December 19, 2006
Segregation of GM grains in Australia manageable
Any requirement to keep non-genetically modified, or non-GM, grain separate from GM grain throughout the supply chain in Australia would impose costs on the industry, but these are modest and manageable, according to research issued Tuesday by the government's Australian Bureau of Agricultural & Resource Economics, or Abare.
The study, entitled "GM Grains in Australia: Identity Preservation," investigated the costs of preserving the identity of GM and non-GM grains in mixed production systems, given some consumer resistance to GM grains.
Identity preservation is a process by which a crop is grown, handled, delivered, and processed to ensure it has maintained its unique identity through the supply chain, it said.
"If GM canola was introduced in Australia, the case studies undertaken by Abare suggest that additional costs to producers of identity preserved non-GM canola would average 4 percent-6 percent of their farm gate canola price in a typical year," Phillip Glyde, Abare's executive director said in a statement.
Australia has had considerable experience in identity preservation with conventional grains, including durum wheat and malting barley, he said.
If all identity preservation costs were attributed to producers of non-GM canola, then additional costs of AUS$14.48 a tonne were estimated for every tonne produced, or about 5 percent of the average farm gate price.
Abare said that in economic efficiency terms, additional segregation is only justified if the additional value it creates for the grain segregated is greater than the cost of the segregation.
"While it is evident that there are additional costs associated with segregation of GM canola, it does not appear at this stage that there is a price premium on a wide enough scale in domestic and world markets for certified non-GM canola that would more than offset these additional costs," the study found.
However, future modifications of GM canola and other grains, such as altering the oil profile and other quality attributes might earn price premiums for desirable attributes, the study said.
Additional costs of segregation stem from two major reasons: additional time taken by labour in switching between different grains in the central bulk handling system and additional testing for the presence of GM grains, it said.
Glyde said identity preservation with GM grains involves some new challenges.
"Abare is of the opinion that the costs of identity preservation with GM crops are manageable," he said.
Australia's major grain producing states currently have moratoria over the commercial development of GM cereals and canola.
Commercial development of GM canola is allowed in Queensland, where little if any is grown.