg, a scientist with Environmental Defense, said the Iowa research shows farmers should be required to plant 40-foot wide buffer zones around BT cornfields.
``The EPA already requires that farmers growing BT corn plant 20 percent of their acreage in non-BT corn, in order to slow the evolution of pests resistant to BT toxins," Goldburg said. "Planting some or all of this 20 percent acreage as buffer zones would be only a small additional step."
Goldburg co-authored a landmark National Academy of Sciences report on biotech crops earlier this year that concluded more long-term research was needed into the potential risks for human and animal health.
In addition to the EPA, the U.S. Agriculture Department and the Food and Drug Administration are also involved in regulating gene-spliced crops and food. The FDA is expected to issue proposed regulations next month that would require food makers to have mandatory consultations with agecy scientists before a biotech food can be marketed.
About 20 percent of the U.S. corn crop - or 15.6 million acres - was planted with BT varieties this year, according to U.S. Agriculture Department estimates.
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