Challenging GMOs – 2

March 5th, 2011

Paper Two

Government of Canada

Agricultural Standing Committee

Biotechnology Consultation

Dr. Alison Blay-Palmer

My name is Alison Blay-Palmer. I am an Associate Professor at Wilfrid Laurier University in Waterloo. I do research and teach about the global food system. In this capacity I am here to talk about biotechnology and the agri-food sector in Canada.

Thank you for inviting me to provide comments on this important matter. I appreciate your efforts to understand this extremely complex issue. As part of considering the effect of introducing GE products into the Canadian food system there needs to be a thorough review of environmental, community and economic impacts.

As the mandate for federal elected officials is to ‘represent Canadians in Parliament’ (Government of Canada website 2011) it is up to you as Parliamentarians to protect Canadian farmers, consumers and our food industry. Part of this involves safeguarding our export markets.

The agri-food system in Canada is critical to the economy and all communities providing one in eight jobs and representing 8.1% of GDP. (AAFC 2011) In this context, there are three points I will consider regarding the licensing of more GE crops:

1. The cost of losing agricultural export markets

2. The risk of being held responsible for these losses if they do occur

3. The advantage of retaining non-GE products for export.

With respect to cost, in the last decade there have been significant financial

repercussions as borders closed to product refused due to actual or potential

contamination.

Farmers and taxpayers have suffered losses as a result of:

1. Flax contamination from Triffid seed; and,

2. Feed contamination and the resulting BSE crisis.

These two cases are important to consider as they raise relevant precedents for

GE innovations going forward. Clearly the Mad Cow crisis was not related to GE technology.

I am raising this incident, as it is instructive with respect to costs assumed by the Canadian government and its responsibility to protect agricultural markets and farmers’ livelihoods.

With regard to cost, farmers lost over $4Billion due to increased processing costs and losses from reduced net exports (Roy et al., University of Lethbridge 2006). It cost taxpayers over $550 million in federal and provincial recovery programs.

And, finally there is a $7billion class action suit on behalf of Saskatchewan, Albertan and Ontario farmers against the federal government and Ridley Canada feed company of Winnipeg based on assertions that the federal government could have prevented BSE had it designed better feed regulations, safety reviews AND provided better oversight.

In the case of flax, the detection of GE content threatened the $320 million Canadian flax market into the EU for Canadian farmers. So far it has cost taxpayers $1.9 million to implement a sorting and verification system. And this was due to contamination from seed that was destroyed over a decade ago. There are similar cases in other jurisdictions.

In the United States, it was estimated that StarLink cost U.S. corn producers up to $290 million in revenue (Schmitz, et al. 2004) while Liberty Link (LL601) GM rice market damage as between $741

million to $1.285 billion. (Blue 2007 in Blue 2010). Given these precedents and associated expectations, it would be reckless to ignore the economic cost of inappropriate agricultural policy decisions that allow the introduction of another crop, such as GE wheat, into the Canadian foodscape without detailed analysis of economic risks.

I will use GE wheat as an example of the potential downside for biotechnology crops. I will focus on wheat as it raises issues and costs not yet confronted by the agri-industry in Canada.

First is the size of the market. The cost for farmers in lost markets if GE wheat was introduced would be substantial. Using data from the United Nations Food and Agriculture Organization (UN FAO)

I calculated the value of Canadian wheat sold to Japan and the EU countries who are 100% GE free or have regions so-declared.

The value of this market totaled $738,111,000 in 2007.

This number jumps to $784,204,000 if all of the EU countries are included.

In the worst case scenario, using a USDA survey of countries who said they would not accept GE wheat, this would have meant over $4BILLION in lost sales, leaving our farmers with only $288 million in sales instead of $4.36BILLION for 2007(FAO 2007 data).

Our farmers could lose access to these secure markets if GE wheat is grown in Canada. As Furtan and Gray at the University of Saskatchewan put it there is no first adopter advantage – rather GE creates a market for ‘lemons’, in this case what the market would perceive to be inferior GE-wheat (Furtan and Gray 2005).

If we do introduce GE wheat, a 2010 study in the US estimates that market prices would be between 41% and 57% lower than non-GE wheat (Neal Blue 2010). Given this example, there is no question that due diligence requires detailed knowledge as regards the value of all export markets at risk.

Second are the actual product profile, premium and marketing issues: Wheat is one of our largest export crops. In many ways, it defines Canada in the international market place. Canadian international food identity and food safety is linked to wheat. The Canadian Wheat Board encourages its farmers to identify their product as Canadian. Canadian wheat commands a price premium in some cases and is often highlighted on labels as a preferred product and can command a price of ‘up to $3.36 Cdn per kilogram over generic varieties.” (CWB n.d.:16) Variations on the ‘Grown in Canada’ labeling is repeated on packaging used by processors including ADM for product destined to Asia including China and by other food processors and retailers in countries including the United States, the UK, Mexico, Poland, and Japan. (CWB n.d.)

Third, is the nature of the issue. Wheat is NOT like canola, soybeans or corn. (Neal Blue 2010) GE wheat will be the first minimally processed GE-food sold for human consumption. Unlike corn, soybeans and canola, which often end up as one of many ingredients in highly processed food, or as animal feed, wheat would be turned into flour for bread, pasta or other products and it would be the primary ingredient. This puts us in a new place with respect to consumers.

This is a ‘motherhood’ issue and could result in substantial backlash from nations who identify strongly with bread and other staple wheat products (for example, baguette and pasta). In this case we are not dealing with lecithin and other highly processed food ingredients, but the main ingredient for staple food. Wheat, therefore, puts us into a new realm with a huge potential downside – the

same could be assumed for other foods such as fruits (e.g. plums) and vegetables (e.g. eggplant) that would be eaten with little or no processing.

On a more general level, the whole rationale for GE crops needs to be considered. With respect to the ‘GE will feed the world’ argument, genetically engineered crops have been available for ten years and we have more hungry people now than a decade ago. While we have seen the introduction of herbicide resistant and pest resistant crops, there are no GE crops on the market that address any issues related to world hunger.

In terms of production, there has been no perceptible increase in yield for farmers using GE crops – a 2009 report by the Union for Concerned Scientists, a group of internationally recognized scientists and business experts from respected institutions including Harvard, Yale and MIT – found that, and I quote, “No currently available transgenic varieties enhance the intrinsic yield of any crops. The intrinsic yields of corn and soybeans did rise during the twentieth century, but not as a result of GE traits. Rather, they were due to successes in traditional breeding.” (Union of Concerned Scientists 2009: 2)

And in referring to operational yield, I’m quoting again, “the best data (which were not included in previous widely cited reviews on yield) show that transgenic herbicide-tolerant soybeans and corn have not increased operational yields, whether on a per-acre or national basis, compared to conventional methods that rely on other available herbicides.” (2009: 2) Weighing some hypothetical very marginal yield gains (and here reported as nonexistent) against catastrophic market losses it is hard to justify putting more farmers at risk.

At this point there is no reason to allow more GE seeds to be used in the Canadian agri-food system.

Objective science finds no yield benefits. And the downside is huge. The agri-food system in Canada is critical to the economy – in such a competitive environment why would we add the GE-risk to the mix?

Finally, it is worth noting that producers of GM crop varieties and the people who use them to make food acknowledge the marketability risks associated with GM. They have consistently lobbied against product labeling that would advise of GM content. It will not be possible to eliminate or even downplay GM content when wheat grain is the primary and almost sole ingredient in such food staples as bread and pasta, let alone when it is sold as whole grain or flour. In approving additional GE seeds and products, you are accepting the burden of assessing economic risk on behalf of farmers who have absolutely no way of minimizing their market risks.

The farmers themselves are unable to act completely collectively on this and individual refusal to use GM seed accomplishes nothing. In the case of contamination, markets will be closed to Canadian farmers. The widespread and rapid movement of genetic material means that only the state is

in a position to intervene. This said, you either act or decide not to act – either way though you made a policy decision.

If a sound case based on objective, third party assessments can substantiate that there are economic, environmental and community benefits to adopting more GE food products then why wouldn’t we? But in the mean time why subject such a vital part of the Canadian economy to this added risk?

The upside: The advantage of non-GM market. In fact, let’s flip this around; let’s look at the upside of maintaining high standards of traditional product quality and purity. As has been shown with the examples of premium product labeling for export markets for existing Canadian wheat, Canada can differentiate our crops in a highly crowded market place – having GE free crops could allow our farmers to command a price premium. GE-free crops will not only guarantee the markets farmers have worked hard to create over many decades but could allow them a further advantage in expanding those markets. Why would we want to compromise our market position and our reputation?

Thank you for your time and attention.

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