Nothing about the 500 bushels of soybeans delivered last month to the century-old Aurora Cooperative Elevator Co. in Nebraska suggested that they contained a very modern surprise.

But mixed into this batch were a few tiny fragments of an experimental corn genetically engineered to produce a vaccine against traveler's diarrhea also known as Montezuma's revenge. Just hours before the soybeans were to be sent to the factories that turn them into salad oil and animal feed, government inspectors intervened and isolated the warehouse.

The amount was tiny--barely an ounce--and officials say it posed no health threat. But for those committed to safeguarding the food supply, any amount is too much. A handful of modified corn had
spoiled the entire bin of 500,000 bushels.

And with that, a technology said to hold great promise for advancing human health found itself in big trouble again.

Giant food companies like Kraft and ConAgra, stung by a sweeping recall of contaminated corn two years ago, are up in arms over this episode. And environmental activists aghast at the thought of turning fields of grain into drug factories say the events in Nebraska show that the "farmaceutical" industry can't be trusted.

"Someone is going to get prescription drugs in their corn flakes," said Larry Bohlen, director of health and environment programs at Friends of the Earth.

Stuck in the middle are Midwest farmers, eager to prop up their incomes with a value-added product. Now they're getting pushed aside altogether as "biopharming" flees the Corn Belt for isolated pastures that offer less risk of another mix-up.

Federal regulators say the Nebraska case shows their inspection system is working. They have launched an investigation into whether the company that developed the biotech corn, ProdiGene Inc. of College Station, Texas, violated rules aimed at preventing contamination. The company had a similar problem in September, when Agriculture Department officials ordered it to burn 155 acres of tainted corn surrounding a test site in Iowa as a precautionary measure.

In the Nebraska case, regulations call for the destruction of all $2.7 million worth of contaminated crops in the grain elevator. ProdiGene has said it will comply, and the soybeans will either be
incinerated or turned into biodiesel fuel. To some, destroying food over what amounts to a negligible amount of crop material is a needless waste.

But others say regulators have seriously underestimated the risks.

"There needs to be a total re-examination of the regulatory regimen to assure the public that there is no threat to their food," said Neil Harl, agricultural economist at Iowa State University.

The biotech industry's previous assurances also have hurt its credibility. Just a month ago, ProdiGene Chief Executive Officer Anthony Laos appeared on a CBS News program and said he was certain his biotech medicines could never contaminate non-pharmaceutical crops "because I'm following procedures that make it impossible for that to happen."

In an interview Friday, Laos stood by his statement, saying the food supply never was at risk, "the procedures all worked, and nothing happened."

Bohlen disagreed: "How could the USDA allow 500 bushels to contaminate 500,000? That's a regulatory failure, not a success."

Drugs made from crops

ProdiGene is among the leaders of a nascent industry that uses corn, barley, rice and tobacco to grow everything from injectable insulin and cholera vaccines to industrial enzymes for tanning leather.

ProdiGene says its partners include the giant Eli Lilly drug company, and it has at least 18 products in development.

For decades now, scientists have been tinkering with the genetic makeup of living organisms. The technology has enabled farmers to grow corn, soybeans and cotton that is genetically modified to resist pests or certain herbicides.

But as biotechnology moved out of the laboratory and into farm fields in the mid-1990s, it raised questions about its safety, ethics and impact on the economy and the environment.

Supporters say biotechnology can lessen crop losses to insects and drought, decrease soil erosion, reduce the use of chemical pesticides, and boost the nutritional value of food. With biotechnology, proponents say, animals and fish will be larger and more disease-resistant. Trees can sprout more quickly; suburban lawns can be grown more slowly. Many species can be altered to require less care and be more disease-resistant.

Growing pharmaceuticals in plants is a relatively new application, and it is considered promising because it has the potential to sharply reduce the cost of mass producing valuable medicines.

"We're able to make these drugs that are not going to be made by other sources," said Debra Robertson, an executive at Epicyte Pharmaceutical Inc., a California-based agricultural biotech company. In the Nebraska corn, researchers insert a gene taken from E. coli into the plant cells, creating a substance that protects against traveler's diarrhea. The vaccine grows within the modified corn and can be extracted after harvest.

Environmental groups, food companies and some health advocates are concerned about unknown side effects from even traces of such crops not approved for consumption.

In an infamous case that illustrated the problems of agricultural biotechnology, a genetically altered corn called StarLink was discovered in the food supply in 2000, leading to recalls of taco shells and other products. Officials never approved StarLink for food use because of unresolved questions about its potential to cause allergic reactions.

Some farmers, meanwhile, fear that genetically modified crops will accidentally mix with their conventional or organic crops and they will be stuck paying the consequences.

Firm OKs safety measures

In October, ProdiGene and several other biotech companies agreed not to grow genetically engineered corn for use in pharmaceutical development in states where it could contaminate neighboring food crops.

The voluntary moratorium affected Corn Belt states, including Illinois, Indiana, Iowa and parts of Kentucky, Minnesota, Missouri, Nebraska and Ohio. But it wasn't scheduled to take effect until the next growing season in 2003, according to Cindy Smith, deputy administrator for the USDA's Animal and Plant Health Inspection Service.

In the wake of the ProdiGene controversy, groups are calling for stricter measures. Some want the federal government to ban the planting of pharmaceutical crops for at least a year. Last week, in a letter to Agriculture Secretary Ann Veneman, Senate Majority Leader Tom Daschle (D-S.D.) and Senate Agriculture Chairman Tom Harkin (D-Iowa) questioned whether USDA procedures provide adequate safeguards for the food supply from genetically modified products.

In both the Iowa and Nebraska cases, workers for ProdiGene grew test plots of gene-altered corn in 2001. Ordinary soybeans were planted in the same fields in 2002, but a few corn seeds left over from the year before sprouted.

In the Nebraska case, ProdiGene workers thought they had removed all the stray plants. But after the soybean crop had been sold at the rural co-op last month, it was discovered that several corn sprouts
had gone undetected under the canopy of beans, and pieces of the leaves and stalks had been swept up by the harvest machinery.

Those fragments were thought to contain traces of the diarrhea vaccine, according to Laos, and regulators asked him to impound the entire batch. With a phone call, "We locked and sealed the
warehouse," Laos said. "It is under our control."

Opponents of the technology are unforgiving.

"A leading company in the pharm crop business failed to meet the simplest, easiest containment requirement," said Jane Rissler of the Union of Concerned Scientists. "If they will not do that, which is so simple, how can we trust them to do much more complicated things?"

Aurora co-op Chairman Bill Schuster, a Nebraska farmer, is crossing his fingers.

"You think you're taking all the precautions, and something sneaks up on you," he said. "This is one of those things you don't want to go through again."