Gene Technology in Agriculture

Submission to the Tasmanian Parliamentary Select Committee Inquiry
16 November 2000

GENE TECHNOLOGY

We wish to make a submission to the Inquiry.

Our aims and aspirations -- such as a prosperous economy with full employment, sound environmental management, care for the disadvantaged and a tolerant and peaceful society -- are shared by the vast majority of Australians.

We believe that society's goals are best achieved through an efficient, competitive private sector, small but effective government, individual freedom with personal responsibility, and an open and peaceful exchange among nations.

We are totally independent.  We do no accept any donations from political parties or grants from government.

We act as developer, test pilot and promoter of free market ideas.  We takes the view that the onus is on those who promote more regulation and government intervention to put a strong case that such measures are necessary and cost-effective.  Our role in the gene technology debate has been one of examining the public policy issues on a matter that has assumed considerable public profile against our core beliefs.

We have published three Backgrounders on the subject;

• Risk Assessment and Decision-Making for Genetically Modified Foods
• Regulating Biotechnology:  Some Questions and Some Answers;  and
• Biotechnology and Food:  Ten Thousand Years of Sowing Seeds, One Hundred Years of Harvesting Genes

In addition we have made submissions to government on different aspects of the matter:

• Proposed national regulatory system for genetically modified organisms:  How should it work?;  and
• Labelling Genetically Modified Foods, A Submission on Proposed Labelling Provisions for Genetically Modified Foods under Food Standard A18, December 1999.
• Submission to the Inquiry of the Senate Community Affairs References Committee into the Gene Technology Bill 2000

In addition, we have published press articles promoting our views and have hosted a number of overseas experts who have been seeking to better inform the debate.

Terms of reference 1 and 2

The economic costs and benefits for Tasmanian and individual industry sectors in relation to genetic modification in primary industries

Market opportunities and associated strategies for Tasmania as a producer of genetically-modified and non-genetically modified products

GOING GM FREE

Unlike some European farming, the Tasmanian industry is a part of the global food and fibre producing network.  It depends for its continuing viability upon the industriousness of its producers, their choice of products to grow and their adaptation of technology that will maintain or preferably enhance their competitiveness.

At the present time there is some evidence of modest premiums for crops that are GM-free, a matter being pressed on the Inquiry by those who are against the new technology.  It is, however, unlikely that a major agricultural producing community like the State of Tasmania could ever carve a niche in this area, to the exclusion of modern technology, that would sustain a prosperous farm industry for the entire State.  It is still less likely that such prosperity could be achieved in the more narrowly defined area of organic products, which comprise much less than one percent of world agricultural trade.  This is not to say that individual farmers or groups could not obtain better incomes by a "GM free" or "organic" strategy.  Nor is it to argue that there is not much to be learned from organic farmers in terms of soil preservation.  Indeed, Professor Klaus Ammann the noted botanist from the University of Switzerland has called for transgenic-organic alliances to be formed.

ALLOWING FARMERS THE CHOICE

GM products will only be adopted by farmers if they improve yields, reduce costs or allow price premiums.  Although there is thought to be some premia available for GM free foods at present that may not be the case in the future.  GM products incorporating features sought by consumers are likely to become available.  The most celebrated of these is golden rice incorporating Vitamin A which will considerably reduce blindness in developing countries.

Beyond such spectacular improvements to foods, we are likely to see a vast increase in the variety of products as a result of GM.  This will allow farmers to specialise in products that incorporate features sought by particular customer segments -- different acidities in fruits for example, or properties that cater to the needs of particular areas, for example frost tolerant or low water using crops.

Tasmania's economy is more dependent on agriculture than that of other States and it can ill-afford to relinquish the opportunities GM technology brings.  Even where the State has a clear competitive advantage, as it presently does in poppy growing, that can be readily overhauled by the adoption of GM technology in rival locations.

The evidence to date has shown significantly increased farmer profits from GM crops.  Yields for US corn and cotton are up 6-11 per cent while chemical spraying was reduced by between 14 and 72 per cent.  Some of these gains would, presumably, be offset by higher seed costs.

Some modelling of the benefits of allowing farmers the GM choice has been undertaken in New Zealand and presented to the Royal Commission there by Infometrics Consulting.  In that work, the effect of New Zealand rejecting GM while the rest of the world actively pursued it was a 4% reduction in GDP.  The main loss was in "other agriculture" (including horticulture) which showed 20% less output.

Some recent evidence of the distribution of benefits from GM crops grown in the US has been published. ⁽¹⁾  The authors examined the distribution of benefits among different sectors arising from the introduction of Bt cotton to the US in 1996.

	Mean surplus values ($US)	% of total world surplus
US Farmer surplus	$141m	59
US consumer surplus	$21.5m	9
Monsanto	$49.8m	21
Delta and Pine Land	$13m	5
Rest of World -- producer	-$21.5m
Rest of World -- consumer	$36.5m
Net Rest of World surplus	$15m	6
Total world surplus	$240m	100

It should be noted that the negative value are due to downwards pressure on world prices due to additional US output.  This underlines an important feature of the technology for Tasmanian farmers.  It is not possible in an interlinked world for nations to insulate themselves.  Cotton productivity gains in the US were already, as a result of competition, being passed on to consumers.  Those producers rejecting the technology therefore face diminished income levels.

Terms of reference 3 and 5

Environmental risks and effects of the use of genetically-modified organisms in Tasmanian primary industries

Assessment processes for genetically modified food

We believe the measures proposed for the Gene Regulator are adequate to ensure against mishap.  Indeed we are of the view that there is considerable overkill since the technology poses no threat to humans and is likely to improve environmental outcomes.

The environmental impact follows from the main feature of GM foods and other crops to date.  These normally have genetic modifications to allow better properties in combating pests and chemical sprays designed to prevent weeds.  They are also likely to allow for less waste in the crops (e.g. shorter stems) and to allow reduced consumption of water.

All of these features have a benign environmental effect either because they allow conservation of resources or because they allow crop production with fewer chemical inputs.  There have not been be any superweeds developed as a result of the technology and scientific evidence rates such developments as highly improbable.

With regard to protection of people's health and safety, the new products have undergone greater testing prior to release than any previous food technology.  Indeed, although all plant and animal food we now consume has been the creation of human induced cross breeding, no previous food has ever been subject to the oversight required of GM foods.  And objectively, the latter should in fact warrant a reduced oversight since the genetic modification, which is somewhat hit-and-miss in traditional cross breeding techniques, is precise with gene technology.  Specific genes can be introduced or changed without fear of also importing genes that may have adverse impacts.

We should also bear in mind that the technology has now been in common use, especially in North America for the past four years.  It is likely that most North Americans eat GM food every day.  Moreover, such is the nature of world food trade, and the ubiquitousness of soya (47% of which is GM)⁽²⁾ in foods, it is also certain that virtually all Australians have consumed GM product.  There is no case anywhere in the world of harm having been recorded from this consumption.

We do not believe that either the environmental conditions in Australia or the susceptibility of Australians to different foods is sufficiently unlike those elsewhere in the world to justify the additional level of testing that is being put in place.

The real issue is whether the extreme and unnecessary caution in permitting the adoption of this technology is creating harm through depriving consumers of cheaper and more nutritious food.  These issues, of course, loom larger in developing countries where more expensive food may mean people go hungry or become susceptible to inadequate nutrition with consequent adverse health effects.

As improved and healthier foods become available through the GM route, delays in bringing these to market will have a particularly adverse effect.  For example vitamin A enriched "golden" rice has the capacity to prevent tens of thousands of cases infant blindness in developing nations.

The overwhelming majority of scientists favour the technology.  Some 3000 have signed a petition that says the "techniques ... can contribute substantially in enhancing quality of life by improving agriculture, health care, and the environment".  And that, "The responsible genetic modification of plants is neither new nor dangerous."

To put all fears to rest, in the past few weeks, seven premier scientific academies, (including the Chinese and Indian science academies, the British Royal Society and the US National Academy of Sciences) have issued a joint report promoting the benefits of the technology and the need for it to feed a growing world population with increasing aspirations for food quality.

Terms of reference 4

Social and ethical issues surrounding the use of gene technologies with particular regard to Tasmania's primary industries

The procedures announced and presently in place are, in our view, designed solely for public re-assurance purposes.  As outlined above, the technology itself should warrant less oversight of the new products than that traditionally required -- which is to say no oversight.

It is likely that all new GM foods introduced in Australia will have first been introduced in countries like the USA with robust assessment requirements and bureaucratic procedures and skills that are unmatched anywhere in the world.  This doubles the surety of the safety of the products, a safety that already has a high degree of insurance in view of the reputations and financial penalties that firms marketing these products place at risk.

In addition the new Regulator is to be totally independent of Government.  The Regulator will have extensive powers of investigation and will be adequately funded.  In addition, the Ministerial Council, the Gene Technology Community Consultative Committee and the Gene Technology Advisory Committee will offer further assurances.

All this said, there are likely to be those who will wish to oppose the technology at all costs.  Some of these express opposition to the technology by destroying trial crops in deliberate attempts to prevent the knowledge being gathered.

We believe the Government has leaned over backwards to put in place suitable machinery to offer Australians a guarantee that the GM food they eat is safe and wholesome and that GM crops have a benign environmental effect.  Some people will not be satisfied by such levels of assurance because of an ideological opposition to the technology -- an opposition frequently grounded in deep-seated hostility to "big business", "capitalist exploitation" or other epithets for the free market system which has brought us our present levels of prosperity.

Others may prefer to avoid GM foods for similar reasons to vegetarians who avoid meat or those who seek only "organic" foods.  Many would regard such choices as eccentric but they are freely made and based on the individuals' value systems the rights to which nobody should deny.  However, the rights of people to such choices should not require others to bear unnecessary costs.

These matters have come to a head in the debate on labelling.  To make a clear statement that a product does not contain any GM material (and processed foods contain hundreds of ingredients) would entail a vast cost, while bringing no benefit in terms of health.  Doubtless some of those calling for increased labelling are doing so in the hope that the increased costs will abort the development of the technology.

If some consumers want to avoid GM foods, sufficient demand for the absence of these ingredients will cause suppliers to make the products available.  This already happens with "organic" foods.  Some, including many organic food producers, have called for labelling where any of the food might include GM substances.  This is ironic since organic food producers could not agree to a standard that guaranteed their produce to be 100% organic -- it is impossible to be certain of an absence of an admixture of modern technology.

The best solution is to leave niche suppliers to market non-GM products to the customer (if they can do so truthfully).  The rest of us can also buy the products we want without having a needless cost imposed.  Australian and New Zealand Health Ministers did not adopt this position during their August 2000 meeting and have opted for a system that requires labelling although not on such a comprehensive basis as called for by some opponents of the technology.

There remains the question of the practicality of an individual State passing blanket legislation to require an absence of GM in the crops they produce.  Freedom of interstate commerce is guaranteed under the Constitution (article 92).  As previously discussed, it is possible for areas to opt for a GM free position as a means of promoting themselves into niche markets, though this is unlikely to be practicable on a whole state basis.  If this were to be attempted on a wide scale, as the advantages of GM products became apparent, individual farmers would wish to take advantage of the increase in productivity and would appeal against any decision by a state jurisdiction to deny them that opportunity.

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NOTES

1. Falk-Zepeda, J.B., Traxler, G, and Nelson, R.G. (2000) Surplus distribution from the introduction of a biotechnology innovation.  American Journal Agricultural Economics 82:  360-369.

2. EU Directorate of Agriculture, Economic Impacts of Genetically Modified Crops on the Agri-Food Sector, Brussels, 2000