| Genetically Modified Crops
Briefing Paper 19/2003
by Stewart Smith
Extract from NSW Parliament (reference here)
7.1 IDENTITY PRESERVATION AND SEGREGATION
The overall trend in regard to food safety is toward greater disclosure of: sources; methods of production; and the content of processed foods. The increasingly global nature of the food supply chain has put pressure on governments to enhance and harmonise food safety standards. Issues such as foot and mouth disease, bovine spongiform encephalopathy (BSE – mad cow disease) and hormone injected beef have raised the level of concern about food safety in many countries, and increased the demand for greater traceability in the food chain.57 The result is greater reliance on ‘traceability’ – the ability to determine what parts of the food supply chain have come from where. Traceability generally takes the form of segregation or identity preservation. Segregation systems generally deal with segregating one crop from another and tend not to involve high levels of precision. Identity preservation systems require documentation to guarantee certain traits or qualities are maintained throughout the supply chain. These standards are more rigorous and costly to apply.58
The cost of an identity preservation system is relative to the complexity and number of actions in the chain to meet the information and physical segregation requirements. A key factor influencing the complexity of the identity preservation requirements is the tolerance level for ‘contamination’ or ‘unintended presence’. Current identity preservation / segregation systems in the United States are increasing costs by 10 – 15% through the production and supply chain, equating to A$25–$35/t for bulk commodities such as grains. 59
The Australian grain industry has developed a draft strategic framework under which the initiative of crop coexistence can be developed. The Strategic Framework for Achieving Coexistence aims to meet the following objectives:
- To enable each grain supply chain participant to competitively meet the requirements of their chosen market, recognising that these requirements will ultimately be determined by consumer preference and regulatory requirements;
- To enable the release of genetically modified crops into the environment in a manner that maintains or enhances the natural resource base and minimises the offsite impacts of agricultural and related activities;
- To enable producers to utilise technologies most appropriate to the chosen farming system;
- To enable the incorporation of genetically modified crops into individual farming systems using crop management techniques that maximise the effective life of the technology.60
Industry initiatives for the development of a coexistence framework will be with the following principles:
- Transparency and consultation;
- Freedom of choice: whereby producers are able to choose the production system that they implement, and the supply chain in which they operate, and consumers and purchasers along the supply chain have access to their preferred product;
- Reasonable measures: whereby measures implemented: are based on customer and regulatory requirements; are flexible, practical and cost effective; are science based and supported by risk assessment; and incorporate and reference relevant industry, government, regulatory and research initiatives;
- Responsibility to act: whereby participants in one supply chain are responsible for implementing measures that prevent their activities from unduly interfering in the operation of another supply chain;
- Monitoring and review;
- Case-by case planning: whereby plans are developed that address identified risks associated with the introduction of crops into a particular grains industry sector, these plans will incorporate, as required, the following elements:
- Government, industry or co-regulatory standards;
- Management plans that incorporate risk management strategies;
- Systems that provide for traceability or identity preservation;
- Sampling and testing regimes;
- Market dynamics;
- Remedial actions; and
- Education of supply chain participants.
There is considerable debate within the agricultural industry whether identity preservation / segregation will work in practice. In a public policy position paper, Australian grains marketer AWB Limited noted a contamination episode in February 2003, where Australian wheat bound for Colombia was contaminated with GM maize that had been recently imported from the United States. AWB noted that this contamination brought into focus the impact of the commercialisation of GM varieties of grain in the Australian market and the potentially negative impact this may have on AWB’s ability to conduct its wheat export program. It then noted:
AWB is not anti-GM. We believe that there may be potential benefits to consumers and farmers from this technology and we support the ongoing research and development in this area.
However, AWB also recognises that many consumers, both domestic and international, currently have concerns relating to the commercialisation and subsequent sale and consumption of product made with this technology.
This concern is also being expressed to AWB by its customers who are becoming increasingly wary of potential contamination from grain produced with GM technology. Subsequently, they are requiring documented evidence of the nature of the product being shipped and its “GM free” status.
Therefore, AWB needs an “iron clad” guarantee that the handling of this grain, and the protocols which govern it, are sufficiently rigorous to ensure that contamination of wheat destined for export does not occur.
We acknowledge that the current “Canola Industry Stewardship Protocols” is only in draft form and we are actively involved in working with the Gene Technology Grains Committee in this process….
The Grains Council of Australia has also indicated that any protocols must up-hold the “co-existence” principle. …
This is what we want the protocols to achieve. Unfortunately, in their current form, they do not.
The scientific analysis of these products to ensure their human and environmental safety is obviously of paramount importance. However, we believe that it is equally important to assess the impact on the industry’s continued ability to conduct its export marketing program and the ability of the supply chain to ensure no contamination occurs.
This is a $4 billion dollar wheat industry and, as a nation, we cannot put this at risk.
Recommendation
AWB does not believe that it would be prudent for policy makers to allow the commercial release of GM canola at this point in time. 61
It is clear that the segregation and identity preservation of GM and non-GM crops in Australia will result in significant changes to the current operating standards in the food and fibre industries. Writing on the outlook for grains to 2006-07 in Australian Commodities, Connell et al noted: “What has been shown from the US experience is that it is costly to establish testing procedures to determine the presence or otherwise of genetically modified varieties (identity preservation), and then to maintain a segregation system through the marketing chain (product integrity) to guarantee supply against buyer requirements. Premiums do not appear to have been established in the market place as yet to justify the large scale adoption of such testing procedures.” 62
However, it is also clear that an identity preservation / segregation system that fails can also be extremely costly. For example, in the United States Starlink corn is an insect resistant variety of GM corn that was released only for animal feed. It was not registered for human consumption due to a chemical it contains that has similarities to a known allergen. However, in September 2000 testing of corn taco shells by Friends of the Earth in Washington D.C. found traces of the Starlink corn, and a product recall commenced. It became apparent that the Starlink corn had become mixed throughout the food chain, and it was reported that more than 28,000 truckloads, 15,000 rail cars and 285 barges of corn tested positive for Starlink. 63 Aventis, the company that developed the Starlink crop, estimated its costs to buy back Starlink corn from farmers to exclude further contamination at around $100 million. United States corn exports to Japan were affected, and testing and identity preservation procedures to ensure US corn exports do not contain Starlink are adding an estimated US$3-7 a tonne to the cost of shipping US corn to Japan.64 In February this year it was reported that farmers, who did not grow Starlink corn and claimed to have suffered financially from a drop in corn prices due to the Starlink contamination, reached a US$110 million settlement in a class action lawsuit.65
Peter Portmann of the Grain Pool of Western Australia has outlined three possible solutions to the introduction of GM crop technology: passive mode; resistance mode; and insurance mode. He defines the passive mode as adopting the attitude that the production of GM crops does not matter – the market will sort itself out and that GM crops will be saleable. However, the risk is that the industry, particularly producers, could seriously suffer if present consumer attitudes dominate long term outcomes.
The resistance mode is to oppose the release of GM crops until the market settles down and it becomes evident how consumers are going to respond and what the price signals are. Portmann also considers this option to be risky. The insurance mode is that whilst not resisting the release of GM crops, strategies could be implemented to manage their introduction to maximise future options. Strategies identified included:
- To restrict the release of GM crop to quality assured growers (at least in the first instance) to provide confidence in on-farm and delivery management of identity preservation by growers and to provide adequate control over GM grain;
- To rationalise receival points for GM and non-GM crops, with initially most product being non-GM and then reallocating to GM as dictated by market demand;
- To implement a strong identity preservation system from receival point to port and / or customer;
- To implement pre-delivery GM testing of crop at the delivery point;
- To implement the capacity for retrospective load by load checking non-GM crop;
- To ensure a strong legal basis for penalising growers who misclassify grain on delivery; and
- To confirm agreement by markets of their adoption of practical levels of tolerance to GM contamination in non-GM grains.
The risk identified in working in the insurance mode is what happens if the system fails, and the industry moves beyond the point of no return to GM-free in a hostile consumer market? Portmann concludes that the issue of how best to market GM crops will remain complex until: market signals provide clearer pictures of what consumers are prepared to pay for non-GM compared to GM crops; and the benefits and costs of the technology become more understood. In the meantime, the Grain Pool of WA is operating in the ‘insurance mode’. 66
References:
55 - Commonwealth Department of Agriculture, Fisheries and Forests - Australia, Draft Biotechnology Strategy For Agriculture, Food And Fibre , September 2002, at 5.
56 - Gene Technology Grains Committee, A Strategic Framework for Maintaining Coexistence of supply chains – Draft for Discussion, 31 July 2002, at 3.
57 - Stone,S. Matysek, A. and Dolling, A. Modelling Possible Impacts of GM Crops on Australian Trade . Productivity Commission Staff Research Paper, October 2002, at 32.
58 - Stone,S. Matysek, A. and Dolling, A. Modelling Possible Impacts of GM Crops on Australian Trade . Productivity Commission Staff Research Paper, October 2002, at 32.
59 - Leading Dog Consulting and Peter Flottman and Associates, Segregating Gene Technology Products – Requirements, Costs and Benefits of Identity Preservation, Segregation and Certification . Prepared for Agriculture, Fisheries and Forestry – Australia, May 2001, at 3. Whilst farmer adoption levels of GM corn and soybean are high in the United States, slightly less than 10 percent is currently segregated.
60 - Gene Technology Grains Committee, A Strategic Framework for Maintaining Coexistence of supply chains – Draft for Discussion, 31 July 2002, at 1.
61 - AWB Limited, Public Policy Papers – GM Canola Release, See http://www.awb.com.au/AWB/user/publicPolicy/pp_gm_canola_policy.asp, Accessed August 2003.
62 - Connell, P., Barrett, D. and Andrews, N. “Grains. Outlook to 2006-07.” Australian Commodities , Vol 9, No 1, March quarter 2002, at 40.
63 - Bucchini,L. and Goldman, L. “Starlink Corn: A Risk Analysis.” In Environmental Health Perspectives, January 2002, Vol 110, No 1, at 11.
64 - Foster, M. Genetically modified grains. Market implications for Australian grain growers . ABARE Research Report 01.10, 2001, at 28.
65 - “Farmers in $110 million StarLink deal – Lawyers.” World Environment News, 10 February 2003.
66 - Portmann, P. and Tucek, M. “Marketing GM Crops. Market issues facing Australia if it moves into GM crops” in Outlook 2001, Agriculture and Regional Australia, Proceedings of the National Outlook Conference 27 February – 1 March 2001, at 195.
Source: NSW Parliament |
